Real Estate: What Is Important When Buying or Selling

This Whole Web Site Is About Real Estate

In this section of my web I try to provide wide ranging information about real estate. Perhaps I should call it miscellaneous.

Various Factors Affecting the Value of Real Estate

• Health and condition of the economy.
• Mortgage rates.
• Neighborhood reputation.
• Reputation of schools.
• Condition of the home.
• Previous local sales history.
• Demographic trends in the neighborhood.

Health and Condition of the Economy

I do not have a crystal ball that I can predict the future with. Being a full time professional, I do have a very good feeling of how the real estate market is doing. I post sales statistics so that everyone can have a look at the numbers. If you are trying to make plans, I believe talking with me could help you see more than just the numbers.

My current computer generated real estate sales and real estate statistics.

For over 30 years we have been blessed with the innovation and entrepreneurial spirit of Silicon Valley. When a segment of the economy has matured and even declined, there has been a new idea growing in strength to provide jobs and economic health. This constant leading edge innovation has attracted many new well educated, highly motivated people to our area. The flow of these new workers drives the price of our real estate higher. The inflow of talented people nurtures and adds to the innovation. Personally, I believe Silicon Valley will continue to grow and remain healthy and vibrant for the rest of my life.

Mortgage Rates

The cost of borrowing money affects housing prices in several ways. Even in our area of high priced homes, wages account for a large portion of the buying power. If mortgage rates go down, those wages can buy a more expensive home. As our area continues to attract higher paid people, the price of a home bought depending upon wages continues to climb.

Many of the people in Silicon Valley have substantial investments. These investments are moved to areas where they will bring the greatest happiness to their owners. If an investment in a simple certificate of deposit can bring quite high yields, the money is less likely to be spent on real estate.

My Mortgage Calculator provides a quick way to find the payment for a mortgage.

The FHA has loan programs which are beneficial to some home buyers. However, not all condominium projects are qualified for FHA loans. The HUD.gov web site has a page which allows you to see if a condominium is qualified for an FHA loan.

Distressed Property Mortgages

The U.S. government has created several plans to help buyers obtain mortgages on distressed properties. The FHA created the Section 203(k) program to insure loans which are used to purchase and rehabilitate distressed properties. A standard mortgage will not normally be issued for properties which require significant repair. The Section 203(k) program provides opportunities for the buyer to obtain a single long term mortgage to purchase and repair a home. The FHA has posted information about the 203(k) program on the HUD website. Ask your loan broker for more information if you are interested.

Fannie Mae makes financing available for Fannie Mae owned properties through the HomePath.com program. The HomePath.com website provides the capability to search for Fannie Mae properties.

Neighborhood Reputation - Location, Location, Location

The old mantra about the three most important things to look at when buying a home: location, location, location does not over-state the importance of the neighborhood's reputation. I provide information about our different communities both to help inform buyers and sellers but also to help build stronger more enjoyable communities.

Please visit my cities area, which is listed on my main menu at the top of each web page.

Schools

Schools are vital to our community. They directly affect the ability of both our current wage earners and our future wage earners to make our local economy healthy. Most families with "school age" children attempt to find a home where the schools are well respected. Working people want to be able to improve their lives. Education is an important building block to reach that goal. Many of our retired residents are attracted to both living among well educated people and having opportunities to pursue new ideas.

I provide information about public schools in my community area.

Condition of the Home

Obviously a home that is attractive and only needing routine maintenance will be worth more money than one that is not. Silicon Valley is constantly changing. Both current residents and new residents are often attracted to houses that are different from what was often sought in the past.

Avoid water damage provides suggestions of simple actions that can save you money.

Previous Local Sales History

Although Mark Twain's often quoted statement may make you have doubts about the value of statistics, I provide as accurate and up to date sales history numbers as possible. When a house is purchased with the aid of a mortgage, the lender will want to be confident that the house is worth at least as much as the value of the mortgage. A dramatic increase in the price of a home beyond that of similar homes is often considered very risky. Even buyers are hesitant to pay a price dramatically higher than recent history provides.

In addition to my monthly sales statistics I provide less frequent sales statistics for many individual neighborhoods. These can be found in my communities area. One example is for Palo Alto.

Demographic Trends

If many people from a different background are moving into our community, the desirable features of a home will change. As people age or the wealth changes, they will look for different things in a home. Fortunately we can all make our homes worth more by making our communities more enjoyable. A community that embraces the best of the what is new while keeping the best of what is old is more enjoyable and prospers. I believe strongly in supporting local public education. I support Partners in Education.

Feng Shui is an example of how beliefs common in another country can influence local sales.

Real Estate Sales Involving a Foreign Owner

The IRS has various requirements for reporting the sale of real estate. One of particular interest is reporting the sale when a foreign owner is involved. Without surprising anyone, the IRS wants to be sure it collects what it is due and puts responsibility on the buyer.

From the IRS 1099s Instructions

"Sales or exchanges involving foreign transferors are reportable on Form 1099-S. For information on the transferee's responsibility to withhold income tax when a U.S. real property interest is acquired from a foreign person, see Pub. 515, Withholding of Tax on Nonresident Aliens and Foreign Entities."