Pete Carey from the San Jose Mercury News recently wrote an article entitled Tech-rich Vacation Home Buyers Head to Tahoe. Carey says that because of the booming tech industry in the Bay Area and Silicon Valley, vacation home buyers are expected to purchase real estate in Lake Tahoe. See entire article below…

Tech Rich Vacation Home Buyers Head to Tahoe

Market Rebounds as buyers from Bay Area move in

By Pete Carey
San Jose Mercury News

Lake Tahoe area real estate agents, hungry for sales in the aftermath of the housing bubble, are counting on the Bay Area’s booming tech industry to help generate the next crop of million-dollar vacation home buyers.

The market for vacation homes costing more than $1 million, though down over the year, turned in a strong third-quarter performance, according to Coldwell Banker. That was partly due to buyers from Silicon Valley, vacation home developers and real estate agents said.

“People are starting to feel a little bit better about things. Silicon Valley is kind of spearheading that revival. We’re seeing those folks make their way into the Tahoe market,” said Jim Telling of East-West Partners, the developer of Home Run at Northstar.

Some buyers from the tech industry have snapped up vacation homes recently that run from $1 million to $4 million or more.

For example, more than 20 parcels at Martis Camp — a 2,100-acre custom lot development between Truckee and Northstar — have been scooped up by employees of tech companies such as Google (GOOG), Facebook, VMware and Apple (AAPL), according to the development’s spokesman.

One Apple employee bought at Home Run, a small mountainside ski-in, ski-out village of townhomes, where luxury real estate sells for $1.75 million to $2.2 million.

Another Apple employee sold some stock and purchased a place at Incline Village recently, reportedly for $3 million.

And a small Scotts Valley company, VirnetX, is moving to Tahoe after its CEO bought a $6 million house on the Nevada side.

Last, but not least, Oracle (ORCL) CEO Larry Ellison is putting the finishing touches on a lakefront compound at Incline Village. Ellison reportedly spent $58 million to assemble an 8-acre spread. The site has several buildings, a pond, a waterfall, tennis courts and a sandy beach with two piers.

“I think the world’s starting to right itself again,” Telling said. His development’s first eight homes are under construction on the mountain near the 170-room Ritz-Carlton Hotel, which opened in 2009.

The Bay Area has always supplied a big portion of Tahoe vacation home buyers.

“It’s good for a long weekend,” said Andy Bechtolsheim, who is one of Ellison’s neighbors at Incline Village. Bechtolsheim, an angel investor and co-founder and chairman of Arista Networks, said he’s been going to Tahoe for 20 years.

“It’s good for kids. It’s not as upscale as Aspen, but I would say it hasn’t lost its traditional charm. It’s gotten a little bit more crowded during the busy season, but I love the offseason there. I was there a few weeks ago in October. There was nobody there. The leaves were changing. It felt like fall going into winter.”

But until recently, the economic downturn had discouraged many buyers, while falling prices kept many sellers off the market.

Now, according to Ernst & Young, 25 Bay Area tech companies are preparing initial public offerings, providing new hope to local real estate agents.

“Silicon Valley IPOs = Cash for Tahoe Home Buyers” was the headline on an October blog post by Lexi Cerretti of Intero Real Estate Services at Incline Village.

“With social gaming leader Zynga and social giant Facebook likely to go public in 2012,” she wrote in her blog, “we will see a new breed of millionaires emerging in the Bay Area home buying market. … An influx of cash into the hands of new buyers could give sellers the opportunity they’ve been waiting for this winter into 2012.”

Cerretti said she’s visited Intero’s Silicon Valley offices in anticipation of a future Tahoe boomlet. “Many of the showings on my high-end properties are buyers who have come up from the Bay Area, specifically from Silicon Valley. I have had two great buyer referrals in the past week from our Intero office in Los Altos,” she said in an email.

Adele Lucas of Chase International said she closed a deal last week for just over $3 million. “Right now, I am extremely busy with lakefront sales,” she said. “We’re seeing those affluent buyers coming into the high-end market because they recognize these prices are artificially low and are going to be pumping up in the next few years as the market and economy strengthen.”

Craig Zager with Coldwell Banker Select on the Nevada side of Tahoe said he has had several lakefront sales this year to Bay Area residents, including the CEO of VirnetX, the 12-person Scotts Valley firm. VirnetX has sued Microsoft and others for infringement of patents it acquired from SAIC, a major defense contractor. Microsoft settled for $200 million last year.

“Most of the communities around the bay have not seen distressed markets like the rest of the state or country,” Zager said. Buyers “come in with a different attitude, just looking for the right property, and they write a check.”

I recently found this article entitled Remodeling? Don’t Forget the Permit. This is a good reminder of why it’s important to get your remodel permitted. The article states “Home owners who fail to get a building permit for a remodeling project can jeopardize a sale.” In this market, sellers do not need to do anything to jeopardize the sale of their home! Click on the link to read entire article.

When home owners take on a remodeling project, they’re often far more focused on choosing glistening fixtures for a new bathroom or debating the type of granite to use on a kitchen countertop than, say, navigating the intricacies of the building permit process. That could be a huge mistake, however, and it may not even come to light until the house is put up for sale. Ignoring local approval requirements not only poses safety and legal problems but also can potentially derail an otherwise smooth sale.

Home owners using licensed contractors for remodeling work typically don’t have to get involved with permitting. Most licensed contractors will handle the cumbersome process for them—filling out the paperwork with the municipality, collecting fees, and being present for the required inspections, says Michael Hydeck, president of the National Association of the Remodeling Industry. But when home owners tackle do-it-yourself projects or use unlicensed contractors, they risk problems later.

The permit process varies widely from city to city and state to state). But the purpose of the document is the same everywhere: It offers ­assurance by a municipal building department that the work being done meets all safety codes.

Ask Home Sellers Before You List

Home owners may be asked about permits in the process of selling a home. At closing, they may have to disclose any remodeling work they did and verify permits. A home inspector evaluating a property for a buyer may want to know whether a permit was obtained. Furthermore, the buyer’s appraiser may want to see permit records to check the legality of any home renovations.

“If no permits are found and it’s obvious the home has been renovated, the bank will likely refuse to make the loan,” according to the American Bar Association’s book Legal Guide to Home Renovation (Random House Reference, 2006). If the permitless work isn’t discovered until after closing, the home’s value could even be subject to a lawsuit, such as in cases when an addition added extra square footage to the home’s value but the construction wasn’t done legally with a permit.

That’s why contractors and legal experts say real estate practitioners are well advised to ask sellers before they take on a listing for a renovated home: “Did you get a permit for that?”

Remodeling contractor John Price in Merced, Calif., has been called in to help home owners after permit problems have been uncovered. He once worked with a home owner who installed siding by himself, but added it too far down along the wall of the house, so it rubbed up against dirt and picked up moisture. Eventually the poor installation led to mold growing in the drywall throughout the inside of the house.

Some home owners, however, are tempted to sidestep the permit process not wanting to pay the fees (municipalities generally charge a minimum issuing fee—such as $25—as well as an additional fee—sometimes 1 percent—of total construction costs), or they might not want to risk delaying a project or a sale by waiting for city inspections (obtaining permits can take anywhere from a day to six weeks or more).

“People have strong incentives to cheat, and some of that lays squarely on the feet of policymakers who have sometimes created a system that is time-consuming and frustrating,” Price says.

But caught without a permit during resale, home owners may face big consequences. They may have to pay fines (possibly up to quadruple the original permit cost) or may have to tear the project down and redo it.

Virtually No Job Is Too Small

Home owners making any changes to the structures of a home will likely need a permit—and you may need more than one, Price says.

While kitchen and bathroom remodels and housing additions are obvious permit candidates, people may not realize they might also need one for such projects as installing a window, adding a new light switch, or replacing a shower. “There are not too many jobs you don’t need a permit for,” Hydeck adds. “It’s better to be safe than sorry.”

 

“I want four bedrooms upstairs, three bathrooms, a beautiful lake view, chef’s kitchen with a great room, great central location that’s ‘walk-to’ everything and close to the best ski areas, and ‘turn-key’ condition,” my client emphatically stated. “Oh, and I need it for only . . .”  (Hmmm . . . )

As a friend of mine jokes, “Find me that house and I’ll purchase it myself!

The reality is that I can probably find you the bedroom/bathroom count you seek, OR the coveted location, OR the immaculate condition, but it’s next to impossible to find everything you want, given a limited budget.  And while we’re being frank (why not; in for a penny, in for a pound) it’s nearly impossible to hit ALL of the bullet points on any buyer’s “wish list” - even when price isn’t an issue!

Really?

Really.  In my experience, there is always a bit of compromise, regardless of how much a buyer can – or is willing – to spend.  BTW, this isn’t just true of buyers; it’s true for sellers as well, who expect a result that is literally, “unattainable.”

I liken it to hunting for the “endangered species,” but a much better term for the impossible outcome is probably “looking

Unicorn

for the unicorn!”  (That’s brilliant.)

I don’t mean to dampen your dreams. In fact, I want to encourage them; nothing gives a REALTOR more pleasure than matching buyers with the right homes and given the unprecedented low interest rates now available, within a softer housing market - making purchasing truly more affordable than it has been in fifty years - now is an exceptional time to buy (if you qualify – but that’s another column)!

But I have also spent untold hours too numerous to count with clients seeking the “mythical home” that truly doesn’t exist.  No matter how many properties I show them, they are unwilling – or incapable – of writing.  For them, it’s all about the shortcomings – never the opportunities. In short, they’re looking for the unicorn.

Here’s the skinny, “real” Buyers write and what’s more, they often write on several properties before successfully obtaining “the one.” However, these near misses are never wasted.  With each new purchase offer, Buyers sharpen their skills, adapt to the demands of the marketplace, and develop a finely honed sense of “value” that makes it possible to ultimately craft a winning offer.  (Oh, I get it!”)

With respect to “real” Sellers, they absorb the results of  the marketplace, take into account the comparable sales, adjust their asking price quickly when the market speaks, listen to their Realtor’s advice, and understand the BIG picture. In other words, they don’t test the market; they come ready to sell.

In both cases, it’s about being focused, teachable, goal-oriented and open to the possibilities. Otherwise, you may as well spend your time looking for a unicorn.

Is Bank of America really cancelling short sales?

We just received this news from the BPE Law Group. This could be devastating for short sales! We will keep you updated on any more news concerning this!

What is SB 458?

SB 458 extends the protections of SB 931 (2010), to ensure that any lender that agrees to a short sale must accept the agreed upon short sale payment as payment in full of the outstanding balance of all loans.

Under previous law (SB 931 of 2010), a first mortgage holder could accept an agreed-upon short sale payment as full payment for the outstanding balance of the loan, but unfortunately, the rule did not apply to junior lien holders. SB 458 extends the protections of SB 931 to junior liens.

From BPE Law Group

In the wake of passage of SB458, lenders are struggling with how to respond.  We’ve had 2 separate clients today tell us that BofA has stated they are cancelling all loan settlement negotiations.  Since these concerned 2nd loan liability, this may mean that BofA will be killing all short sales in which they are involved as a junior lender.  What is unclear is whether they are extending this to ALL short sale negotiations regardless of whether they are in first or junior position.

Needless to say, this will be devastating to short sales since BofA is involved in so many. It will be worse if other lenders follow their lead.  Perhaps this is a strategic move to create a backlash in the market to force the legislature to amend or even kill SB458.