[00:00:01] Speaker A: The Michael Hatfield remax team presents real estate and more.
[00:00:06] Speaker B: Bay Area real estate is different than all of America. And why? What's up with buyers? What's on sellers'minds? How is the market and much, much more.
[00:00:17] Speaker C: Now here's your host, Michael Hatfield.
[00:00:20] Speaker A: Welcome back to the real estate and more show. Thank you for listening in. We have a fun time planned with an update on Bay Area housing, our homes, and the March market. My partner Nancy is here to discuss some interesting and important items in the home sale process as well. We are to touch on natural hazard reports. What they mean a little bit about flood insurance and other items are integral to a home sale. Let's get this going. Welcome to the show, Nance.
[00:00:51] Speaker D: Thanks, Michael.
[00:00:53] Speaker A: Yes. Well, it's always good to see my wife.
[00:00:57] Speaker D: That's always good.
[00:00:59] Speaker A: I was just bondering. We met almost 40 years ago. Some people on the Valentine's show may have heard how we met. It was just a restaurant over in Larksburg landing. Just by happenstance. And April 1, it'll be 40 years. Can you believe that? The time has just blown right on by.
[00:01:20] Speaker D: It has. Boy, it has.
[00:01:22] Speaker A: Yeah. Do you recall everything about it or something special about that time or what?
[00:01:29] Speaker D: Yeah, it was just great. I mean, it's a great part of our history. And I sure do. I remember it vividly. And just some of the minor details, what we were wearing and what we were doing and kind of what we were saying and just thinking, and it was fun.
[00:01:48] Speaker A: Wow. It's been a long time. So now we work together, providing the best full service real estate representation possible for our clients. So go at it. It's your turn.
[00:02:01] Speaker D: Okay. So one of the things we thought about talking about was an example of how we do things. So just yesterday, we attended a client signing, and that's when a seller signs their escrow, prepared paperwork to sell his or her home. And the notary is there to document the signatures and forms and this and that. And the final closing statement that you use for tax preparation is the primary document, which still requires a wet signature.
So the notary commented at that signing that she simply does not see agents attend those signings for this very important event. And she thought that that was quite extraordinary, actually. And we thought, well, this is what we do as full service agents to the very close of a transaction. And thought that was interesting.
[00:03:02] Speaker A: She did look at us like, wow, what are you doing here? It's important. Nancy is my partner. We work together. She was a district secretary to the board of directors of a water district for 25 years. And she had like four ladies reporting to her back then. And then she said, well, you know, I could come over and help you because you look like you're about ready to melt in the real estate business. You need some help. So she came over and I'm thinking, oh, good, I've got some kind of a helper. Next thing I know, I'm working for her. You remember my mother was a broker way back when too, right?
[00:03:39] Speaker D: I do.
[00:03:40] Speaker A: Those were the days that clients would come into your office, real estate office. They'd sit down and the agent would be primarily focused on local neighborhoods. They'd have some coffee, tell the agent what they desired to find in a home. Then they would look at the listings, which would be in like a binder type book. And these listings were like, one time in history they were just put together in a twelve ring binder. And another time in history they were part of a glued together type book, like a big magazine or so. And I don't know exactly what it was, but times have changed. There's a lot of information out there from all of these big websites. Begin with a Z or an R or whatever. There's just so much out there. And I have to relate that it's still very important to have an experienced agent on your side if you're going to do a buy or sell transaction in real estate. It's so important. Even though the duties have changed.
[00:04:44] Speaker D: Absolutely. And thinking about that, the advent of the computer and the personal computer in the early 80s, wow, it's really taken a turn. But anyways, so, for example, today we could talk about the California residential purchase agreement, which is now 16 pages, and it includes so much more than ever before. For example, there are key associated documents that are contract. There's the contract seller counteroffers, there are buyer counteroffers, addendums and so forth. There's also part of those key documents are disclosures and acknowledgments and advisories which tell a prospective buyer, for instance, what they might be interested in knowing about the home that they're looking at buying. And so this week, compare with the one page going back to the contract, this week compare with the one page legal size deposit receipt of yesteryear way back year. But anyways, times have definitely changed a lot.
[00:05:54] Speaker A: Anyways, one other thing that's changed a lot, let's talk about movement of people or relocation of families. A recent study, and I mentioned it the other day, it shows the movement of residents from one home to another in the US has been slowing for some 40 years back in 1986, which was pretty close to the time that I met you. Believe it or not, 20% of Americans moved every year. They moved annually. Then 12% of that was relocations within their immediate county. The percent of homeowners who move annually is now down to 8.5%. So it's down from 20% per year to 8.5% per year of our entire population. Incredible movement from one home to another. It's declined progressively in percentage, 20% to 8.5%. Hard to believe.
[00:06:57] Speaker D: That is hard to believe. And I'm sure there's lots of factors that go into that. I mean, maybe at one point, there were a lot of military folks who were moving more frequently. I actually know family, they were not in the military. And I think she said that she and her husband moved about every one to two years. So they were quite transient. They just were fine buying and selling homes and didn't collect a lot of items. So easy to do that. But anyways, you want to talk about the housing markets now, Michael?
[00:07:29] Speaker A: Let's talk about the Bay Area housing markets in March of 2024. Well, there's not a lot to say. We've been in equilibrium. Not too many buyers have been coming out of the woodwork because of the higher interest rates in their perception. And not too many sellers of retirement age, which is our biggest percentage of home sellers, are rushing to the plate to sell their home. So we're sitting there with limited number of transactions, just like we just talked a moment or so ago.
[00:08:01] Speaker D: Right.
[00:08:02] Speaker A: So this last seven days, housing inventory increased a little bit. More homes came on the market overall, about 19% above last year for last week. That's something, but not entirely pivotal.
[00:08:17] Speaker D: Right. So we continue to have a very short inventory of homes available in the Bay Area, especially nice homes for sale. And we continue to be in a buy sell equilibrium. Right. Not too many sellers coming on the market with their homes, and not too great a number of buyers jumping in quite yet. Rates continue to hover here in the Bay Area, around approximately 6.35% to 7%. And mortgage rates definitely have an effect on our greatest percentage of buyers, the millennials. Right. Maybe the close to 40 ish year olds, affecting them, but still, we are biased to a seller's market. As you and I have talked about, home prices have not been declining either in a very significant way.
[00:09:10] Speaker A: Yeah, that's kind of strange. I noticed the chief economist for Ameriprise Financial reported just yesterday. He says, pardon me, existing home sales dropped 19% last year. But average selling prices were modestly higher. New home sellers. I'm sorry? New home sales in 2023, as opposed to existing home sales in 2023, did better at 5% higher prices nationally. So that's kind of interesting. And those numbers actually came from the federal Home Finance Agency. Decline in number of sales normally results in decline of prices. That's how economics work. But not been declining prices. Prices typically decline when demand goes down. Why? We have fewer homes available for sale. Nobody can come right in and say, I want to buy every home that's on the market because there's not a lot of homes on the market at this point in time. So price of the homes is likely to move up higher upward. Exactly. Especially if mortgage rates do happen to come down just a little bit, it will cause some kind of an issue.
[00:10:30] Speaker D: Definitely.
[00:10:32] Speaker A: Also, if that happens, momentum will improve when those interest rates decline. Now, one thing people don't think a whole lot about are the natural hazard reports. What are natural hazard reports? Can you share what that is? Nance?
[00:10:48] Speaker D: Right. So a natural hazard report is typically part of a transaction when you go to purchase a. So when we list a home for sale, for instance, we order on behalf of our clients a natural hazard report, which is a report of anywhere from, say, 40 to 60 or 70 pages in length. And the natural hazard report provides just a wealth of information about and answers to questions that sellers may not know. Right.
[00:11:22] Speaker A: Right.
[00:11:22] Speaker D: But buyers need to. So these sometimes hard to discover answers are typically provided on a Nat has. We call it a Nat has report, and the seller pays a small fee for a very large informational report. And so, for instance, if you need to know, is the home in a high fire area, which would possibly have an impact, of course, on your fire insurance rates.
Are there any hazardous waste sites available nearby that you might be interested to know? Is the house subject to airport noise? Can you farm there? If you want. Could you have your pot belly pig there?
Are there any old fuel tanks buried nearby? Does the home lie in a dam?
How do you say that?
[00:12:15] Speaker A: Dam. Inundation.
[00:12:16] Speaker D: Thank you. Inundation area or near an ordinance storage facility. That's ammunition storage sites. Is it in a flood zone? I mean, there's so much information that's contained in these natural hazard reports that they're very valuable. And many of these answers, sellers just don't even. They don't know and they can't provide them on their own. So it's a very valuable tool in a home sell.
[00:12:44] Speaker A: Yes. So natural hazard disclosure report sometimes could be as much as 65, 70 pages. What it does is it maps out any potential areas that may affect the home that a seller would be unlikely to know. Now, interestingly, per California law, the seller has to provide seller documents that outline these issues or potential issues, and they have to disclose it to a buyer. Well, the seller doesn't know. So what does the seller do? The seller goes and hires a company to provide this report, and they take the responsibility for the information that they provide. Now, you mentioned in there that they let you know where the areas of flooding could be. Dam inundation is one term. Is it in a flood zone? What is a flood zone? Well, a flood zone is an area that FEMA actually went and assessed all of the homes in the United States a number of years ago and says, okay, if you're at XYZ on Maple street, or four, five, six Maple street, your home is in a flood zone or it's not in a flood zone, and it actually puts it down to how much of a potential flooding it would be. Would it be relative to the 100 year flood or would it be a 500 year flood, and then at some point it requires, in order to borrow money on that property or put a mortgage on it, that you would have to have flood insurance. Flooding insurance can be very expensive, or it could be not a big deal. So it depends on where the home is located. That information is normally derived from the natural hazard disclosure report.
[00:14:38] Speaker D: Right.
[00:14:39] Speaker A: Interestingly, we sold a home, if you remember, up in the Russian river area, and that area has a tremendous amount of susceptibility to flooding. And this home, it was recently built and it was up really high. The living space was placed. It had to be at least, I would say, 30ft in the air. It was above the 500. The living space was placed and built 500ft above correction, 30ft above the 500 year flood mark, thus avoiding the considerable amount necessary to buy flood insurance in that particular area. I don't know if you remember that home.
[00:15:25] Speaker D: I do, and it's a real consideration. I mean, I recall an engineer who I worked with years ago, and his best advice was, when you go to look for a home, go look for a home during the worst rainstorm you can find and see what it looks like around.
[00:15:43] Speaker A: Yeah, well, russian river has a tendency to, when there's a lot of rain and so forth, it tends to overflow and people have to swim and pretty bad up there when that happens. But fortunately, under this case, we've been able to work through the deals that we've had and our homeowners have been able to sell and the buyers have been able to buy because we've been able to find flood insurance. Whereas if you cannot get flood insurance, a lender is unlikely to loan on that particular right.
Well, now for a few items in a buy sell transaction that are worth mentioning. Water conserving fixtures, Nance, let's talk about those. We see it everywhere as part of the seller disclosures to buyers, do we not?
[00:16:33] Speaker D: We do.
[00:16:35] Speaker A: Just give us a little background on that, please.
[00:16:36] Speaker D: All right. A little background on that. So as of January 1, 2017. So that's been a while. The state of California Civil code mandated that all single family residential real property built before January 1, 994 must have water conserving or low plumbing fixtures installed throughout the property as a condition of building permits and applied for after January 1, 2014. So the state code states in part that on or before January 1, 2017, non compliant plumbing fixtures in any single family residential properties shall be replaced by the property owner with water conserving plumbing fixtures.
[00:17:32] Speaker A: Wow.
[00:17:33] Speaker D: That's a mouthful.
[00:17:34] Speaker A: Come on now. Come on. Come on.
[00:17:35] Speaker D: The code also states that a seller or transfer of a single family real property shall disclose in writing to the prospective purchaser the requirements of the subdivision and whether the real property includes any non compliant plumbing fixtures. And often, people really don't know all these answers. I mean, in reality. But they do.
[00:17:58] Speaker A: I had someone ask me, well, what is a water conserving fixture? Well for a toilet. If the toilet flows more than 1.6 gallons per flush, a 1.28 gallon per flush toilet will be required. If a shower head exceeds 2.5 gallons per minute, a 2.0 gallon per minute shower head will be required. If a lavatory faucet flows more than 2.2 gallons per minute, a 1.2 gallon per minute faucet will be required. If a kitchen sink faucet flows more than 2.2 gallons per minute, a 1.8 gallon per minute faucet will be required. We do not measure the water flow to determine this during a house transaction. We're going to take a short break.
[00:18:51] Speaker C: We'll be right back.
[00:18:55] Speaker E: Michael, what traits should we look for in selecting an agent?
[00:18:59] Speaker F: Look for a dealmaker with a positive attitude who will work tirelessly for you. An agent who is adept in multiple offer situations, drafting contracts, marketing and advertising. A client's home is familiar with multiple cultures experienced in mortgage financing, inspections and escrow is a huge asset to his client.
[00:19:19] Speaker E: What can you do as a plus for clients?
[00:19:21] Speaker F: Your agent is your eyes and your ears, one who works behind the scenes on your behalf, a great attitude, working well with others and keeping clients priorities. Number one is a given for us.
[00:19:32] Speaker E: Call 925-32-2775 now to schedule an appointment or complimentary home analysis for excellence in real estate, call the Michael Hatfield remax team at 925-322-7775 or go to michaelhatfieldhomes.com.
[00:19:53] Speaker G: With low housing inventory and constantly changing mortgage rates, buying or selling home is challenging. Choose an experienced team. Who cares? Here's Michael Hatfield in a quiet cul.
[00:20:03] Speaker C: De sac near the quaint town of Clayton. Revel in the wonderfully tall ceilings and open and spacious elegance of this immaculate 3320 1 bedroom, three bath masterpiece. 22 Wordsworth Court in Concord boasts outdoor living at its best, with sparkling pool and newly built gazebo. Plenty of room for an RV or a possible adu. Highly ranked schools in a warm, sensitive neighborhood here. Don't miss this dream home.
[00:20:33] Speaker G: Get help with buying or selling a home by calling the Michael Hatfield remax team at 925-32-2775 that's 925-32-2775 or go to michaelhatfieldhomes.com. That's michaelhatfieldhomes.com.
[00:20:50] Speaker A: Now, welcome back to our show.
Nor are we required to. It is a seller disclosure to buyer. Now what does disclosure mean, Nance?
[00:21:01] Speaker D: Disclosure means that you, for instance, as the seller, are telling a prospective buyer or buyer something that you know about your home, for instance.
[00:21:11] Speaker A: Are these important nowadays?
[00:21:13] Speaker D: Absolutely important. Very important.
[00:21:16] Speaker A: Yeah, I was talking with the owner of Remax Accord and he was saying that roughly 70% of conflict in a contract is because it's contended or is, it's a truth truism that the seller did not disclose something to the buyer. So as a seller, we say to our sellers, put down anything to the questions on the two main documents, which.
[00:21:46] Speaker D: Are the real estate transfer disclosure statement and the seller property questionnaire.
[00:21:52] Speaker A: Yeah, it asks some relatively poignant questions. And as a seller, you want to make sure that you've put down everything that you could know about those subjects so that the buyer is not broadsided. You don't want to hold anything back. You don't want to be secretive. You want to get it out there and say, well, this is what we know about it. It's really important that you do that.
[00:22:16] Speaker D: Right. It prompts thinking on the seller's part. And those are good forms.
[00:22:21] Speaker A: Now, what are acknowledgments?
[00:22:23] Speaker D: Acknowledgments that you are receiving information about a certain topic and you are just receiving it. You're acknowledging that you're receiving that information.
[00:22:33] Speaker A: Yeah. And what's the most important, in my view, type of document in a real estate transaction?
[00:22:38] Speaker D: The agreement or contract?
[00:22:40] Speaker A: The contract. If you're doing a listing agreement, then that's a contract. That's pretty important.
Then if you're representing buyers nowadays, you need to have a buyer, what we call them buyer broker agreement, but they're a buyer representation agreement. And then if you have an offer on your property or you make an offer, you're going to do that on that 16 page contract called the residential purchase agreement. Purchase agreement. And all of these documents have associated disclosures, acknowledgments and advisories in order to have them all hold together, so to speak.
[00:23:18] Speaker D: Got it.
[00:23:19] Speaker A: Right. Carbon monoxide and smoke detectors. Do you know what's required on those?
[00:23:25] Speaker D: Well, let's see. If you have a two story home, for instance, or three, you would need a smoke detector and carbon monoxide detector on every level. And then smoke detectors in every room.
[00:23:38] Speaker A: I believe it is every bedroom, right? For sure. And that's pretty much required by law. There's one other factor in there that's important that I always think about. And what happens if you don't have those in the property and appraiser comes out or a home inspector comes out? A lot of times they say, well, I'm not going to complete your inspection. I'm going to have to come back once you put those in there because it's really important and there's some kind of a contingent liability for the inspection company or the appraisal company if they continue on and they don't actually do.
[00:24:13] Speaker D: That, it makes so much sense to have them. Why would you not want to have them in your home?
[00:24:20] Speaker A: What is water heater strapping? What is that heater strapping?
[00:24:24] Speaker D: So because we're in California and we do have earthquakes, it's important to have your water heater properly restrained. And so isn't it, Michael, there's two or three straps, right? Upper and lower part.
[00:24:40] Speaker A: It depends on the actual size of the water heater. 40 gallon water heater normally is just two straps. 50 or more, I think it is. No, I'm not sure. Don't hold me onto that, listeners. But I think it's 50 gallons or more. You need three straps, but it's a size thing. And what are the straps for?
[00:24:58] Speaker D: So that in the event of a seismic event that the water heater stays secured, doesn'tip over.
[00:25:06] Speaker A: Wow. Well, we're going to have to get into termite reports and talk about those things here very soon, but we're pretty much out of time. And I just wanted to say this is almost an anniversary type talk together here on the air, and I'm so grateful that I have my partner. She's pretty amazing and what I'm so short and deficit in and attributes she makes up for them. And people just love her more than me. So thanks for being on the show again, Nance.
[00:25:36] Speaker D: Thank you, Michael.
[00:25:37] Speaker A: Well, I hope you've enjoyed our show today, homes and the March market. A special thank you to my partner, Nancy. Thank you again for being on the show. You've been listening to the real estate and more show. I'm your host, Michael Hatfield. Important topics like Bay Area real estate and interesting people listen to archive real estate and more
[email protected]. Slash Radio that's michaelhatfieldhomes.com Slash Radio and also the real estate and more show is available podcast on demand, on Spotify, Amazon, iHeart, Pandora, tune in and most major podcast platforms as well. I hope you will tune in next week and in the meantime, have a blessed week.
[00:26:24] Speaker B: Views and opinions expressed are based on current economic and market conditions and are subject to change. Information on the show provided for illustrator purposes only and does not constitute professional or legal advice. Information from sources deemed reliable but accuracy and completeness not guaranteed. Michael Hatfield and the Michael Hatfield remax team have no liability for information discussed on the show. Consult with qualified professionals prior to taking action.
