Real Estate News Articles


Updated: Tuesday, February 20, 2018


Considering the Argument for Adding Individual Mortgages to Your Investment Portfolio

Investing in mortgages should not be looked at with trepidation. As with other cash flow investments such as corporate bonds, government notes, or money market funds, mortgage investments can be looked at in the same vein. Mortgage investments have an attractive risk-return ratio in comparison to other income-producing investments. If you choose your investment intelligently, individual short-term mortgages which I define as first deeds of trust on real estate with 65 loan-to-value LTV ratios, maturing in two years or less are considered more risky than money market accounts or US Treasury bills, but they offer yields at the level of high yield corporate bonds, or even higher with potentially lesser risk.

Chart 1 shows the general risk of short-term mortgages as compared to other income producing investments.

Risk in terms of loss of principal taking into consideration opportunity costs if interest rates rise. Generally, individual mortgages do not trade in the open market; thus, the principal is not subject to market fluctuations as compared to Govt T-Notes, Govt Notes, and Corporate Bonds. In addition, mortgages that have a 65 LTV enjoy some protection if the underlying property declines in value. Govt Notes and Bonds have no collateral backing but are Govt backed and Corporate bonds usually have no specific collateral and are based upon the full faith and credit of the issuer.

Chart 2 shows the general return of mortgage investments on a current rate of return as compared to other income producing investments.

Chart 3 is a grid that shows the comparative advantage of mortgage investments over alternative income producing investments when considering opportunity risk/reward ratios by combing Charts 1 amp; 2.

For purposes of this article, we have defined the following:

Govt T-Bills -- 1 yr obligations guaranteed by the US Government
Govt T-Notes -- 5-10 yr obligations guaranteed by the US Government
Govt T-Bonds -- 15-30 yr obligations guaranteed by the US Government
CDs -- 1 yr FDIC insured
Money Mkt Funds -- liquid mutual funds maintaining a 1 share price
Corporate Bonds -- 15-30 yr obligations guaranteed by a US corporation rated BBB or better
Mortgage Investments -- 1st deeds of trust on real estate with 65 loan to value maturing in two years.

Risks involved in mortgages vary from the other investments that financial advisors might be more familiar with and more due diligence is required. First of all, unlike CDs or US government obligations, mortgage investments are not FDIC-insured and have no government guarantee. Do not confuse these types of mortgage investments with past GNMAs, the pooled investments created by the quasi-governmental mortgage company Ginnie Mae and sold to the public. GNMAs are mortgage-type investments and have a quasi-government backing. By contrast, the mortgages used in the above examples are individual mortgages; thus, the principal is fixed and does not fluctuate unlike GNMAs, which return a portion of principal with each interest payment and trade in the open market and are thus subjected to market volatility. The mortgage investments backing is primarily going to be the underlying real estate on which the mortgage is recorded specific versus blind pool and almost all short-term mortgages will pay interest only, thus keeping the principal intact.

However, all income-producing investments carry some risk -- and its often misunderstood, even by sophisticated financial advisors. For example, money market funds generally are only backed by the mutual funds integrity to honor the 1 share price because all they are holding are short-term obligations, both government and corporate. However, in the early 1990s, when many corporate bonds went sour, investors suddenly learned that their 1 share price was not guaranteed; they could actually lose principal. The mutual fund families that sponsored the money market funds paid out of pocket to subsidize the share prices, thereby preserving the sacred cow.

Corporate bonds carry the risk of strength and integrity of the corporation that issued the bonds. Independent rating services such as Standard and Poors and Moodys have been shown to misjudge the security of many corporate bonds -- whether through conflicts-of-interest or simple mistakes. Even without misjudgments, the price of a corporate bond fluctuates based on the performance of the company, its industry, and the economy overall. In addition, as interest rates rise, the value of the bonds decrease.

The risks that a mortgage investor faces primarily involve the borrower and the underlying real estate. An investor may choose to work with a borrower with less than perfect credit if there is sufficient equity in the property that it is worth the risk. Alternatively, a property may be marginal, but the borrower has excellent credit. These are the main factors determining the interest rate that an investor can expect on his mortgage investment.

Another factor in determining the rate on a mortgage is the competition for these types of investments. In the past, they were considered one of the best kept secrets in investing. No longer. The competition for mortgage investments has heightened to where lenders are competing for loans. This, in turn, drives down the rates. Good for the borrowers; not so for the investors. On the positive side, what once was considered an illiquid investment has risen to a semi-liquid investment. Although there is not a trading market for mortgages as there is for stocks and bonds, new companies have come to the marketplace in search of purchasing existing loans; thus, a market has opened up providing liquidity to those holders of mortgages who want to sell their loans. Giving up yield for liquidity has been attractive to some investors. The yield may be upwards of 1 lower for this ability to sell, but many have decided it is worth it. An Internet search of purchasers of mortgage investments provides many companies willing to buy them.

With the Great Recession now more than five years in the rear view mirror, many financial institutions have loosened some of their lending restrictions. This has also caused interest rates to remain competitive for borrowers. However, because of strict regulations with Dodd Frank and the ATR [Ability To Repay] requirements imposed upon both conventional and private lenders, many borrowers are facing difficulties obtaining the financing necessary to purchase owner occupied real estate used for their primary residence. Otherwise, >

One of the major problems holders of long-term debt instruments be they government or corporate bonds encounter is not so much the risk of failure, but the opportunity cost during rising interest rates. As interest rates rise as we are slowly starting to see now, the investor is caught holding investments that are losing principal, albeit temporarily. Sure, these investors can hold on to lower-return investments until maturity, but the price they pay in the lack of opportunity to participate in higher yielding instruments usually outweighs the wait. Of course, in times of declining interest rates, one would be better served to be in the longest-term bond possible and to sell just as interest rates begin to rise. The question then becomes one of using a crystal ball in which way interest rates are headed.

One solution for the risk-averse investor is to look to short-term mortgage investments no more than 5-year maturities for >

Where do investors and their advisors find these short-term real estate mortgages? There are lenders called "private money real estate lenders" who provide private financing to borrowers who may not be able to obtain conventional loans for a variety of reasons. Advisors should primarily deal with lenders who have a good reputation and record the deed of trust. In some cases, investors may want to invest in a specific mortgage because they know exactly which property is securing their investment; however, the down side to this strategy is that there is now a lot of competition for these types of loan investments and one may be sitting on the sidelines waiting for an opportunity to invest. If the investors money sits too long [in a low interest, liquid account waiting to deploy funds for a new loan], the blended rate of return after the loan is found and invested in may be lower than if the investor invested in a Fund that holds mortgages. For example, if an investor allows his/her money to rest in a money market fund paying 1 and it takes six months to find an 8 note, after one year, the average rate of return for that year was only 4.5 as compared to a Fund that may pay 7. Something else to consider is that a Fund may allow for a reinvestment of monthly distributions thereby compounding the yield. With an individual mortgage, the lender has to take the monthly payments with no reinvestment allowed. In addition, a Fund allows for diversification because the Fund has many mortgages, similar to a mutual fund holding a variety of stocks. Because this type of investment is no longer a secret, many individual investors are competing for mortgages. When a broker presents a potential scenario to an investor, that broker usually also sends the same scenario to many other potential investors, as the broker wants to make sure that he can fund the loan in a timely fashion to the borrower. Many an investor has gotten upset when, after giving the broker the green light for the loan, the broker informs the investor that he was too late and some other investor snapped up the loan. This creates a frustrating situation for the investor and wastes his time. At some point, the investor may tell the broker to stop sending him deals, as he never knows if he will be allowed to invest in the specific loan [because another investor was faster in saying, "yes"].

Many investors choose to invest in a Fund to avoid those disappointments. In addition, many Funds provide a liquidity feature, so the investor can withdraw his money if he needs to. Advisors should look for Funds that charge no load to get in or out and make sure the manager of the Funds interests are aligned. One way is for the Fund to participate in the points being charged to the borrower. This lends itself to make sure the manager does not charge a large amount of points [which the manager could retain] and a small interest rate [which is paid to the Fund].

Although short-term mortgages and mortgage Funds are not the "end all" investment, they may play a prominent place in many investment portfolios looking to provide high yields for >

Edward Brown is in the Investor >415-883-2150
www.pacificprivatemoney.com


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HOA Board Elections

Question: Our condo has an election coming up: eight applicants for four positions. Residents are sent packets with applicants resumes and proxy sheet to mail n if they are not able to attend the meeting to vote in person. Some residents ignore the entire event.

Some applicants are going door to door asking residents to sign a proxy form for them. These applicants will then walk into the meeting with signed proxies - more or less rigging the voting process.

This process just appears to me to be slightly unethical. Please send your opinion. - Bonnie

Answer: Bonnie: Join the wonderful world of condominium living. Personally, I dont like the concept of a "proxy;" if you care enough about your association, come to the meetings. However, as a practical matter, proxies are usually needed to meet quorum requirements.

I do not, however, consider what is occurring in your association unethical. Whats wrong with meeting with fellow owners and trying to get their vote. Thats the way politics works for national, state and local elections, so why is it wrong in your association?

So long as all potential candidates have the same opportunity to solicit votes, that, in my opinion, is democracy.

Question: When a condominium association needs to make a decision regarding a choice between an assessment versus increasing condominium fees, which is wiser? Our over-55 community has six sub-associations and unfortunately ours has depleted our reserve funds due to the repair of some extensive structural damage for which the builder is no longer responsible after almost 14 years.

The property management company contends an assessment is less desirable and would result in a negative for the entire development. I feel that a seriously depleted reserve fund is more detrimental and should be addressed with an assessment immediately versus increasing the monthly fees. - Joan

Answer: You asked a very good question, but unfortunately, there is no easy answer. This can not be answered in a vacuum; we have to look at all of the facts. And perhaps the most important fact is to analyze the makeup of the owners. Can they afford a large assessment? Will such an assessment trigger more defaults, which would make your financial situation even worse.

What repairs are immediately needed? Has the board considered getting a bank loan, especially now that interest rates are low? Has the board considered a combination of assessment and increased monthly fees?

Bottom line: The board - with the input of owners such as you - should carefully consider all of the facts and all of the various options before making a decision. There is no universal answer.

Question: I have not seen or I have missed info in your column on reverse mortgages. Im 77 and have my own home. I have four adult children who own their homes and are not interested in mine. I still have a mortgage balance of 113,000. Would you please provide me with some information on reverse mortgages - the pros and cons or who I can get in touch with for info? Mary.

Answer: Mary: Perhaps the best place to start learning about reverse mortgages is from the AARP. They have lots of helpful material which you can get online.

Pro: Depending on the value of your house and the amount if any of your current mortgage, you can get a lump sum right now.

Alternatively, you can receive a monthly payment for the rest of your life or until the house is sold. And this is true even if these payments ultimately exceed the value of your house.

Con: You still have to pay the insurance and the real estate tax every year. You still have to maintain the house. And perhaps the most significant negative: You may have no equity left in the house to give to your children or your grandchildren.

I cannot - in this short column - provide more information. In addition to AARP, there are a lot of helpful studies and articles on the web, which you can find just by searching "reverse mortgages." But beware of scammers. And dont >


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Avoid Contractor Estimation Errors; Hire A Contractor That Uses The Bluebook Pro Estimator

There are many things to consider when it comes to remodeling or any other home improvements on a home. The pressure to get things done in the right way can at times be overwhelming. However, choosing the right residential construction contractor can help you >

One of the must-have tools a homeowner should look for when choosing a residential contractor, is the Bluebook PRO Estimator. This cloud-based cost estimating solution enables contractors to build fair, accurate home improvement estimates for the homeowner. Below is a rundown of the benefits you can expect by hiring a contractor that uses the Bluebook PRO Estimator.

Accuracy

When it comes to estimating the cost of a construction project, you cannot afford to be wrong. A wrong estimation can lead to wastage or even stalling of a project if you realize later that you cannot finance it. You, therefore, need a contractor with the most objective way of doing estimates. The Bluebook PRO Estimator is arguably the most accurate tool that residential contractors can use to estimate the cost, and even manage the actual project. Working with a contractor that uses the Bluebook Pro Estimator will significantly eliminate the chances of human error in estimation.

Professionalism

Your home is probably the most valuable thing that you have. Thus, you want to make sure to leave its construction, repair, or renovation in the hands of qualified professionals. You need a contractor exhibiting the highest standards of professionalism. Although there are other things that you can consider to ascertain professionalism, the tools that they use can give a clue. The Bluebook PRO Estimator is a must-have tool for all residential contractors, giving you valuable, early insight into the tools they employ and the professionalism at all levels of their work.

Consistency

The best part of hiring a contractor that uses the Bluebook PRO Estimator is their ability to make accurate bids time and time again. This makes it possible for them to draw up accurate timeframes and put cost-cutting measures by looking at past projects and comparing the similar ones. Thus, by working with contractors who use Bluebook PRO Estimator, it will be possible for them to create realistic expectations on your project based on the past, ensuring you will not be frustrated in the end.

Fair Pricing and Efficiency

For you to get value from your project, it is imperative to ensure that you get a contractor that will deliver quality work at the fairest cost possible. This is what contractors that use Bluebook PRO Estimator are best known for. This tool enables them to work efficiently and provide you trusted pricing, which will go a long way in saving you time and money.

The Takeaway

Overall, it is apparent that Bluebook PRO Estimator is an essential tool for all residential contractors and one factor that homeowners should look for when making a decision on their home improvement project. This tool enables contractors to deliver estimated project costs with accuracy, professionalism, and efficiency. If you are looking for a contractor to build, repair or remodel your home, it is wise to ensure that they are using Bluebook PRO Estimator, the official recommended nationwide Cost Estimating tool of Realty Times.

Ask your contractor; "Are you a Bluebook PRO Estimator?"


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Whats Driving Canadian Cities House Prices?

It costs a lot more to buy a home in Toronto or Vancouver than it did in 2010. While some of the increase is >

A new study by Canada Mortgage and Housing Corp. looked at the period from 2010 to 2016, during which prices in Vancouver rose by 48 per cent and in Toronto by 40 per cent. It determined that about 75 per cent of the increase in Vancouver could be attributed to conventional economic factors -- including mortgage interest rates that were near historic lows, higher disposable incomes and population growth. But in Toronto, those factors only accounted for 40 per cent of the increase, says the report.

"We investigated the data for additional key factors that could explain the elevated activity levels," says the report. "We found that there had been a shift in the distribution of sales toward high-end homes, with almost all growth in prices for these properties coming from more expensive, single-detached units. This suggests that looking at different points in the income distribution is just as important as studying how income levels evolve across the distribution."

The highest-paying jobs are in the largest cities. Toronto is the financial services capital of Canada and both Toronto and Vancouver have many well-paying jobs in the advanced technology and health care fields.

"Businesses located their workforces where they can access pools of talent -- in major metropolitan centres. Consequently, disposal income among some groups is rising more rapidly in certain cities," says the CMHC report. "These trends reinforce the role of larger cities in attracting highly educated professionals from both other parts of Canada and abroad, thereby providing even a further boost to the demand for housing."

How much did investor and speculative activity drive up prices? Perhaps not as much as many think, and investors are probably helping boost the supply of available homes, says the report.

"If the number of housing starts is much higher than the rate of household formation, we argue that this difference was likely financed by investors," says the report. It says rising home prices attract small-scale rental investors, including individuals who rent out part of their homes to help them with their mortgage payments. "It is also possible that many of these investors have effectively generated demand for builders and developers to construct more housing. In this regard, investors could be effectively encouraging more supply rather than increasing demand."

The controversial issue of foreign investment is "a persistent challenge" because of a lack of data, although Statistics Canada and CMHC have increased their efforts to track foreign buying activity. A recent report from Statistics Canada found that non-residents own 3.4 per cent of residential properties in Toronto and 4.9 per cent in Vancouver.

"While official data on the stock and flow of foreign investment appear low, it is possible that upsurges of foreign investment at market peaks could alter expectations of domestic homebuyers on the price they should pay for housing, and encourage domestic speculators," says the report. A CMHC survey found that 52 per cent of recent homebuyers in Toronto and Vancouver believed that foreign buyers were having an influence on home prices.

Both B.C. and Ontario have introduced taxes on non-resident real estate buyers.

For years, the development and real estate industries have said that government policies that limit the supply of developable land, along with land-use policies and "not in my backyard" movements, have made it impossible for the industry to keep up with demand. That means that more affordable low-rise housing such as townhomes, semi-detached homes and multiplexes, are not being built.

"We found that supply responses to price increases in Toronto and Vancouver were proportionately weaker than the response in other cities, which is consistent with corresponding regulation and geographic characteristics," says CMHC.

The study says many Vancouver homes are demolished and replaced with more expensive ones that house the same number of people. "There also appears to be a sizable price gap when moving from two- to three-bedroom homes, suggesting there is a shortage of three-bedroom homes. We do not have data for Toronto on this issue, but we suspect this is happening there as well."

The study calls for the densification of cities. "Densification, however, needs to increase the supply of all types of housing. Preserving enclaves of single-detached housing will likely only serve to increase wealth inequity and not meet the housing needs of a growing population. It is particularly imperative that the process of redeveloping land within the borders of Canadian cities occur efficiently and promote change in the form of local neighbourhoods. While many Canadians fear density, we found evidence that high-density communities can be made in low-rise structures through partnerships between developers and local communities and government."

It cites examples such as the redevelopment of Humbertown shopping plaza in Toronto and the Oakridge Shopping Centre in Vancouver. In both cases, old 1950s->CMHC says there are several key "data and analytical gaps in housing that restrict our ability to predict housing market forces and anticipate changing needs." It has pledged to work with all levels of government to try to share more information and "better understand the underlying factors that limit housing supply in high-priced markets, and support more timely and flexible ways to respond to those challenges."


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California Broker-Owned Escrows Need To Submit Activity Reports

It is time again -- but there is not much time left -- for affected California brokers to submit their annual Escrow Activity Report to the Bureau of Real Estate BRE. This applies to firms that operate a "broker-controlled escrow" that engaged in five or more transactions or whose escrow activities exceeded 1 million in the past calendar year.

Not every California Broker has an escrow division. Many own escrow companies that operate under the Department of Business Oversight DBO. Many others simply have no ownership interest in any escrow operation. On the other hand, there are those who operate a "broker-controlled escrow", pursuant to their real estate brokers license. These escrows are restricted to transactions in which the >Broker-controlled escrows are significantly restricted as to their potential market when compared to the more common escrow company operating under the DBO. Nonetheless, broker escrows require less capitalization and can still bring a decent profit into a brokerage.

In October of 2011, Senate Bill 53 Calderon was signed into law adding section 10141.6 to the Business and Professions Code. It set forth filing requirements for broker-controlled escrows. If such operations conduct escrow activities for five or more transactions in a calendar year, or whose activities equal or exceed one million dollars in a calendar year, it is required that a report be filed within sixty days following the completion of the calendar year. Except for leap years, the deadline is March 1.

The report is submitted on the Bureaus form RE 890. It is neither particularly burdensome nor time-consuming to complete. In addition to asking about the number and dollar volume of escrow transactions, it requests the location of escrow offices and basic information regarding the escrow officers and escrow trust accounts. If anyone has difficulty with the form, they may contact the CalBRE Mortgage Loan Activities section at 916 263-8941.

It has been a source of particular annoyance to the Bureau and its Commissioner that, so far, there appears to be a serious lack of compliance with Business and Professions Code 10141.6.

In the first year the requirement went into effect, for calendar year 2013, 206 real estate brokers reported broker escrow activities totaling 8.63 billion. Since then, the number of reporting brokers has actually declined.

The Bureau estimates that more than 700 brokerages should be submitting reports. Note that the number is an estimate. There is no special form or requirement for a broker to conduct escrow activity, so the Bureau has never been able to compile a data base of broker-controlled escrows. It would have such a data base if everyone affected by Business and Professions Code 10146.6 complied with the law. At least it would have a list of those who meet the reporting requirements described in paragraph one, above. But, because not everyone has complied, the Bureau doesnt even know who the non-compliant ones are.

How then, you ask, does it know that there actually are non-compliant brokers with respect to escrow activities? Because it finds them when conducting audits. Some of those audits are random; others are the result of complaints, not necessarily >Last year, the Bureau conducted 632 audits, of which approximately 15 95 were >Fines for failing to submit a timely report can run up to 10,000. There can also be non-monetary penalties as well as the often-substantial cost of a BRE audit. The Bureaus Audit section is actively pursuing brokers to determine if they have met their reporting requirements, if any. Brokers who have escrows that meet the >Bob Hunt is a director of the California Association of Realtorsreg;. He is the author of Real Estate the Ethical Way. His email address is .


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DIY Renovating Donts We Learned From Experience

DIY always seems like such a good idea in the dream stage. Build in some equity with elbow grease. Get more for our money while learning some important skills. Create pretty spaces without having to deal with contractors. What could go wrong?

Plenty, actually. If you dont already have a DIY horror story, or at least a tale of woe thats funny only in the rear-view mirror, youre probably overdue. But you can avoid the problems and the pain by learning from others mistakes.

Dont start a project without educating yourself

Putting up a backsplash. It seems like an easy enough task. One that you can involve your children in, even. And then you step back and take a look at your post-backsplash handiwork and realizeperhaps you should have consulted an expert. Or at least watched a YouTube video or two.

The truth is that you can learn almost anything you want today just by Googling it. There are tons of tutorials out there that can teach you how to lay wood floor or replace a window or, yes, do your own backsplash. Or, build a house from scratch, if thats what youre into. They probably wont turn you into an expert overnight, and, in many cases, an abbreviated study isnt going to compare to the work of someone who has been honing their craft for many years. But for the persistent DIYer, getting in some good study before starting your project is essential to doing a job well.


prestigefloors.ca

Dont paint your cabinets without prepping first

Guilty. Yes, we knew sanding was necessary for a smooth finish. Yes, we did it anyway Weve since learned from our mistakes but still. If you want cabinets that chip and peel and generally look like crap, painting without prepping is definitely the way to go.

Commit to finishing a project

Anyone else paint half a room - the lower half that doesnt require standing on a ladder, perhaps - with the intention of finishing the other half in a day or two? Anyone else have one or more unpainted rooms? Sometimes, the DIY brain just wont rest, and its always looking ahead to the next project. That can lead to a house-full of projects in progress and a chaotic home. Of course, that could just be us.

One way to combat this is by goal-setting with an actual deadline, whether its a weekend or a month. You abide by them at work, right? Make your projects a priority by setting realistic deadlines you can follow, and then commit to getting it all done before starting something new.

Measure, measure, measure

Weve all heard the saying. "Measure twice, cut once." But, honestly, sometimes measuring twice doesnt feel sufficient to us. If we can get it right three times in a two, we feel pretty confident weve got the right measurements.

"One of the biggest fails you can make is also one of the most common, especially for do-it-yourselfers," said HomeAdvisor. "Measuring incorrectly can cost you a lot of money and cause a lot of headaches. Being off by an inch, a half-inch, or an even smaller fraction of an inch can have dire consequences when it comes to your home renovation project. Incorrect measurements can mean that you dont have enough space to install your appliances or you dont purchase enough materials to complete the project. To avoid making this mistake, measure multiple times. If youre working with someone, have him or her measure as well to ensure that the numbers are accurate."

Dont rush your paint choice

If it looks great in the store, itll look great in or on your place, right? Not always. Theres a reason paint stores have samples. Do yourself a favor and buy a couple. The light and shadows in your room could make the color look completely different in your home, turning what you thought was the perfect shade into something meh.

Youll also want to make sure you try the paint in every room you plan to use it in. Perfect Greige is one of our favorite colors, and it looked great in our sunny office. Used in our dark-ish bathroom, however, it turned it into a muddy, cave-like space.

Another important factor to remember is what type of paint to use. That same bathroom was extra challenging to make over because someone had slathered the walls in flat paint long before we got there. "Manufacturers make paint for every surface in your home and they are not all the same," said HomeAdvisor. "Flat paint does not have a shine, shows marks, and is not easy to clean. Use this type of paint on ceilings and on walls in low-traffic areas. Semi-gloss and gloss paints have a nice shine and are a better option for walls in bathrooms, kitchens, and other high-traffic rooms."

Make a realistic budget

When it comes to our home, we all want more than we want to or can pay for. But lowballing your reno budget just to get a project going typically wont work out so well in the end when the numbers start to add up and you dont have enough money to comfortably finish it. Planning out a project well and doing sufficient research to come up with legitimate numbers is key.

"To calculate how much remodel you can afford, follow these four steps: Ballpark the cost, establish a spending limit, get quotes from contractors, and set your priorities," said houselogic. A fifth, very important step is this: Once you arrive at that magic number, add more money to it. "Add a 15 to 20 contingency for the unforeseen problems and changes that occur on every project. Is the total still within your ability to pay? If so, youre ready to get started. If not, its time to scale back your plans."

Make sure your contractor is qualified

There are times you just arent going to be able to DIY something or will find yourself overmatched by a task and in need of someone to pick it up and finish. It happens.

The handyman down the street may be affordable and gung ho about redoing your bathroom, but is he qualified? Trying to save a buck can cost you big time in the end if the work is done incorrectly. Sometimes, it pays to go with a qualified contractor who may cost a bit more upfront but who you can be confident about.


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Renovation Tips For A Classic, Not Trendy, Home

Heres the dilemma. Youre getting ready to redo your kitchen and you want it to be stylish and modern but not trendy. After all, this is the only kitchen renovation you ever plan to do and you dont want it to be outdated before you are even finished with the final touches.

If youre paralyzed because youre afraid of making the wrong decision, we get it. Were facing a similar dilemma here, FYI, with floors that need to be done and so many options from which to choose and no winner yet because its not yet clear if what is currently hot is just a flash in the floor pan or will stick around for a while.

So how do you know how to choose? First, it depends on what your goals are. If youre just looking to update and then sell your house, choosing materials that are trending now may be a good call. If youre thinking, "I want to love this and have it still look good in 10 years," thats another story.

"Youve probably taken on a renovation project because you want to update the >


nytimes.com

Go neutral

Yes, neutral can be boring. Its true. It can also be super chic when done right. Making a bold choice with your kitchen countertops might feel like the right way to go right now, but you may turn around in a couple years and regret that choice, especially if youre going to try to sell your home. You can always bring in pops of color with accessories or items that are easier to replace or redo.

For the last several years, grey has been the go-to color for homes. Prior to that, it was beige - a color that is currently seeing a resurgence even though grey is not gone - yet. Black and white is another currently hot option for color schemes, and, the bonus is, "black and white remains a >

Just keep in mind that high ceilings and other architectural features may make a DIY situation un-DIY-able and may make a redo more expensive because you have to hire someone. Key in on walls that dont soar to a pitched ceiling or that can act as a focal wall for high-impact thats easy to accomplish yourself.

Be smart about your kitchen

You may have a desired look cemented in your head for your kitchen, but are you making smart choices? Shaker cabinets, farmhouse sinks, and marble countertops are a few good options if you want something that looks modern but "will stand the test of time and still look as beautiful twenty years from now as it does today," said Apartment Therapy.

Go eclectic with your furniture

An entire house full of mid-century modern furniture can begin to look like a showroom, and when the trend is over, it can be painful to replace it all. Creating a more eclectic look with an eye toward >

Avoid hyper trends in larger items

Drapery, rugs, and bedding can be easily changed out to accommodate your fickle design taste. But when it comes to the larger pieces in the home - a couch or a set of chairs, perhaps, avoiding trends will give you longevity. "Timeless decor means fabrics that will stand up to years of changing trends They transcend those changes," said Stone Gable. "Dont rush out and buy foundational furniture in the lsquo;color of the year Its only the lsquo;color of the year for one year Choose colors and patterns, especially when buying big ticket items, that will still look amazing when this years trends have come and gone. Add layers of accent decor like lamps, art, tableware, pillows, bedding, etc. in more updated colors and >


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Tips For Negotiating With Sellers

If you dread the negotiating process when buying a home, never fear. Your real estate agent is an experienced negotiator who helps keep the bargaining from becoming emotional and veering off track.

Your agent must know your desires by heart and have quick access to you if a negotiation point needs to be made. Its important to stick to the strategy you and your agent have agreed upon -- showing the seller how strong your offer is.

First, get preapproved for a mortgage loan. That means your mortgage lender has reviewed your credit history and assets, checked employment and income, examined your debt-to-income ratios, and has preapproved you for a certain amount, terms and interest rate so you know exactly how much you can spend.

Being preapproved shows sellers that you are prepared and able to buy. Before you submit an offer, ask your agent to find out more what the seller wants as far as terms. The more your offer matches up with the sellers requests, such as a closing date, the more likely your offer will be accepted.

Find out when the house will be vacated, if any repairs or improvements are planned, and if the seller has any pressure points such as a >Your agent must also find out if other offers are on the table. Your position is stronger if there are no other offers. The seller may be less likely to bend on price concessions or repairs if there are other offers.

Have your agent pull up the most recent CMA comparable homes recently sold or on the market within a reasonable radius of the home, so you can sculpt your offer price. Be sure that you are comparing apples to apples in terms of updates, size of the home, amenities, location, schools districts, etc.

Once these steps are made, you are ready to write an offer.

Making the offer

Make yourself think like the seller. It helps you anticipate what the seller will accept in price, terms, and other conditions. By considering the sellers position, you will likely create an offer that is either accepted or strongly considered.

Your offer should be clear on the terms, closing dates, repair requests or other conditions the seller needs to meet and it should be accompanied by a letter from your lender that you are preapproved to buy the sellers home. Include a cover letter summarizing your strengths as a buyer in terms of creditworthiness, flexibility in closing, and the strength of the offer.

Dont insult the seller with an offer thats too low or requires too many concessions. The seller may be nostalgic about his or her life in the house and may not like the idea that you want to remodel.

The only thing a seller cant argue with is a strong set of comparables that show the home is overpriced or out of date. These are homes that have sold that are nearby within two blocks and similar in age, size and features. If you can show that a similar home has sold within the last two months for less than the seller is asking, thats good.

Be sure all conditions, repairs, etc. are agreed to in writing. Some sellers may feel that a handshake covers a promise, but its essential to be clear on paper what is expected and when. A sellers promise to paint should be included as an addendum to the contract and include all details, such as primer, exact color and type of paint, how many coats, and when the work will be finished for inspection.

Negotiating after inspections

The offer is negotiated and accepted, the earnest money is at the escrow agents office. Now the inspections occur, and this is where the contract negotiations can break down.

No home is perfect, not even brand-new construction. During the inspection process, the inspector is usually required to tell you about any condition of appliances, heating and cooling systems, roofs, electrical and plumbing systems, etc, and if your future home is up to current city codes.

Sellers are usually not required to bring a house completely up to current local building codes. Negotiate a repair only when a system is unsafe or a major repair is needed to make the system operate effectively.

As long as the seller has a reasonable explanation of what your position is and why, and communication remains open, the seller should have as much desire to make the contract work as you do.


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Design Tips for Upgrading Your Sunroom

The bones of your sunroom are all there - windows, floors, ceiling and maybe even some >

Big Changes for Big Effects

Take a good look at your space. What do you see? The "bones" of your space set the tone for everything that goes in it: this includes flooring, wall color or wall finish, ceiling, and other architectural elements that give your room its distinctive atmosphere. Tile and stained concrete are both tempting options for sunroom floors since they lend a breezy, sophisticated atmosphere to a sunshiny space.

Overhaul Your Floor with Tile

If youre looking to make a big impact with your floor, tile is a fantastic choicemdash;its sophisticated, you can do it yourself with a bit of practice and know-how, and your options are endless. Opt for a cozy, rustic brick feel, or perhaps Moroccan elegance with colorful tiles boasting a cool, casual feel. This Old House offers step-by-step instructions to lay your own tile floor. Keep in mind that when youre laying your own tile, the simpler the pattern, the better.

Treat Your Walls

For a Tuscan feel, go with a light Tuscan plaster wall treatment, and offset the coziness of your wall color with breezy, cream-colored sheer curtains or other light window treatments. Coupled with sophisticated furniture, youll love your understated Italian-inspired getaway, but make sure you dont overdo the accessories and clutter up the look.

Create an Atmosphere with Accessories Alone

If you live in an apartment or a rental home that doesnt lend itself to major overhauls, you still have plenty of options for updating your sunrooms look. ForRent.com offers countless ideas for designing your rented space. Something as simple as new patio cushions, candlesticks, brightly-colored pillows, or wall art can make your space look like something out of a design magazine. The best part about this kind of design: Its easy to overhaul your look without repainting Just view your space as a blank canvas, and fill it with colors and textures representing the >


Photo by Wickerfurniture via Flickr

Patio Cushions and Curtains

If youre handy with a needle and thread, sew your own patio cushions and curtains without paying the exorbitant prices that custom design firms charge. Check out SewMamaSew for step-by-step instructions to sew your own patio cushions.

Centerpieces/Decorative Accents

Paint is your friend here. The hardest part about this step is harnessing your creativity, so choose a palette and run with it. Try picking up some old candlesticks from an antique store or flea market, then update them with high-gloss paint. Going for a beachy feel? Print a few sepia-toned beach shots you took on your last vacation, then frame them in simple wooden frames youve painted to match your >

Woodworking Projects

Repurpose an old wood pallet into a coffee table that adds rustic >


Photo by Wickerfurniture via Flickr


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Nine Must-Haves For Your New Home, Valentines Day Edition

Sure, the right number of bedrooms is important. And, of course, you wouldnt even consider a house in the wrong school district. But what are the other things that really matter when buying a home? You know, the things that make your life easier - or at least a little less chaotic - on a daily basis and that support your life>

Whats true of >

The right location

If youve never had to sit in traffic for three hours a day, you probably dont know exactly how much it completely sucks. It may be worth it to you because a long commute is the only way youll be able to afford a home, but have a serious talk with yourself first.

The right overall layout

Sure, walls can be moved and floorplans reimagined, if thats what youre into. But some things you might not be able to change, perhaps because you lack budget or spacemdash;or both. If the idea of being on a different floor than your children stresses you out and you fear youll never be able to >

Enough bathrooms

Nothing kills the mood like having to squeeze your knees together while your honey is in the only or only functioning bathroom. If youve ever watched House Hunters and seen a couple buy an old home with one bathroom, which they justified because the place was "just so charming," let us set the record straight: Theres nothing charming about peeing your pants.

Dual sinks

So the house youre considering has an updated master bathroom, and what it lacks in space it makes up for in >

A good family gathering space

Whether or not you have kids or ever plan to, a good family room or living room is key to long-term enjoyment of a home. The amount of square footage is obviously important, but also pay attention to the key features of the room. Otherwise, youll end up with a space you hate being in because the west-facing windows make it too hot in the summer and too cold in the winter and the TV niche is shoved into the corner, making it hard to see unless youre sitting directly across from it. Or perhaps thats just us.

Upstairs laundry

Back to House Hunters for a moment. Who else cringes every time someone buys a house with a laundry room in a creaky old basement? Just the thought of having to carry laundry baskets down two flights of stairs is enough for us to say a hard "No" to that. Many basement-free homes have laundry rooms on the first floor, when all the bedrooms are upstairs. This may be an acceptable feature for most peoplemdash;and it may be all youve known to this pointmdash;but trust us: Once youve enjoyed the convenience of an upstairs laundry room, youll never want anything else.

A sufficient garage

Burning your butt on a hot car seat in the summer and having to run the engine for 10 minutes before you get into a freezing cold car in the winter might anger you every single time you do it.

The right size backyard

Taking the kids to the park instead of letting them loose in a backyard you dont have. Getting out of bed to walk the dog in the middle of the nightmdash;and in the rainmdash;because, again, no backyard. Not having a backyard at all, or a tiny patch of grass that doesnt give you space to move, might not be the kind of compromise you want to make. On the flip side, a large back yard that requires time and effort to maintain may take away from family time and create stress or anxiety.

A kitchen you can work with

Yes, you can replace a dishwasher or repaint your cabinets. Heck, you can rip the whole thing out and start over if you want, but most people arent looking to drop that kind of money on a brand-new kitchen. Is the kitchen workable as is? Are there small tweaks you can make that would create a space you want to cook in? Being honest with yourself about what you need, what you can handle, and what is realistic can help you make a good choice instead of one you may soon regret.


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Home Seller Tips To Having A Successful Open House

Holding an open house for your soon-to-be-listed or newly on the market home is a lot like being on a game show where edging out the other contestants in a short period of time is key. In TV game shows, such as "Jeopardy," the contestants donrsquo;t automatically know answers to so many trivia questions; they study and they plan and they make it appear to viewers like they walk around with that body of knowledge every day. Open houses need to be thought of similarly. Once your home is on the market, an open house is your opportunity to plan and strategize how you are going to win over buyers in very short time.

Even in a strong real estate market where houses sell quickly, itrsquo;s still important to ask your agent to hold as many open houses as possible until the home sells. One reason is that even buyers with agents still like to look at homes on their own without feeling the pressure of a home tour. Sometimes their agent is out of town when your house goes on the market. Many buyers are not represented by an agent and the only way for them to tour a home is through an open house. Your agent will plan the open house to include everything from signage to freshly baked cookies. As a seller, you should take the following steps:

Depersonalize

Back to the game show analogy, think of depersonalizing as studying the answers and questions before trying out for "Jeopardy." Your house is lovely for how you live in it, but buyers donrsquo;t want to see you in your house. In fact, the more your house makes it difficult to guess who lives there age, >

Declutter

While you are depersonalizing itrsquo;s also a good time to declutter as the two go hand in hand. The more simple and understated your home is, the more likely buyers can see the home for what it is and imagine themselves in it. When you have too much stuff cluttering walls and counters and shelves, buyers turn their focus toward those things and sometimes even make the assumption in logic that if you are cluttery, then you are disorganized, which means maybe you donrsquo;t take care of the house as well or as on time as you should. A good rule of thumb is to box up or store at least half of the smaller items displayed in your home.

For example, how much is on your kitchen counter right now? Now imagine reducing that number to just three things. What would you choose to keep versus store? Some sellers are benefited by going to other open houses in their area and looking at how other people have decluttered and arranged what is left. Online pictures, such as what is found on Pinterest, can help too. Often you can get some good ideas on what works visually just by seeing how others do it. When you are all done decluttering, clean your home like never before because buyers notice dirt and grime. Hire a maid service if you have to.

Lure Them In

The outside of your home is as important as the inside, especially the front entry area. Before an open house, take care of simple yard maintenance such as mowing, edging and weeding flower beds. A fresh layer of mulch adds color especially in winter months when not much is blooming. At your front door, clean off spider webs, blown leaves, and place a large, colorful pot of annuals or anything you can buy in season.

Complete Your Honey-Do List

While you have the yard power tools out, dust of your workbench and take a walk around your house inside and out. Make a list of all maintenance issues such as wiggly door handles, missing fascia, paint that has chipped, etc. and repair them before the open house. Buyers see even the smallest of maintenance issues as an extension of the condition of larger items such as roofs, plumbing and major appliances and assume you havenrsquo;t taken care of the home. You might talk to your realtor about a pre-inspection to deal with all home maintenance and problems upfront, before you get into contract with a buyer.

Be Cautious

Once you have taken the above steps and you are ready for the actual open house, therersquo;s one last thing to plan. Protecting your valuables and identity. It might be rare, but criminals do use open houses as a way to case a house or to find collateral to steal identities. Make sure indoor safes are locked and hidden. Store heirlooms, checkbooks, prescriptions, and valuable jewelry away from prying eyes. Utilize a >


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Death And Taxes: Not Always Inevitable

Question. My husband recently died of a massive heart attack, leaving me a widow at a young age. I was thrust into a new life status that was not my choice or my desire. I believe I am being penalized for something that has already devastated my life in many ways.

We were fortunate to have invested wisely in our principal home many years ago, and have made more than 250,000 in profit. I want to sell, and it now appears I will have to pay the tax on any profit over 250,000, since I no longer file a joint return. If couples are making the life choice to divorce, they can sell their home prior to the divorce and get the 500,000 exemption recently enacted by Congress. A widow has no option or choice in the change that has happened in her life.

Please advise me how I should proceed; I need the money for my future more than the government.

Answer. It has often been stated that two things are inevitable: death and taxes. However, there is a measure of hope based on an often forgotten concept in the tax law known as the "stepped-up" basis. And, fortunately, this was not modified or repealed under the new tax law that was just enacted.

Oversimplified, this means the value of a persons real property on the date of his/her death becomes the basis of the person who inherits that property.

Let us take this example: in 1995, you and your husband purchased your first home for 100,000. You took title as tenants by the entireties -- which is the common form of ownership for married couples. Your husband died in 2017, and the property was valued at 800,000 on the day he died.

Your basis is as follows:

Initial basis: half of purchase price 50,000

Inherited stepped up basis: 400,000

New basis: 450,000

Please note that since the property was worth 800,000 on the date your husband died, you inherited his half of the property -- namely 400,000.

If you sell your property today for 800,000, your profit before excluding such items as real estate commissions, legal fees and fix-up costs will be 350,000 800,000 - 450,000. As you correctly pointed out, since you are now filing a single tax return, under the current tax laws, you are entitled to completely exempt the first 250,000 of this gain. Once again, Congress did not repeal or amend this important homeowner benefit.

Thus, your capital gain tax will be on 100,000 350,000-250,000. Because the income tax brackets were changed under the new law, please talk with your financial advisors as to what your tax obligation will be.

However, lets analyze this even further. Did you and your husband make any improvements to your house over the many years of your ownership? If you put on a new addition, installed a new kitchen, or significantly improved the back yard, all of the costs of these improvements are added to your basis. Thus, if the costs of your improvements were at least 100,000, you will not have to pay any capital gains tax at all.

Furthermore, try to find the settlement statement when you first purchased the property. There were a number of costs which you incurred -- title examination, title insurance, legal fees -- which can properly be added to basis.

Keep in mind that for every dollar you add to basis, you are going to save from paying capital gains tax. Clearly every dollar can add up to a considerable tax saving.

Although you did not raise this next issue, I want to take the opportunity to comment on a question I often get: should you put your children on title now?

Generally speaking, my answer is no. The reason is the same as discussed above -- on your death, your children will get the benefit of the stepped up basis, and indeed under the circumstances may not have to pay any capital gains tax. For example, were you to die when the property is valued at 800,000, if your children sold the property for this price, they would have no gain at all -- and thus no tax to pay.

However, if you were to gift them the house now, during your lifetime, their basis for tax purposes would be your basis -- i.e., 450,000. The law requires that the basis of the donor becomes the basis of the donee. If they sold the property for 800,000 -- and the house was not their principal residence -- they would have to pay capital gains tax on profit of 350,000 800,000 - 450,000 At the maximum rate, this could be a nice gift to Uncle Sam.

You must, of course, fully discuss these issues with your tax advisors. These are not easy questions, and the answers are even more complex.

So much for "tax simplification."


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The HOAs Maintenance Plan

The purpose of a Maintenance Plan is to instruct a homeowner association board and property manager how to properly maintain common element components. Following a well prepared Maintenance Plan will help extend the useful life of the components and reduce costs to the members.

An effective preventive maintenance plan should satisfy the following five key goals:

1. Preserve owners investment. Preventive maintenance can extend the life of building components, sustaining and enhancing the propertys value.

2. Help buildings operate at peak efficiency. Because preventive maintenance keeps equipment functioning as designed, it reduces inefficiencies in operations and energy usage.

3. Prevent failures of building systems. Buildings that operate trouble-free allow the occupants to enjoy the property as intended. Preventive maintenance includes regular inspections and replacement of equipment crucial to building operations.

4. Sustain a safe and healthy environment. Protecting the physical integrity of building components preserves a safe environment for residents.

5. Provide cost effective maintenance. Preventive maintenance can prevent minor problems from escalating into major failures and costly repairs. Preventive maintenance can be handled >The objective of the Maintenance Plan is to provide clear direction to the board and management how and when to provide repairs to building and grounds components. If consistently followed in conjunction with a properly prepared reserve study schedule, the components will enjoy their maximum useful lives and >For more innovative homeowner association management strategies, see www.Regenesis.net.


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Get Ready to Buy This Spring

Once you decide that this Spring you want to buy a new home mdash; or your first house mdash; the question is, "Where do we start?"

The answer lies in two sets of decisions:

1. Start With Success: Begin by deciding what success means to you. Clarify what you really want and why, not just whats "in" right now. Explore this practical side before viewing properties. What matters is not the number of homes you see, but zeroing in on genuine good matches. For instance, a couple who wanted to add a mortgage-paying basement suite to their next home, decided to search for houses with an existing basement bathroom since this would be the most expensive part of creating a rental unit.

2. Whos "We"?: The other essential to a good start is to decide who "we" is going to be:

If you want to buy this Spring, when should you start?: How quickly you can find a home to buy and move into it depends on many factors:

Somewhere in between those extremes lies your ideal time line:

Real estate professionals, committed to understanding market pace in areas they work, can help you manage timing. One thing they may suggest, is not to wait for the Spring Market, but to get ahead of the mass of spring buyers and jump into real estate now. For instance, sellers who are listed now are serious about selling and, depending how long their property has been on the market, they may be more receptive to negotiation.

Whether you decide to wait until Spring or jump in now, here are Five Savvy Buying Tips that ensure youll get the best property for your needs, at the best price, with the minimum amount of hassle and disappointment:

1. Apply Smart Buying Rules: If you consider yourself a smart buyer when purchasing a car, a phone, or travel, apply that savvy to buying real estate. Understand what you need and why. Set a realistic budget. Learn how things work. With all these issues, the right professional should save you time, stress, and money.

2. Ensure Location Overrules Features Decor: Real estate is an immoveable object. That reality dictates that where you buy is the prime value concern. Smart buyers look for the least property in the best area, so their real estate improvements result in increased market value. Values within a neighborhood or community are not uniform. There are specific streets, even ends of streets, that represent the highest local value just as boundary streets and other locations may represent lower prices. Particularly in urban areas, proximity to the most highly-regarded schools, popular shopping areas, and sought-after local features like parks dictates price, as your real estate professional will explain.

3. Maximize Move-In Timing: The more flexible your move-in date, the more room to negotiate with sellers. Agree to their ideal move date and that may generate concessions in price or inclusions. When you have a fixed move-in date, you may find yourself paying more to buy what you want, when you want it. Timing is a significant consideration when deciding whether to buy your next home before you have sold your current property, that is, taking the risk of paying on two mortgages at once. Since the market where you are selling may be different from that where you want to buy, timing decisions should involve the experience of a real estate professional or two.

4. Own The Money Factor: Affordability encompasses costs ranging from purchase price including legal fees and other costs, mortgage financing, and the cost of customizing the living space to including ongoing expenses like heating, cooling, commuting, and anything else that matters. With mortgage rates on the rise, reducing consumer car loans and credit card debt may open up borrowing room.Mortgage professionals can help you shop a wider range of lenders. These money experts can also explain why there is so much more to consider than just interest rate.

5. Face Reality Head On: Compromises to your "must have" list can maximize value and returns.

Most people have more real estate choices than they realize. Are you sure you want to wait for Spring to get started?


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New Recording Fees Will Fund Affordable Housing

Effective January 1, 2018 there is a whole new set of fees that will be charged to Californians who are recording real-estate->

It is important to note that it is not the kind of instrument that is important, but, rather, the context in which it is being recorded. If, for example, you are refinancing your property, part of the transaction involves recording a new trust deed. That will cost you 75 in addition to whatever other costs might be incurred. If, however, you are recording a trust deed in connection with the sale of a property, the extra charge will not be imposed.

Also, no charge will be imposed on a transfer of property -- even if it is not a sale -- to a person who will be an owner occupant.

What kind of documents might a property owner want to record, even if no sale is occurring? A short, incomplete, list might include: deed of trust, reconveyance, assignment of trust deed, declaration of homestead, easement, mechanics lien, notice of completion, and covenants, conditions, and restrictions. Theres plenty more, and they all cost an extra 75 a pop up to 225 per transaction.

This is all the result of Senate Bill 2 Atkins, the Building Homes and Jobs Act, which the Governor signed into law September 29, 2017. It made additions to both the California Government Code 27388.1 and the Health and Safety Code 50470.

The purpose of the bill was to provide a permanent source of money that could be used to provide, "an adequate supply of homes affordable to California at all income levels"

Prior to this, affordable housing programs, including those to assist the homeless, were financed through voter-approved bonds and through a 20 set-aside that was imposed on redevelopment agencies. Bonds do not provide a permanent source of funding, and nearly all the existing voter-approved funding had been awarded. Moreover, redevelopment agencies have been eliminated.

According to the Legislative analysis, California has a shortfall of approximately 1.5 million affordable units for low and very-low income households. This includes rental housing. Furthermore, with 12 percent of the U.S. population, California has 20 percent of the nations homeless population. It is estimated that 118,000 Californians are homeless on any given night.

According to the Senate Appropriations Committee, the new fees will generate 200-300 million annually. SB2 specifies the manner in which the funds are to be spent. In the first year, half of the money will go "to local governments to update their general plans, housing ordinances, and other planning documents to increase the production of housing. The other half of the funds in the first year will go to assist people who are homeless or at risk of homelessness. In all subsequent years, the bill requires 70 of funds deposited into the Trust Fund to be distributed via formula to cities and counties to be used in a variety of ways to address the unmet housing needs of the jurisdiction." For a full and more detailed accounting of the use of the Trust Funds, the reader is invited to check out 50470 of the Health and Safety Code. It is very detailed.

Since the implementation of Senate Bill 2, the California Association of REALTORS CAR has received complaints "that title companies and potentially some county recorders have been improperly charging buyers for exempt documents." The association has prepared a variety of documents to assist property owners in preventing and/or recovering inappropriate overcharges. They are available to REALTORreg; members on car.org.


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Creative Ways To Save For A Down Payment

Youd love to buy a house, and if it werent for that pesky down payment, youd be sitting pretty in a place of your own, right? Youre not alone. Not surprisingly, the "top challenge for would-be homebuyers is thedown payment requirement," said The Mortgage Reports. In a recent study, "Over half of potential buyers claimed saving a down payment was a bigger issue thancredit scores, income needed or housing prices."

There are some creative ways to get there.

Look for down payment assistance

Many homebuyers dont realize that these programs even exist. "Down paymentgrants are designed to help eligible buyers bridge the gap between their savings and the required down payment for a mortgage," said The Mortgage Reports. "This money doesnt usually have to be repaid."

Grants are available through the Department of Housing and Urban Development HUD and typically have eligibility requirements that are tied to income. In addition, "You must be a first-time buyer purchasing a primary residence," they said. You can check for available grants here.

Save your pennies

Every little bit helps Get used to paying for things with cash, which is another tip financial analysts recommend to keep track of spending. At the end of the day or week, put aside any change. Youll be surprised how it can add up over a few months.

Shop for a better savings account

Some banks offer special rates or even kick in money if you open a new account and maintain a certain balance. If you already have a good head start on your down payment, this could be a great way to get a bump. Also pay attention to any fees you are currently paying at your bank just to have your savings and checking accounts. If you cant negotiate to get them removed, it might make sense to open fee-free accounts elsewhere.

Among the best out there: "Discover Online Savings has no minimum deposit requirement and offers a competitive APY of 1.40. In addition, theres no monthly fee and no minimum balance requirement," said NerdWallet in their review of the best savings accounts of 2018. "Discover is a decent choice for simple, stress-free savings." Discover also offers bonuses that are tied to a 15,000 minimum deposit.

Do automatic transfers

Setting up an auto transfer from your checking to your savings on payday is a >Get a gift

For many types of loans, the down payment can come via a gift. Just make sure you know the rules so you dont run into trouble. "Even though lenders do allow gift funds, they also require mortgage applicants to disclose the source of these funds," said Cherry Creek Mortgage. "There are specific rules for using gift funds as a down payment. For starters, your lender will need information about the donor. Donor requirements vary by lender and mortgage program. Some programs only allow gifts from a blood >Save all raises and bonuses

If you get a raise or a bonus during your saving period, dont celebrate by blowing it on a new living room set. Pretending it didnt happen and socking the money away will pay off in the end. "For a set period of time, consider saving all extra income you receive from work," said Quick and Dirty Tips. "For instance, if you get a 3 raise, increase your down payment savings percentage by at least that amount. Or if you get quarterly or annual bonuses, transfer the full amounts to savings."

Shift some money toward repairing your credit

That might seem counterintuitive if youre trying to get together as much cash as possible to buy your house, but it might just be that doing a little credit repair can improve your buying position, which could lower your interest rate and lower the amount of money required by the bank for your down payment. A conversation with your lender or broker and a detailed look at your credit history may yield some surprising suggestions.

Pare down

This is a great time to take a good look at your stuff and decide whats going with you, and whats not making the trip to your new place. "You likely have some used furniture you no longer use or old clothes that are no longer in >Call your cable, Internet, and phone providers

There may be lost money floating around out there. Bundling your services with one provider can create dramatic savings. It might also be time to look at new providers - just make sure you wont incur a penalty or cost when you move and have to have your services set up again.

Make your coffee - and your lunch - at home

"If there are two people buying one coffee each at 4 every day, or 8 total, that adds up to 240 per month So by getting a good coffee maker and putting it in a TO GO cup, you can potentially save more than 2,880 over the course of a year," said Blue Water Credit. "If you think coffee was expensive, add up all of those 12, 20, and 25 lunches at restaurants when you step out from work. Even if you only buy lunch three times a week, that could easily end up with 50 a week in savings per person, or about 400 a month, or 4,800 per year"


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Tips For Creating A Luxe Bedroom

Creating a >Get the lighting right

You dont want to feel like youre being interrogated in the bedroom. Super bright lights dont set the mood, nor are they useful for helping you to >Choose the right color

Fire-engine red walls will create energy, which could be helpful to your love life, but might keep you up at night for all the wrong reasons, too. Use the principles of Feng Shui to choose colors that will help "bring the best energy into yourspace," said MyDomaine. According to certified Feng Shui expertLaura Cerrano, earth tones, beige, and cream are "ideal for someone looking to create a restful bedroom," while colors like blue, blue-green, and black "can translate into a deeper connection between you and your partner."

Indulge in a luxurious headboard

A headboard isnt just a finishing touch to the room. Its an essential part of the space that gives it a well-put-together, finished look and that also make the bed feel plush. "An attractive headboard will really make a statement in your bedroom and transform the space," said Houzz. "It will also make your bed a much more comfortable place to be.When choosing a headboard, think about the size of your room and the height of the ceiling to get the proportions right. If you have a really high ceiling, you can afford to scale the headboard accordingly to create a real impact."


pinterest.com

Pick cushy sheets

Theres just no reason to live with scratchy sheets. High thread counts matter, and they can get expensive. But the weave and fabric of the sheets can also help them to feel more - or less - comfortable. Business Insiders exhaustive test of the best sheets came out with a clear winner: "After reviewing dozens of contenders, our top pick for bed sheets are the280-thread-count Pima Cotton Percale Sheets from L.L. Bean," they said. "Crisp, cool, and comfortable against your skin, these sheets make bedtime a treat."

Add texture

Creating any stylish space is about layering, and the bedroom is no different. Start with the bed. "Dont be that person with just a top sheet," said Elle Dcor. "Okay, we know youd never commit that cardinal design sin, but in our opinion, layering is key to a beautiful bed. Throws, bed runners, the works It will give your space an instantly glamorous upgrade, plus youll be beyond cozy in the wintertime."

Wallpaper or a feature wall behind the bed and accessories like cushions and decorative items sprinkled throughout the room can add another layer of interest.


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Lessons Learned From a Master Bathroom Remodel

Ive never really shared my own home with you before, and Im a little nervous. But I learned so much from my recently completed bathroom renovation that I wanted to tell you about it.

The project started out as a fairly light makeover but blew up quickly as it evolved. I am not an interior designer, but the wealth of information and inspiration Ive gleaned from interviewing hundreds of them over the years was a big help throughout the process.

Bathroom at a Glance:

Who lives here: Homeowner and Houzz contributor Becky Harris
Location: Atlanta
Size: About 100 square feet 9.3 square meters
Contractor: Innovative Construction

Bathroom Before

It all began with this grungy shower stall. I dreaded showering in here. First of all, it was tiled in travertine. Not super-pretty vein-cut travertine but just yucko builders-special travertine that was popular in the late 1990s and early 2000s. No matter how well it was sealed and scrubbed and resealed over the years an expensive process, it was porous and a magnet for mold. And then there was no cleaner I could use to get the reddish iron marks from Atlantas water out of the grout without removing the sealant. A built-in moldy bench made the shower feel cramped. The dated framed translucent glass surround never felt clean and made it feel even more cramped and dark. And there was just no way to get some of the grunge out of that frame.

By Becky Harris - See more Home Design Photos

I should mention here that I did not receive any discounts or special treatment in exchange for this story. But my brother owns the construction company that completed the renovation, and he passed along his friends-and-family trade discount perks at a few vendors. He also stayed far away from being involved in my project. I cant imagine why.

By Becky Harris - See more Home Design Photos

What I learned: Wow, you really dont see your own clutter until you take a photo of it. Or is that just me? I also learned that it can be hard to take a good, well-lit "before" photo. This one is dark even though all the lights are on and the blinds are open. Hey, at least my toilet seat is down.

I really liked this vanity, and I wanted to try to preserve the countertops. They were made of reclaimed pine boards from my attic floor and were about 80 years old. Thats a good trick to know, by the way. An older homes attic floorboards are a great source of reclaimed lumber. The mirror frame is made of the same wood. Although I knew that tiling the wall and placing mirrors atop it would be a more updated look, I loved having this huge mirror and decided to keep it. It bounces so much light around and makes it easy to get ready in here and check my hair and makeup.

I used to have beadboard wainscoting around the room. But what I had noticed was that dust and grime would collect in the grooves of the paneling and be hard to get out.

Photo by Innovative Construction Inc. - Look for bathroom design inspiration

The inspiration: Once I found this tile, most of my plans revolved around it. Warm gray, light blue-gray, charcoal gray, black and white, and powdery blue came into play in my color palette.

The meeting: So on day one of the construction process, several of us crammed into my bathroom. My brother, Clark Harris; his second-in-command, Eric Bain; my projects day-to-day manager, Junior Zenil; and Clarks amazing office manager, Aisling Bell. They looked at what would be changing and approximated the schedule.

Eric, whom I know pretty well and know to be fairly fiscally conservative and often a man of few words, kept looking at me and saying, "Radiant heat would feel really nice." I mean, if Eric was in favor of heated floors, that was powerful. As they looked at the adjacent closet, which was carpeted, they suggested extending the heated tile floors in there as well. Now the closet became part of the project, just like that, and I was going to go for heated floors. The radiant heat portion added about 1,500 to the budget. And I cant wait for it to get cold outside.

What I learned: Be prepared for a mistake. One thing my brother said to me as he very officially went over everything we were going to do was, "I tell all my clients that there is probably going to be a big mistake made along the line. Just know that when it happens, we will fix it, and it will be fine." I thought this was a very smart thing to say. Also, the morning after a mistake did happen, Eric brought me an Egg McMuffin and a regular Coke, the first one Id had in many years. And the team fixed it that day.

Liria Negro encaustic cement tile: The Tile Shop

By Becky Harris - See more Home Design Photos

Prep Day

What I learned: Living at home through a renovation will make you feel like John Travolta in The Boy in the Plastic Bubble. They prepped by laying down cardboard over my floors along the path from the front door to the bathroom and creating a plastic tunnel that led upstairs from the front door to keep the house from filling with dust. Zipping and unzipping plastic doors to get to certain places in my house became the norm.

They also vacuumed and swept their way out the door each day. Ask your contractor if the team does this when youre getting your estimate. Also make sure items like the dumpster and the port-a-potty are included, along with their servicing. Youll find that unrealistic low-ball offers leave out necessary line items like this.

By Becky Harris - See more Home Design Photos

Demo Day

What I learned: Demo day is crazy. It was good to get out of the house to shop for faucets and fixtures because the noise from demolition was unreal. Earplugs were fine while I was writing stories, but I dont know how I thought I could attempt phone interviews with Houzz pros while this was going on. I had planned to make the calls from my porch, not remembering that my porch is just below my bathroom and it was even louder out there.

What I learned: While you have a dumpster in your driveway, make good use of it. Although I did not go full-on Marie Kondo, I completed a major purge, donating and recycling whatever I could along the way, but throwing a few things that were no good for anyone into the dumpster. It felt great to get rid of so much. When I was done, I also had 15 lawn bags full of stuff for two charities that picked up the donations on my doorstep. Both of these charities send email alerts about once a month with dates theyll be in the neighborhood. Ever since the big purge, I keep a donation bin going and try to sign up every time, knowing that it will spur me to clean out another closet or cabinet by the deadline.

Project Management

What I learned: I am not much of a techie, but project management software was helpful. Innovative Construction set me up with an app, which was a great tool for all of us to communicate. I could keep up with the schedule, invoices, paint colors, lighting choices, work order changes and everything else right from my phone.

Shopping List

Aisling provided me with a thorough checklist of what Id need to procure for my project, with vendor and showroom suggestions and other tips on the app.

What I learned: Sometimes the highway falls down Around day six, the portion of Interstate 85 where I usually hop off and on caught fire and collapsed, which put a crimp in my plans for running around Atlanta looking for tile and faucets and lighting. I was able to check out a lot online before braving the crazy traffic to hit the showrooms and walk to stores.

What I learned: I saw the true power of the traffic-navigation app Waze. I also learned to order things way ahead of time. Almost everything I ordered was on back order, double back order, triple back order or we-have-no-idea-if-it-will-ever-be-ready back order mdash; or it was made-to-order, broke on the way to the store, got lost within the store once it arrived intact or is still missing in action and untrackable. There is still one toilet for the downstairs bath I was going to have installed while I had a plumber in the house that su>

Had I been less picky and ordered way ahead of time, the renovation would have taken about five weeks. Due in large part to a chandelier I simply had to have, the job ran from April 1 to mid-July, though the bulk of it was done in two months. This was solely due to my back-order curse.

Shower

What I learned: Be flexible and find a great associate at showrooms to help you. I was really set on all antique brass, but I also knew that I wanted some graphic black and white in the bathroom. Beth Moon at Plumbing Distributors, or PDI, was instrumental in the decision to mix in matte black fixtures by Jason Wu for Brizo in the shower. I also learned to always use the restroom at a bathroom showroom; PDI has a luxury toilet that does everything except hand you toilet paper, and it is quite an experience.

What I learned: In your initial meeting, ask the plumber which brands he or she loves to work with. They will have good insights about which fixtures they install with ease, which may have the rough-ins ready and which will have replacement parts readily available if you need a repair down the line. It can help inform your decisions when you are shopping for fixtures.

Photo by Innovative Construction Inc. - Search bathroom pictures

Shower tile: I have loved >

And after writing "pebble tile feels wonderful underfoot" so many times for Houzz, I wanted my feet to feel wonderful too, so I found a reasonably priced granite pebble tile at Floor amp; Decor.

What I learned: Pebble tile feels wonderful underfoot. Also, I learned the hard way to make sure the grout is totally dry before you try to feel how wonderful the pebble tiles feel underfoot. Whoops.

Subway tile: Daltile; Absolute Black granite pencil-tile trim: Floor amp; Decor; Delorean Gray grout: Home Depot

What I learned: Although I had a very dark charcoal, almost black, grout picked out for the shower floor, the tiling crew made me realize that the pebbles were not black and that the grout I had chosen would look bad.

What else I learned: Some details dont matter that much mdash; let some things go. I had ordered a very design-y black square shower drain that worked well with my shower fixtures, but I forgot to communicate that with the tile installers or enter it on the app. When I saw they had installed a round one, I realized that it worked better with the pebbles anyway.

Photo by Innovative Construction Inc. - Look for bathroom design inspiration

What I learned: Some details do matter. Because matte black is a >

What else I learned: Sometimes when you think youre being crafty and tracking down the exact Ladder Pull you want online, they accidentally send you a different item directly from China instead. But they eventually straightened it out.

Tub faucet: Fortuitously, I happened to choose a tub faucet with cross handles rather than lever handles. The plumber let out a sigh of >

Roman tub faucet : Newport Brass

Photo by Innovative Construction Inc. - Browse bathroom ideas

Toilet Room

I decided to go for a comfort-height toilet in the bathroom. This Memoirs model from Kohler has a really nice top on the tank with an edge that keeps things from falling off.

What I learned: This paint color changes dramatically from day to night. Its a light gray, but at noon, it has a very bluish look. At night, its a true gray.

Gray Screen SW 7071 wall paint and Ceiling Bright White SW 7007 trim paint: Sherwin-Williams; bath mat: Urban Outfitters; shower glass: Chattahoochee Shower Doors; Memoirs Stately two-piece toilet: Kohler via Houzz; robe hook: Anthropologie

What I learned: Not many people can pull off looking fierce when hung over a toilet. But Diana Ross can.

"Diana Ross Goes Shopping, 1965" photograph: Michael Ochs Archive via One Kings Lane; light fixture: Restoration Hardware

Photo by Innovative Construction Inc. - More bathroom photos

Counters

Somewhere down the line, I realized that I didnt want to have all this work done only to have my reclaimed-wood counters eventually rot and ruin the whole thing. They had put in a good 15 years but had some damage around the faucets, and, sadly, it was time for them to go. I planned for some practical, durable quartz instead.

What I learned: Its highly likely that once you see Statuario Venato marble at the stone vendor, youre not going to want quartz anymore. I went for the marble.

What else I learned: If you have a waterfall countertop with a prominent veining pattern like mine, have the installer place the template pieces continuously on the stone slab. That way the veining pattern continues down and across, uninterrupted. Also, make absolutely sure that you are present to approve the templating on the slab and that you take a photo of it while youre there. I worked on the countertops with Simona Tivadar at Custom Kitchen. She has great taste, and with her keen eye, she also helped me figure out which backsplash tile was just the right white to complement the marble.

The photo: I need to get that photo on the wall professionally matted and framed, but I didnt have time before photo shoot day. Its an iconic photo within my family of my giant dad in a tiny claw-foot tub giving the victory sign back in the 60s. My uncle Tommy Calder took it back then. He tracked down the negative and had it blown up for me.

Pewter Cast SW 7673 vanity paint: Sherwin-Williams; hardware and glass shelf: Anthropologie; Irvine double sconces: Schoolhouse Electric amp; Supply Co.

Photo by Innovative Construction Inc. - Look for bathroom design inspiration

Shower Niche

What I learned: Unless you have really detailed drawings from an interior designer of where every piece of tile will go and how it should be cut, you want to try to be around during tile installation. There are small design decisions that will come up on the fly.

For example, I had pieces of marble cut for the shower threshold, the top of the half wall and the shower niche from the same slab as the countertops. I then had the tile installers put in a border of the same Absolute Black granite pencil-tile trim around the inside. There are also funky things that will happen around corners and in tighter spaces where you may want to give your input on the pattern, even with something as simple as subway tile.

Storage

What I already knew: I hoard. As was obvious from the "before" photos, I have a problem with countertop clutter. So I invested in a large medicine cabinet to hold everyday stuff. Also, the huge drawer clean-out I had to do on the vanities so that they could be removed and painted provided a ton of new storage space. I also knew that I was stretched for towel storage so I bought a train rack for them mdash; no more towels shoved willy-nilly in a cabinet under the sink.

Make use of things or ditch them. I organized my shampoo, conditioner, lotion and face cream samples that were still usable in a hanging cosmetic bag. I hung it on the back of the door and vowed to use them every day. I havent had to buy a bottle of any of that stuff for several months now as I go through them all.

Photo by Innovative Construction Inc. - Browse bathroom photos

Splurge: Besides the sink faucets and the heated floors, my other big splurge was this fabulous beaded chandelier. With such a high vaulted ceiling, the room really needed one. It appears somewhat turquoise in this photo, but its more of a powdery blue in person.

Savings: I reused the original vanities, mirror and bathtub. The planks were already on the ceiling, and I already had great doors with hardware that worked well with the new finishes.

Although I think a freestanding tub would best suit this space, I love the very nice Jacuzzi bathtub that came with my house, and the thought of anything less comfortable gave me pause. Plus, tubs are expensive.

What I learned: Keep your eye on the price of your back-ordered items. If you see that something has gone on sale while you are waiting for it to arrive, call the retailer.

This renovation experience was so educational and a lot of fun. Some days, I even miss the plastic and all the activity. If you have any questions, please ask, and Ill do my best to answer them.

Malibu beaded six-light chandelier: Regina Andrew via Horchow; train rack: Restoration Hardware

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Updated: Tuesday, February 20, 2018

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