Schubb's Perspective

Why you can't buy a house

2010-02-02T20:34:00.000-08:00

The Obama Administration believes that the best way to solve the housing crisis is to stabilize and enhance real estate values. This has been artificially accomplished by pumping tax dollars into mortgage backed securities to keep interest rates low, by providing tax dollars for tax credits, by providing high limits on FHA and GSE loans (providing today's sub prime), and by doing whatever is necessary to delay foreclosures.
These actions have created a shortage of inventory and an increased (but artificial) demand. Therefore, prices have remained higher than they really are.
But, as a Realtor, a larger frustration is that there are a LOT of frustrated people who are UNABLE to purchase a home because the shortage of homes has also created a bidding war. Any home that is priced near reality receives multiple offers and only one of those bidders buys the house. Many are desperately trying to buy in an economy/market where they shouldn't be turned away.
If these folks COULD buy, there would be more income for Realtors, escrow companies, title insurance companies, homeowner insurance companies, furniture stores, appliance stores, landscape contractors, and many other business that benefit from home sales.
How much could the economy be stimulated if we only sell homes to the people who want to buy them?

Do we need a local real estate association?

2010-01-25T11:22:00.000-08:00

Once again my thoughts are drawn to the fact that I am REQUIRED to belong to Contra Costa Association of Realtors (CCAR) if I am to be considered a legitimate member of the local real estate community. If one wants to use the title "Realtor", one must belong to the National Association of Realtors which requires membership in a State Association (California Association of Realtors - CAR) which requires membership in any local association.
I've belonged to CCAR since 1970 when it was known as Contra Costa Board of Realtors and when there seemed to be a need. CCBR owned the local MLS, provided networking opportunities (there was no Facebook, Twitter), and provided a resource for forms, signs, and other necessary items.
Lately, CCAR purchased an office building in downtown Walnut Creek to house it's offices. I don't know how much it costs because membership was not given an opportunity to approve the expenditure or even decide if we WANTED to buy a building.
Is a function of CCAR to invest its members' funds in real estate? If the Association is making so much money that it can afford to purchase a very expensive piece of real estate then maybe the dues are higher than need be?
I don't really know how much is needed for annual dues because I have never seen a financial statement, and operating budget, or any other information that indicates the financial health of the Association. Should members be allowed to review and comment on how their dues are being spent?
I'm sure that the members who are actively involved in CCAR find it worthwhile and rewarding. And please don't get me wrong: I appreciate their interest, commitment, time, and money spent on Association matters.
But, do we need an expensive monument to house salaried employees to do who knows what? Are these folks providing services that we can get somewhere else without paying full time for something that we might use some of the time?
It's time to make membership in local associations voluntary, not mandatory. CAR, with some regional offices is all that is needed in today's technological environment. Multiple Listing Services should also be statewide - I shouldn't have to belong to three MLS's to conduct my business.
Today's real estate business is radically different than what I saw 40 years ago yet the political structure remains with little change. Real Estate companies are merging and closing offices to become more efficient - partially because they need to, partially because technology allows it, and partially because it just makes sense. Title and escrow companies, lenders, and even local real estate associations are doing the same for the same reasons.
CCAR must become more transparent and more accountable to it's members if it is going to survive.

Lake County, CA

2010-01-04T17:34:00.000-08:00

We now have a presence in Lake County and expect to build the same volume of business that we started just over one year ago in San Joaquin County. Our newest office is in Nice, CA (which is nice!) under the watchful eye of industry veteran Al Duncan.
Happy New Year and best wishes for 2010!

Strategic Default

2009-12-18T10:42:00.000-08:00

Daily Real Estate News | December 18, 2009 | Share More Home Owners Walk Away
A growing number of home owners in Arizona, California, Florida, and Nevada—where prices have fallen the most—are walking away from their properties.

They are leaving the deal behind not because they can’t pay but because they don’t want to. A study by researchers at Northwestern University and the University of Chicago concludes that as many as 25 percent of defaults are driven by strategy, not necessity.

If many other people follow suit, “It’s going to be really difficult to prevent a cascade effect," says Paola Sapienza, a professor of finance at Northwestern.

Brent White, an associate law professor at the University of Arizona, points to actions by banks themselves to avoid staying in bad business deals as an example of why homeowners should make a decision "unclouded by unnecessary guilt or shame."

For instance, on Thursday, financial services firm Morgan Stanley announced that it is turning five San Francisco office buildings back over to its lender two years after it purchased them when the market was at its priciest. The buildings are estimated to be worth about half of what Morgan Stanley paid.

“This isn’t a default or foreclosure situation,” spokeswoman Alyson Barnes told Bloomberg News. “We are going to give them the properties to get out of the loan obligation.”

Morgan Stanley is apparently current on the loan, so this is what is known as a “strategic default.”

Some might ask: If strategic defaults are OK for banks, why aren’t they OK for ordinary homeowners?

Source: The Wall Street Journal, James R. Hagerty and Nick Timiraos (12/17/2009) and Bloomberg, Emily Friedlander (12/17/2009)

What about receivership?

2009-11-12T09:39:00.000-08:00

It has become apparent that banks are not foreclosing on defaulting loans and that they are not releasing many of the homes to the market that are foreclosed?
What becomes of these assets? Especially the high dollar assets such as commercial and multi residential properties?
Perhaps it's time to explore another business model?

Property Management Appointment

2009-09-02T16:57:00.001-07:00

We're now providing property management services for Fannie Mae! The new rental policy creates a need for Fannie Mae property managers and our duties also include working with difficult rent control and other governmental issues.
It's a difficult area but our experience gives us the ability to get the job done!

Lack of Action causes more loss

2009-08-19T07:08:00.000-07:00

The governments and the banks have decided that the best course of action is to NOT foreclose and to try to keep people in their homes. Sounds good on first thought but there are so many repercussions from this avenue of inaction.
Consider that most homeowners who are not making mortgage payments are most likely not making property tax payments, homeowner insurance payments, HOA assesments, or maintenance payments. These reduction in income streams are affecting government programs, bank losses, and property values.
Banks, when making a new loan to a buyer, require that HOA's meet certain financial requirements and/or have a certain level of owner occupancy. The defaulting homeowners are making it more and more difficult to sell homes because lenders won't make new loans. When you lose those buyers, the only buyers that remain are the cash buyers - and they pay a lot less - thereby driving prices down further.
The number of default filings continue to rise dramatically and the number of homes foreclosed is declining. That may mean that the income stream to all of the above will continue to fall which will eventually lead to many more foreclosures.

Seller's Market?

2008-12-02T13:59:00.000-08:00

The media continues to inform us of the sad state of affairs in the real estate business. Granted, it's not 2003 but it's also not doom and gloom for those who wish to work.

According to information published by Trendgraphix (http://www.trendgraphix.com/) , inventory is slightly down and sales are up, up, up.

There were 6607 listings in Contra Costa County in October, 2007 and there were 5072 listings in October 2008.

If one couples that with increased sales from 411 to 1079 it is easy to see why inventory is becoming scarce.

Inventory in Contra Costa County has declined from 16.1 months in October, 2007 to 4.7 months in October, 2008.

Historically, an inventory of 3 months or less has been considered a seller's market!

Average sales prices have fallen from $638,000 to $385,000 (October to October) which has caused a feeding frenzy created from pent up demand. Suddenly, folks are realizing that they can afford to buy a home and are wanting to do so before it becomes too late. Couple this demand with falling interest rates and increased conforming/FHA loan limits and we're seeing multiple offers on many of our lisitngs!

Although most of our listings are sold to homeowners who wish to occupy them, investors are beginning to notice that they can buy a nice house in a nice neighborhood and it will cash flow! So, investors are beginning to enter the market place, too.

Expect the level of foreclosures to increase in 2009. Sales should continue to be brisk unless unemployment becomes a limiting factor.

Prices will continue to fall until the monthly payment on an average loan becomes about 30% of the average income in the market place.

Where's the good news?

2008-07-08T09:41:00.000-07:00

The media continues to tell us that the sky is falling as foreclosure numbers mount, abandoned homes proliferate the landscapes of every neighborhood, loans become impossible to obtain, and banks fail.

Those of us involved in managing and disposing of bank owned (REO) assets see a different picture.

Well priced homes are still receiving multiple offers.
Almost all of the buyers are homeowners looking to buy a home to live in and raise their families.
Almost all of the homes are being sold by real estate agents who are finding the REO listings on multiple listing service - regular real estate business.
Lower prices have made homes affordable for countless of home buyers previously shut out of the market.
Interest rates remain low.
The supply of properties is decreasing as more home buyers enter the market.

Additionally, real estate professionals who specialize in this segment of the market are complaining - not about how bad things are, but that they can't keep up with the volume. As the numbers increase, we are adding agents to our teams, adding administrative staff, adding agents to the office who are also selling homes to retail buyers, and opening new offices to handle the business.

So, when I attend conferences and see the success, feel the vibe, and listen to how good things are, I wonder why we see no press.

Director of J. Rockcliff Realtors REO Division

2007-12-11T08:30:00.001-08:00

My new position as Director of the REO Division allows me to create the premier REO machine in the country. Since J. Rockcliff Realtors is a member of the Fidelity National Financial (FNF) family I am fortunate to have the resources to expand the capability to service unlimited assets.

This is the third cycle of REO that I have experienced. The 1980's were certainly groundbreaking times for REO as it had never really been seen before. We all invented programs and policies on the fly and we learned from our mistakes. The 1990's were an extension of the 1980's as we all tried to become more efficient. This wave of foreclosures was unexpected by most, the marketplace is much different than in the past two cycles, and technology has dramatically changed the process.

In this cycle, lenders are primarily outsourcing their REO business to asset disposition firms instead of committing resources to solve the problem of managing and disposing of the assets. These companies are embracing technology to manage the process. Gone are the days of paper, fax machines, film, and overnight express (well, almost). Efficiency is the name of the game. Consequently, the third party companies are seeking competent brokers who can handle large volumes of properties.

In the past, it was unusual for an agent to have more than 50 properties. In the past year we have closed almost 100 properties and we currently have more than 100 properties in inventory. This volume requires resources – people, salaries, capital, and other infrastructure. I outgrew my capabilities and needed a solution if I was going to continue to grow.

Now I have the capital to fund the maintenance of unlimited assets, I have the capital to pay salaries for needed staff, and I have the capital and support to solicit new accounts. We expect to, at least, double our volume in 2008 and expand our marketing territory into Southern Alameda County as well as Solano County.

The Market Is What You Make It!

2007-11-21T15:39:00.000-08:00

Read all about it.....the real estate market is very bad, foreclosures are destroying the likes of the largest lender in the country and the subprime loan disaster is making Wall Street nervous.

Is it really that bad or is the press causing an unfounded panic?

Granted, I market bank owned (foreclosed) properties for lenders so people think that I'm in a different market. They think that these homes are underpriced bargins. But the banks don't give away money - they want as high a price as any other seller - and most of the buyers for these homes are homeowners, not investors.

These buyers purchase homes using agents who belong to multiple listing service. They submit offers to me using the same California Association of Realtor forms that we've used in "hot" markets. They use the same lenders that they used in the "hot" market. Well priced homes are still attracting multiple offers and, usually, selling for more than list price. The process is almost identical to what it was before.

Bottom line is that we're selling more homes than we ever have and are challanged every day to keep up with the business. What makes us different? We believe that there IS a real estate market, that there ARE buyers who want to own property, and we come to work every day and put in the work - with the right attitude - to get the job done.

Don't let the press tell you otherwise - they don't sell homes.

1916 Piper Ridge Court, Walnut Creek, CA

2007-10-23T15:52:00.000-07:00

Fabulous Summit Ridge remodel consisting of 4 bedrooms, 2.5 bathrooms, formal dining room, family room, remodeled kitchen & master bathroom, 2 story ceilings with skylights, and double attached garage.

Granite slab counters, custom cabinets, new appliances, new hardwood floors. Lafayette schools!

More details:
http://www.idxre.com/idx/detail.cfm?cid=4&bid=2&pid=40292923&ff=1

Reduced to $779,900

Foreclosed Homes for Sale!

2007-10-23T15:45:00.000-07:00

We're busy selling homes!
While most Realtors are complaining that they can't find a client who wants to buy or sell, The Schubb Group is complaining that we can't keep up with work load. The team now consists of 12 members, we have 115 listings, 20 active escrows, and more than 40 closed escrows to date!
There is nothing wrong with the real estate market, only with seller pricing. Well priced homes are selling, many with multiple offers.
Banks are acquiring more homes at a faster rate so we're acquiring more listings at a faster rate. And we're selling them at a faster rate.

Don't always believe the headlines you read

2006-11-16T16:54:00.000-08:00

With thanks from Tom Tognoli, COO Intero Real Estate:

Here is a little proof that you can’t always believe the headlines. Imagine if you purchased a home each of these years what your net worth would look like today.

“A home is where the bad investment is.”
– San Francisco Examiner. 1996

“Financial planners agree that houses will continue to be a poor investment.”
– Kiplinger’s Personal Financial Magazine, 1993

“We’re starting to go back to the time when you bought a home not for it’s potential money-making abilities, but rather as a nesting spot.”
– Los Angeles Times, 1993 (Note: 1993 was the absolute low-point for real estate values in Los Angeles. Priced have sky-rocketed since.)

“Most economists agree...a home will become little more than a roof and a tax deduction, certainly mot the lucrative investment it was....”
– Money Magazine, 1986

“If you are looking to buy, be careful. Rising home values are not a sure thing anymore.”
– Miami Herald, 1985

“The era of easy profits in real estate may be drawing to a close.” (Average price at the time: $28,000)
– Money Magazine, 1981

“The goal of owning a home seems to be getting beyond the reach of more and more Americans.” (Average price at the time: $28,000)
– Business Week, 1969

“The prices of houses seem to have reached a plateau, and there is reasonable expectancy that prices will decline.”
– Time Magazine, 1947

Foreclosure Trends

2006-10-27T11:46:00.000-07:00

Meeting with asset management firms and brokers in Denver this week was most interesting and informative. A national trend is developing that is creating an increased inventory of foreclosed homes. The days of double digit appreciation are gone, buyers are difficult to find, and payments on option ARM loans are beginning to adjust - upward.
For the first time in several years I am hearing from lenders and asset management firms to liquidate foreclosed assets. In preparing market analysis reports I'm seeing sales that are REO (real estate owned or foreclosed homes) or short sales (sales where the lender agreed to take less the full amount owed).
I think that we are at the beginning of the cycle. In other states (Ohio, Pennsylvania, New Jersey) there are already large levels of REO inventory. Most of these states have unemployment issues which compound the problem. Here, we will see default in areas that have been overbuilt and sold with 100% financing.
Builders have built huge subdivisions in the past several years with the help of cheap financing and made enormous profits due to a fast moving real estate market. Buyers were able to buy these homes and qualifying under loan programs that allowed payments that do not pay the interest. As a result, these buyers today usually owe more than what they originally borrowed.
Prices are declining, loan balances are increasing, equity has been erased for many homeowners. In the event of a divorce, a death, job loss, or other catastrophic event, the homeowner will not be able to make the higher loan payments. In the past, the house was put on the market, sold quickly, the loan repaid - no harm, no foul.
Today, this situation will leave the homeowner will potentially no option. If the house can't be sold or refinanced and the homeowner can't make the payment, the lender will foreclose.
Look for defaults in areas such as Brentwood, Antioch, San Ramon, Pleasanton - areas where homeowners bought new homes that they couldn't afford.

Friends of Summit Ridge Newsletter

2006-10-07T17:21:00.000-07:00

The Friends of Summit Ridge have posted an October newsletter and David Schubb has posted an Editorial.

Mt. Diablo Challange

2006-10-04T09:23:00.000-07:00

Sunday was the 25th annual Mount Diablo Challenge, a 10.8 mile timed bike ride, starting at Athenian School in Danville and climbing up Southgate Road - 3,249 feet to the summit of Mount Diablo. Approximately 1,000 cycling enthusiasts competed with all proceeds benefiting Save Mount Diablo’s land conservation efforts.
The winning time was posted by Robert Anderson of Mill Valley (47:28.3) who averaged 13.7 MPH. I was a bit slower, completing the climb in 1:24:16.7 (7.69 MPH). It was, however, the fastest time that I've completed the event!
The weather was not the best as the fog rolled in as we waited at the top for clearance to descend - they won't let anyone down until everyone is up. It was cold! A great time was held by all and funds were raised for a worthy cause. I've grown to greatly appreciate the beauty of Mt. Diablo since I've started riding up there every week.

Architect's Recommendations

2006-09-28T16:12:00.000-07:00

Rodney Friedman, President of Fisher Friedman Associates sent a letter to the Board of Directors of Summit Ridge on August 12, 2205. Fisher Friedman Associates designed Summit Ridge in 1977.
His recommendation is to use "traditional application methods as opposed to a panelized shingle product".
Please attend Board Meetings and tell the Board the type of siding that you prefer on your home. Recent contractor bids indicate that there is no difference in price between the recommended cedar shingles and a panelized product.

In the News!

2006-09-25T11:22:00.000-07:00

The Associated Press quoted me last week!

http://dwb.sacbee.com/state_wire/business/story/14331820p-15300404c.html

Big Sur Ride!

2006-09-25T10:42:00.000-07:00

What an adventure! My friends, Craig and Jeff, invited me to join them on a 2 day bike ride - The Big Sur Ride.

We arrived in Monterey on Friday afternoon so that we could take a little tune up spin - about 40 miles around the 17 Mile Drive. Fabulous scenery but really windy. A great excuse for an excellent dinner in Carmel.

Saturday morning we left our motel room at 6am for Carmel Valley and the start of the ride. The sun was rising as we left in 45 degree weather for the coast. About 45 minutes later we hit the ocean and began an incredible journey down the coast - awsome surf, famous bridges, warmer weather. By the time we hit the base of Nacimiento Road the temperature had reached 90 degrees plus. That hill was steep! But, what a view of the coast as we climbed! During the day we climbed a total of 7,700 feet and rode a total of 92 miles until we reached Fort Hunter Liggett.

We set up camp on the baseball field of the Army base, used the camp pool & locker room, and dined at the historic Ranch House - a Julia Morgan designed hunting lodge built for William Randolph Hearst. Lots of carbs and stories of "the climb". We were in the sack and asleep by 8pm!

Sunday morning we were breaking camp at 7am (38 degrees). We rode back to the Ranch House for breakfast and began day 2 of the trek - only 79 miles and 3,400 feet of climbing.

I made it. 200 miles in 3 days!

The adventure finished with a Mexican meal at the Carmel Valley Community Center, a cold beer, a cold shower, and the ride home with good friends.

Prices Decline - On Mortgages

2006-09-22T09:35:00.000-07:00

Mortgage interest rates continue to slide. According to Freddie Mac, the 30-year fixed-rate mortgage (FRM) averaged 6.40 percent with an average 0.5 point for the week ending September 21, 2006, down from last week when it averaged 6.43 percent. Last year at this time, the 30-year FRM averaged 5.80 percent.
Local mortgage brokers tell me that fixed rate money is so cheap that adjustable rate mortgages make no sense. They are also seeing a lot of refinance activity - homeowners are converting volatile loans to fixed rate.
What a great time to buy real estate! Lower prices and lower interest rates!

Seller Concessions

2006-09-21T16:46:00.000-07:00

The real estate market is cyclical and we're seeing a different part of the cycle as sales prices are softening and sales volume is declining. I'm reaching into the memory banks searching for common practices of the 1980's. Here are a couple of those practices:

Asking sellers to pay points to buy down interest rates on buyer's loans. Sometimes this expense yields much higher returns than an equal amount in price reduction.
Asking sellers to pay several months of the buyer's new loan payment
Asking sellers to pay several months of the buyer's new homeowner association payment
Asking sellers to carry a second note at a reduced interest rate
Offering interest free loans to sellers to help them stage their properties prior to marketing

Newer agents - those in the business for less than 10 years - think I'm a genius. All I'm doing is using some practices that haven't been needed in a different part of the cycle.

Marketing with SMS

2006-09-09T17:28:00.000-07:00

According to the National Association of Realtors, 74% of homebuyers start their search by using the internet. More and more buyers are using technology in their everyday life, too. The advent of SMS (text messaging) has allowed us to quickly send messages, information, and data using our cell phones. This medium has increased dramatically - Verizon Wireless anticipates the number of text messages sent by their users on their network to grow nearly 5x from 400mm per month (in July 2005) to over 2 billion per month.

As the average age of buyers decreases, the more important it becomes to promote property in a manner that will be relevant to these buyers. SMS is widely used by younger people in their everyday lives - why not use it to market listings?

I've just begun using SMS to market my clients' homes. Buyers send a text message from the comfort of their cars or while standing in front of the home for sale. Within seconds, they receive a reply including property information and my contact information. When interested, the buyer can request a callback from me, a property brochure via email, or schedule a showing instantly via text messaging.

Back in (REO) Business

2006-09-06T18:48:00.000-07:00

Be careful what you wish for.....

I received my first lender owned (REO) listing since 1999 because I went to a convention in Denver and let it be known that I was still available to market REO property in the Bay Area. I'm excited about re-creating the REO machine that was so effective in the 1980's and 1990's and look forward to a "new" source of business.

Oh - the new listing is located at 1045 Alcatraz Avenue in Oakland.

New Sale in Summit Ridge!

2006-09-05T14:42:00.000-07:00

1928 Piper Ridge Court closed escrow today for $757,000.

Complete information on this sale, and all other sales since 1997, is available at www.summitridgehomes.com.

Smoke & Mirrors

2006-09-01T09:24:00.000-07:00

I visited our managers office yesterday and picked up copies of financial records and other information - I hope to digest the numbers over the week end.

The BOD has signed a contract with Schryer/Thompson Construction to repair/replace siding on four homes in an amount that exceeds $41,000. This contract bid a scope of work that included the installation of 1/2 inch cdx plywood shear wall and new premium #1 fire retardant cedar shingles. The bid also includes a note: "If the new Shakertown panel is used the cost will be the same as listed below whether for Shakertown Panels or for plywood shear wall and individual cedar shingles."

The bid does not include the cost of sloped roofs nor does it include work on areas below deck levels. Permit fees and architectural/engineering, if requred by the City, are not included.

Although the bid includes the removal/re-installation of doors & windows, the contract clarifies that the contractor is not responsible for repairs or replacement of these items should they fail.

The BOD continues to insist that we can't determine bids for siding using existing architectural plans because they don't include all of the options. Yet, the BOD has approved a contract that allows for either Shakertown or cedar shingles at the same cost without architectural plans.
The BOD insists that single cedar will require additional costs for windows and door installation/removal due to thinkness differences. Yet the BOD has approved a contract that adds no additional costs for the work involving window/doors in either choice.
The BOD insists that without a bid for Shakertown without plywood shear that we don't have enough information to make a decision. Yet the BOD approved a contract without such information.
The spirit of the COSC recall was to give the Owners the respect to vote on what they wanted on their siding. Yet this BOD has approved work on 4 units and is about to enter into a contract for 6 additional homes without such a vote (cost exceeds $100,000). And there are no competitive bids.

The BOD's actions may be exactly what the Owners want but shouldn't the Owners have the choice as they were promised? Does it make sense to use an inferior product if it costs the same as the better product? Of course I don't know which product the BOD has chosen in this bid because we have received virtually no communication on the issue.

Communicate with your Board - let them know what siding YOU want on YOUR home.

The more things change.....

2006-08-28T13:55:00.000-07:00

PROMISES, PROMISES

The Board of Summit Ridge campaigned hard to recall the previous BOD and made many promises - most (none?) of which have been kept. It's been more than half a year since this group took office and I just reviewed one of their documents titled, "PLATFORM AND PLEDGES". The opening paragraph states:

"The issue behind recalling the Board is how to maintain our siding most cost-effectively while preserving our award-winning architecture. We fully intend to honor the right of Owners to vote on that issue. We have no hidden agenda and pledge to provide complete, factual, and straightforward information to Owners so they can make an informed decision. We pledge to maintain this open and informative policy on all Association matters."

The same BOD announced at last month's meeting that they were in the process of contracting to reside several units. The newsletter indicates that the BOD contracted with a contractor to replace walls on four units. Further, the BOD indicated that they only had obtained one bid to do work that will cost more than $40,000. They are also about to enter into another contract to spend about $60,000 of our money on several other units.

This group, formerly known as COSC (Concerned Owners Siding Committee), ousted the previous BOD under the complaint that the BOD was about to spend a large sum of money without the knowledge or consent of the membership. The BOD was going to select the type of siding that THEY wanted, thereby setting a precedent, without the knowledge or consent of the membership. The BOD was going to improperly spend Association funds on work that did not need to be done because there was nothing wrong with the siding. Their "platform" states:

"To respect the right of Owners under the CC&R's to vote before expenditures for capital improvements exceeding 5% of the budget are incurred, without mischaracterizing them as mere repairs to evade the provision....."

Although this BOD is planning to use Shakertown instead of single shingles, aren't they essentially doing the same thing that caused the recalled of the previous BOD? Aren't they about to spend a huge sum of money without the consent of the membership? Aren't they setting a precedent as to the look of the complex without our consent? Aren't they mischaracterizing them as mere repairs to evade the provision? Even if the action is proper, shouldn't the spirit of what they promised be honored?

Another "pledge" was "to begin immediately a systematic program of regular maintenance for whatever siding, possibly the great majority, is in sound condition. In accordance with professional advice, we will preserve that sididng and prolong it's life, somethat that should have begun years ago"

Half a year later there is no evidence of any systematic program of regular maintenance nor is there a plan advanced as to what the systematic program will be. The garage doors aren't even being maintained.

The latest newsletter indicates that the Board approved residing of four units. A big deal is made that "in none of these instances was there any failure in the siding." The August newsletter continues with, "Nevertheless, the siding must be replaced in order to get at and repair the cause of the leaks."

The BOD continues to emphasize that whenever there are siding repairs needed or whenever there is a water intrusion issue that it is not due to the failure of the siding. Does it matter what the reason is that the siding needs to be replaced and that the Association is going to pay to reside four units without our knowledge or consent? The last paragraph of the Pledges document states:

"A key issue is the extent to which using plywood sheets for either product will incur major additonal costs from having to accommodate the thickness of the plywood sheets. Likely requirements, which may vary from unit to unit, are: moving windows and all doors outward; adjusting structures that contact the building, such as balconies, their overhang, the fences; removing and replacing sloped roofs; and completely disassembling and reassembling wooded steps leading to front doors. Unlike the Board, we will ask for bids on all three options. Only in this way can Owners make an informed choice amoung alternative based on comparative costs and benefits."

Apparently, this BOD will move forward with residing four, or more, units in the manner that they deem prudent without the vote of the membership on the choice of three options. Does membership want plywood backing at an additional cost or not? What is the additional cost? Does membership want Shakertown or single shingle? The Owners do not have the option of making a choice. What about the major additional costs described above? Are the owners of the four units aware of these costs?

MISSING MINUTES

The Summit Ridge Newsletter, created by Gary Schouborg, Treasurer & Newsletter Editor, is more of an editorial than a reflection of the events. The highlights of the Board Meeting should be more than 9 sentences and should reflect ALL of the issues discussed, not just the issues that Mr. Schouborg wishes to mention. Why were questions regarding sign ordinance enforcement, parking ordinance enforcement, garage door maintenance, tree trimming and other issues that were discussed not mentioned in the newsletter? Where is the improved communication promised by the Board? Where is the new web site that will represent the views of ALL of the homeowners that was promised? Is the Board about to spend $10,000, or more, for a website that membership may or may not want?

I plan to attend more meetings and to keep my own minutes - which will be posted here. Homeowners are welcome to participate in this discussion and help complete missing information. We should all ask questions about where are dues are being spent and what is being done with our homes. We all have the right to moniter meetings and financial records; we all have the right to have our questions answered. There is much more to Summit Ridge than the siding issue yet the BOD seems to have little knowledge or interest in seeing that provisions of the governing documents are enforced.

If you are a member of the Association it is important that you attend meetings, become as knowledgeable as possible about all of the issues, and hold this - and subsequent Boards- accountable. I'm still waiting for the straighforward information that was promised so that we can make informed decisions and the open and informative policy on all Association matters.

I'm a New Traditionalist

2006-08-25T17:31:00.000-07:00

Marc Davison, Vice President of OnBoard - a real estate data provider in New York - wrote an editorial of the challenges of traditions, which was published on InmanNews.

I was honored to be mentioned in A fiddler on real estate's roof, along with some of the industry giants, as a New Traditionalist. Comparing the real estate industry to "Fiddler on the Roof", Marc says that New Traditionalists "are are the Perchiks of our time, encouraging change. Without them, Websites, digital signature software, content, news sites, mapping, blogging, listing portals, virtual tours, neighborhood data, IDX, lead generation, e-mail, phone call routing systems, CRM tools, transaction management systems, and hundreds of other innovations wouldn't exist keeping consumers fixated on real estate and keeping real estate attuned to the modern consumer."

After 36 years, I've learned that adapting to change is vital to survival. Those of us who are willing to learn new skills, those of us who are willing to listen to new ideas, those of us who are willing to share those ideas will prosper. Those of us who will only follow tradition are destined to be left behind.

Thank you, Marc.

Tour of Napa

2006-08-22T17:26:00.000-07:00

100 Miles of beautiful Napa Valley scenery I rode on Sunday with about 2,000 other riders. We left the Veterans Home in Yountville, rode up Mt. Veeder, back to Silverado Trail, into Pope Valley, over Ink Grade, and back to the VA.
I rode with 4 other riders, much stronger than I, and did my best to keep up - I was with them most of the day until we hit mile 75.
I didn't see them after that for the rest of the day.
The weather was perfect, the people were fantastic, CHP was everywhere to keep cars and riders safe from each other, and there was plenty of food.
I made it safely home!

On the REO Trail in Denver

2006-08-13T08:45:00.000-07:00

Last Tuesday I called my long time friend and client, Chad Neel, who is COO of Fidelity National Asset management Solutions and Fidelity National Field Services. These companies represent lenders such as Washington Mutual, IndyMac, and HSBC in the foreclosure process.

Those of you that have known me for a long time know that I represented major lenders in the management and disposition of their REO (real estate owned or foreclosure) properties for over 20 years. I have been thinking the past few weeks that I should make contact with people and companies that are involved in the foreclosure process because it appears that foreclosure activity may be increasing in the Bay Area. Hence, my call to Chad on Tuesday of last week.

He agreed that activity is picking up and that their should be some minor increase in this area. Chad invited me to attend FNAMS's 6th Annual Default Conference which took place in Denver on Friday and Saturday - an interesting two days.

Douglas Duncan, Chief Economist at the Mortgage Bankers Association (MBA) gave his views on the upcoming forclosure climate. His take is that the major cause of default is job loss and in areas where there is a major change in employment there is a major increase in default activity. He also sees borrowers at risk who have sub prime loans, adjustable rate loans, conforming limit loans, and loans that are 3 - 5 years old. Generally, he is describing our area as having a low risk of default because our employment rate is stable, more of our loans are jumbo loans that are not sub prime. I would expect to see higher default activity in areas such as the lower priced areas of Oakland, Richmond and areas of East Contra Costa County.

Mostly I was able to visit with people that I had not seen in 5 - 10 years - a fun experience. I also met national REO managers of some of the large banks for the first time. I look forward to an increase of business in an area that I excelled during the 1980's and 1990's.

New Sale in Summit Ridge!

2006-08-09T15:53:00.000-07:00

1942 Highridge Court closed escrow with a sales price of $825,000. Details are available at:

http://www.summitridgehomes.com/sold.htm

Please feel free to share the information with your friends and neighbors. www.summitridgehomes.com has posted information about the Summit Ridge HOA since 1997 including all closed escrows, newsletters, governing HOA documents, and other important information.

Make Some News of Your Own!

2006-08-07T15:05:00.000-07:00

The press continues to highlight the fact that the local real estate market is in a decline. Foreclosures are up, inventory is up, prices are down, homes won't sell, etc.

I wish that the sellers that I have encountered lately would read the news.

In the past week I have written three offers for three different clients - each time we were in competition with other bidders. All of the very clean offers were written for more than list price but only one client was successful in getting an acceptance.

What I see is a market where homes that are well priced and nicely prepared for sale are quickly attracting buyers - there does not seem to be a shortage of demand or money for quality property. Financing is still historically inexpensive and easy to obtain and buyers have cash/equities.

The real news:
There are plenty of buyers for quality properties and quality properties are selling quickly for list price or above.

Recent Sales in Summit Ridge

2006-07-26T16:07:00.000-07:00

For up-to-date sales information in Summit Ridge, go to:

http://www.summitridgehomes.com/sold.htm

or subscribe to the RSS feed for this site! I'll keep the data up to date so you'll always know what the neighborhood market is doing. Of course, feel free to contact me directly:
david@schubb.com
925-280-8521

Lights! Camera! Action!

2006-07-26T14:37:00.000-07:00

Ah, the internet - what a wonderful medium! I've just finished my first professional promotional video that only the internet would allow to be created at an affordable cost. It doesn't seem long ago that it took forever to transmit an image using dial up. Now, with broadband, we can aire full length presentations.

Here's a sneak preview:
http://production.turnhere.com/commercial/player_turnhere.cfm?name=schubb_V2.flv

I look forward to using this medium for marketing homes, too!

Paperless Transactions!

2006-07-24T14:57:00.000-07:00

Don't have a printer, don't have a fax machine, don't have a pen?

You don't need one to transact business with me! I've discovered electronic signatures and am now capable of sending documents to you for signature. You can approve/return them in a secure environment in minutes! All you need is an e-mail address, an internet connection, and a browser.

Docusign provides the service which will be the method used in the future by all Realtors to conduct their business. It's easy to set up, easy to use with Winforms and other applications, easy for you to "sign" and return documents.

Contact me if you would like more information - or why not try it on your next transaction with me!

$1 Million in Summit Ridge?

2006-07-19T16:36:00.000-07:00

No, not yet - but a mid-sized (2167 sq. ft.) home just closed escrow for $895,000! The long predicted real estate bubble is still not here as prices continue to increase and homes continue to sell. It's true that the available inventory has inflated since last year, the average marketing time is longer, there are fewer sales, and the median sales price is increasing more slowly.

It's becoming a normal market.

Experience shows that homes that are staged/remodeled/show nicely and are well priced are still selling quickly - some with multiple offers. On the other hand, homes that are unattractive and/or over priced don't sell. The days of sticking a sign in the ground and getting multiple buyers overnight is gone.

The days of needing the guidance and counsel of a real estate professional are back.

Northstar!

2006-07-12T11:54:00.000-07:00

What a fabulous day!
Intero Real Estate really is a different kind of real estate company. I was invited to tour the new project under development in the Lake Tahoe/Northstar area known as Tahoe Mountain Resorts. This project is about a $4 billion dollar project that is soon to be a very popular destination resort facility with championship golf courses, fabulous ski resorts, gourmet restaurants, shopping, spas, and more. Ritz Carlton is breaking ground next week on a new facility and all of the homes are the finest quality.
This facility is a reflection of Intero Real Estate's committment of providing only the best for their clients and their agents. We were flown to Truckee Airport (and back) in a private jet, escorted through the project and treated to a fabulous lunch on the lake. I could get used to the lifestyle!
Please contact me if you would like more information on the opportunities to purchase home sites, custom homes, townhomes, or fractional ownerships. Click on the Northstar title above for a link to their web site.

It's been a while....

2006-07-02T14:23:00.000-07:00

Wow! It's been more than a month since I've posted a new entry. A lot has been going on in my life - all good!
The past few entries related to the unrest in the Summit Ridge HOA. I've decided that I have too many important things to do that are of a higher priority. The HOA will sort itself out in time. After all, the condition of the siding is what it is and all of the arguing won't change it. It seems, from what I read, that the current Board is coming to the same conclusions as the previous Board. We'll see.
So, what's going on?

I affiliated with Intero Real Estate Services in January (after more than 20 years at Security Pacific) and have moved into an incredible new building at 1700 No. Main Street.
I have a fabulous private office with a huge glass window!
New tools are available to help with my business, support is unsurpassed, and I'm back in downtown Walnut Creek!
Next week I'm being flown in a private jet to Northstar (Lake Tahoe), being wined & dined to help market the high-end project there. More to follow on that, I'm sure! Business has been the best ever since I made the move and I look forward to the future there. Since the market is changing, I'm considering ramping up the REO machine again.

I acquired a new bicycle - an Italian job custom built by Pinarello that is carbon fiber and weighs about 15 lbs. I completed my first Century ride (100 miles) in Santa Rosa in May and try to get out as much as possible now that the weather is better. We rode Mt. Diablo this morning and will probably ride Bear Creek Road on Tuesday.
I took the bike to Carmel over Memorial Day weekend and hooked up with the local cycling club who invited me to ride with them on their regular Saturday ride. A great tour or Pacific Grove, Asilomar, and Pebble Beach. I didn't need to worry about where I was going - I only had to worry about keeping up!

Nancy and I spent last week in Chicago - my first trip to the "Windy City". While Nancy attended conferences, I attended baseball games at U.S. Cellular Field and Wrigley Field, I watched World Cup soccer from the ESPN Zone, I rented a bike and rode for 4 hours along Lake Michigan, I ate/drank too much, and I generally had a great time!

So, I'm back to my normal routine and will try to post more entries more often!

What's going on in Summit Ridge?

2006-05-21T07:42:00.000-07:00

The promise of better communication between the BOD and it's membership has not turned out to be as forthcoming as promised. The campaign promises of a web site that would represent the views of ALL of the homeowners is non-existent. Monthly meetings do not have a published agenda distributed prior to the meetings, members with opposing view points are not allowed to speak or are limited in their questions, maintenance policies have not been produced, and email questions go unanswered.
It's wonderful that our monthly dues have been reduced but what is the BOD doing with our money? Why have the CC&R's/By Laws been ignored when it comes to maintenance of our assets? What are we paying for?

Why have requests to view Association financial records been denied?

2006-03-22T17:25:00.000-08:00

Our Board members like to compare our siding issues to an automobile. They like to tell us that we would never replace a Volkswagen engine with a new Cadillac motor, especially if the existing engine is working. Therefore, it doesn't make sense to replace our siding at Summit Ridge with single cedar shingles.
As long as we're using this analogy.....
Most auto owners find that proper maintenance of their vehicles lengthens its life and improves the safety of the occupants. Prudent owners inspect the tires and, when they become worn, replace them before they blow out. Prudent owners inspect the engine belts and, when they become worn, replace them before they break.
Of course, we're not living in an automobile - we're living in homes made of wood and other materials. Proper maintenance does not mean paying attention only to the worst conditions or repairing only the worst problems. Waiting to replace tires and belts after they've failed is too late in the case of our homes. Active leaks lead to dry rot, fungus, and mold which threaten the structure of our homes and our health.
We've been told by COSC, and now our new Board, that they are studying the situation and will have a plan. This group, who was so concerned about our health with the possible installation of Hardyplank siding doesn't seem to be concerned about the threat to our health from mold.
I'll be interested to hear what is going to be done to correct the problems created by the Association when it authorized the installation of our current siding more than a dozen years ago.

All Quiet in Summit Ridge

2006-02-15T09:24:00.000-08:00

It's been a week since our Board was recalled and the new Board (aka COSC) took office.
Has anyone heard from them?
I've been told that the February meeting has been canceled.
Have any of our committee chairs heard from the Board? Who are the committee chairs? Has the Board kept the existing committees in place or have they replaced them? Do the committee members wish to remain on their respective committees?
When is the next meeting scheduled? When is the annual meeting scheduled?
What's being done to maintain our assets?
CSOC complained that the former Board did not communicate with us - when will we hear something from the new Board?
CSOC represented in recall meeting that they had a plan to maintain our complex in a more efficient, cost effective manner. When will we hear the plan?
How can we reach our new Directors? The old directors were accessable via e-mail. Will the new Board offer their email addresses/telephone numbers?
It would be nice to receive a flyer stuffed in the mailbox.

Homeowner with History of Leaks

2006-02-02T14:22:00.000-08:00

My name is Peggy Buran at 1965 Rim Ridge Ct in Summit Ridge.
Every one wants me to write another letter before the vote next week.I am the one that has had major leaking 3 years ago. The shingles were just 'patched" so I proceeded to finally have the interior repaired,($10,000 worth). Now, I had more major leaking through the walls and all the way up to the roof in the living room three days before Christmas. Schryer Thompson came to rip out the walls to the studs and dry out my new carpets and walls again. You may know my story by now but I don't think anyone believes me. What do you wish me to do for the cause: Old board remain and REPAIR MY WALLS SOON!!!! Let me know.

Selling or Refinancing Your Home in Summit Ridge

2006-01-27T09:28:00.000-08:00

The legal action filed by COSC against Summit Ridge Homeowners Association to prevent our Board from repairing siding has other serious consequences:
- You may not be able to sell your home as buyers will have a difficult/impossible time securing financing. Lenders usually will not provide financing in Homeowner Associations with pending litigation. Those that will provide financing will charge a premium.
- You may not be able to refinance your home. Lenders won’t refinance if the HOA is involved in litigation. Home equity loans are considered a refinance.
- Many Realtors will not show property if the HOA has pending litigation because they know that they will have a difficult time closing an escrow and because their risk of being sued increases.
- Economics 101 teaches that value is determined by supply, demand, and purchasing power. Values decline when the supply increases, when the demand declines, and when the ability to finance decreases. We are experiencing exactly that scenario.

There has not been a sale in Summit Ridge since October 2005. Buyers (and their Realtors) learn of our situation and purchase elsewhere.
- There are currently 5 homes for sale in Summit Ridge, none in Beacon Ridge.
- Since October 18, 2005, no homes have sold in Summit Ridge, 3 have sold in Beacon Ridge.
- Beacon Ridge homes are selling at full price, or higher. Summit Ridge sellers are reducing their asking prices in order to attract a buyer.

The Civil Code requires a seller to provide certain disclosure at the time of sale.
- A seller must disclose the reports from the two respected architects that describe the poor condition of our siding. Until we begin to acknowledge the data (which has been consistent for more than a decade) and reach a solution to resolve the issue, buyers will continue to devalue our homes.
- A seller must provide a buyer with copies of budgets, financial statements, reserve studies, and copies of meeting minutes of the HOA. The minutes will disclose the issues that we’re experiencing and the potential need to spend money to repair or replace siding. The financial documents will disclose that we don’t have enough money in reserves to pay for the work. Buyers will assume that there will be a large special assessment and/or increase in monthly assessment even if none exists. Based on that assumption, buyers will devalue our homes.

If we can keep the continuity of an experienced Board, follow due process and vote for three new members in April; and deal with the siding issue by vote consent of our membership, Summit Ridge has a uniquely bright future.
VOTE NO ON THE RECALL

Their Siding is Failing

2006-01-24T18:08:00.000-08:00

Summit Ridge neighbors:

My wife and I are the owners of unit 1989, Rim Ridge Court, one of the 10 units scheduled for partial siding replacement. We are writing to let you know of the deplorable condition of the exterior siding on our home, a condition which is, unfortunately, typical of many units at Summit Ridge not only the aforementioned 10. I should note at this point that my observations which are those of a homeowner are also honed by over 40 years of experience as a nationally registered architect as well. In that capacity, I have overseen the design and construction of more than 5,000 units of attached housing of which perhaps 10% used shingle siding. In 1973 my firm was the recipient of an award of design excellence from the Department of Housing and Urban Development.
The present siding at Summit Ridge, which most homeowners know by now, is a Shakertown panelized cedar shingle product. At our unit, the south and east facing walls are clearly beyond repair and are not far from complete failure. The shingles have been baked to a state not unlike burned toast by exposure to a harsh climate of sun, wind and rain which they were never designed to withstand. If held by the butt end and moved slightly, most of the shingles will break. Many of the shingles (50% at least) are warped, cupped or otherwise deformed. Shingles are delaminating from their backer board, a defect which is hardly surprising since it has been general knowledge among architects builders and building officials for many years that this is a bottom of the line product, used when the only consideration is initial cost.
The interface between window / door openings and the surrounding shingles is problematical in a number of locations due to excessive gaps caused by missing shingles and shingles that are loose. These areas invite water intrusion.
Damage to our interior is limited to the wall openings for windows and sliding glass doors. At least 60% of these openings have cracks in the wall surface from their upper corners up to the ceiling or from the lower corners down towards the floor. In some locations the accumulated layers of paint are separating from the sheetrock wall surface. Water has therefore penetrated to the inner surface of the sheetrock and at these locations a layer of paint separates us from exterior moisture. Water indicates dry rot within the walls, and with dry rot, mold can be expected.
1989 has serious problems, as do many other units in our community. Only a well organized program for siding replacement along with waterproofing and flashing repair using reputable construction specialists, prime materials, and the oversight of an experienced Board of Directors can turn this situation around. Such a program seemed to be underway only to be put off course once again by the shockingly uninformed actions of COSC. These people lack experience in several essential areas:
Construction expertise
Management
Financial planning
Behavioral skills

Don’t be mislead by COSC. Vote NO on the Board recall issue.

Thank you for your time--------Bill Eisenberg

YOU'VE BEEN SUED!

2006-01-24T13:34:00.000-08:00

A MESSAGE FROM THE FRIENDS OF SUMMIT RIDGE:

COSC has filed a law suit against Summit Ridge Homeowners Association to prevent the Association from repairing your home. There are 10 homes, scheduled for repair that will incur further damage as the winter storms progress. Failure to repair leaves the Association liable for further litigation.

COSC obtained signatures on proxies that amended the CC&R’s to prevent ANY board from spending more than about $50,000 per year on maintenance of our homes without a special vote. (We would need to vote most months to spend money – takes time and costs us money.)

READ THE FACTS & DECIDE FOR YOURSELF! - The Posard report and the Avelar report are available at www.summitridgehomes.com. The attached letter, formal response from President Nuss, offers another side of the story.

DUES WERE INCREASED TO PAY OUR BILLS, NOT OUR SIDING - Utility costs, landscaping maintenance costs, etc have increased. We also must repay, by law, almost $100,000 that we borrowed from our reserve account last year to pay for ongoing maintenance and funds that we spent due to COSC actions (more than $40,000). This statutory requirement is responsible for almost $50/month of the increase.

SINGLE CEDAR SHINGLES cost about 60 cents per sq. ft. more than Shakertown, will last 2 to 3 times longer, will be cheaper to maintain, and are fire retardant.

COSC PROMOTES SEALANT WHICH WILL COST US ABOUT $15,000 PER UNIT AND WON’T STOP THE LEAKS.

LITIGATION LIMITS OUR ABILITY TO SELL OR REFINANCE – your home values are being impacted by COSC’s actions.

DON’T BE FOOLED! - There’s more to maintaining our homes than just siding. Taking care of our properties require years of study and expertise. Don’t accept a totally inexperienced group to be our Board. Voting to recall the Board will remove any continuity of management.

FAQ's About Our Siding

2006-01-24T13:27:00.000-08:00

FREQUENTLY ASKED QUESTIONS ABOUT REPLACING OUR SIDING

1. Why do we need to replace our siding, can’t we simply repair it?

No.

Architectural reports by Posar and Avelar (Avelar’s report is available at www.summitridgehomes.com/avelar.pdf) recommend replacing the siding rather than repairing it. Technically, there are several reasons for this suggestion:
· The interlocking design of the Shakertown panels currently installed prevents a targeted replacement of damaged panels. Instead, proper repairs require replacing entire sections at a time.
· Current installation and flashing around windows and corners is defective. This has resulted in water intrusion into some units and in any case, deterioration of the paper barrier – the last defense against water leaks.
· UV exposure is now causing the siding to disintegrate rapidly.
2. Are these problems unique to Summit Ridge?
No.
Several communities around us have had problems that required significant assessments be levied among owners. For example
Chanteclair (Geary Road, Walnut Creek) - $40,000 assessment paid in one installment. Owners may participate (or pay cash) in a HOA loan, amortized over 15 years. Monthly payments are added to the base monthly assessment until paid in full. Balance is due upon sale.
3. What are the current siding alternatives being considered?
There are two options under consideration: single cedar shingles or Shakertown panels. Both options would be installed on plywood sheathing. Either of these siding options would retain the current look of your home.
4. I have installed new windows, will new siding with sheathing require me to install new windows?
No.
Proper installation of the new siding will require the windows to be moved so that proper flashing can be done to prevent leaks around the windows. The same windows will be repositioned in place after appropriate flashing is completed. In some cases, i.e., newly installed windows, re-flashing can be done without moving the windows.
5. I have the original windows that were installed when the complex was built, will my windows need replacing?
No.
The siding options under study (which include sheathing) will permit you to reinstall your old windows. However, the original silicone in your windows is quite deteriorated by now and you are probably already thinking of replacing your old windows. If you are considering installing new windows down the line, it is wise to do so when your unit gets new siding.
6. How much will the new siding cost?
We do not have bids at this time so we cannot provide you with the final figures. Our current estimates suggest the cost of residing per unit will be in the neighborhood of $45,000, A portion of this will come from existing reserves and the balance through a special assessment. At the moment, our estimates suggest that the cost different between single cedar shingles and Shakertown panels is within 3% of each other. Stay tuned for more information coming your way.
7. How does the association plan to finance the project?
At the moment, we are contemplating two concurrent alternatives, both of which require a special assessment to be approved and levied among the membership. One option would be to obtain financing through the association; the other option would allow each individual member to obtain their own financing. For most members, it is likely that they will be better off obtaining their own financing. Home equity lines tend to have more attractive interest rates than those the association can negotiate. In addition, depending on your specific tax situation, you may be able to deduct interest payments on your home equity line, which would further lower the effective cost of the loan. However, if you are unable to secure a home equity line or other forms of financing, the association plans to offer its members the alternative to borrow through the association and make regular repayments with membership dues.
8. Does the new siding have fire-retardant properties?
Our current siding is not treated with fire retardant and because of its age, is now highly combustible. A fire beginning in one unit will rapidly overtake adjacent units well before the fire department has an opportunity to intervene. The Shakertown panels would essentially have the same properties as our current siding – they are not treated with fire retardant. However, the single cedar shingles the association is considering are premium #1fire retardant cedar shingles and would give the fire department a fighting chance to save a building that catches fire.
9. How easy to maintain is the new siding?
By nailing either the Shakertown planks or the single cedar shingles onto plywood sheathing, we dramatically reduce the likelihood of leaks in the future. However, the Shakertown planks have an interlocking mechanism (similar to our current siding). Shakertown panels have a 10 year warranty against defects in workmanship, (adhesion to a plywood backing). In the eventuality that a repair is needed on a wall, an entire section of planks would have to be removed. Single cedar shingles do not carry a similar warranty because they are not glued to a plywood backing but have the advantage that they can be replaced individually and hence, much more cost effective.
10. Won’t the high cost of the residing project make our homes less desirable?
To the contrary, the value of your home will increase significantly. Current building standards recommend plywood sheathing on which to nail any type of siding. In contrast, our buildings have Shakertown panels directly nailed onto the studs. Because these panels are staggered, many of the joints between panels do not have a stud behind them. Further, the panels require a 1/8" gap separation between panels for expansion. This has led to warping, UV breakdown of the water barrier behind the panels, water filtration, and in some cases, we have detected, mold and dry rot. Because you will need to disclose the findings of the Avelar report at the time of selling your home, the problems described in the report will put off buyers and reduce the collateral your home offers to prospective lenders of the buyers of your property. Given current property values, the present discounted value of our siding repairs will be little different than a kitchen remodel. The assurance of a new siding, where all mold, dry-rot and water filtration problems are resolved, will pay off into higher resale values and less time on market.
11. Where can I find more information about the siding reports, the history of the siding problems, the siding options that have been explored or any other issues that I cannot think of at the moment?
Glad you asked!
· The most recent architectural report provided by Richard Avelar and Associates is available at: http://www.summitridgehomes.com/avelar.pdf. You will find details of their tests, including extensive photographic materials and a summary of the condition of the siding in your particular unit.
· The architectural report prepared by Posard + Broek is available at: (give web address). I’ll have to get a copy and upload
· A description of the Shakertown planks and installation instructions and recommendations is available from their website at http://www.shakertown.com/. In addition, the Board has brochures, and Shakertown installation instructions which you can review by contacting Jim Nuss at 1920 Piper Ridge Ct., 946-0274.
· A description of the single cedar shingles is available from http://www.cedarbureau.org and many other sites on the web you will find through a Google search by typing in Cedar Shingles.

Please let us know if you have other questions, we are happy to answer them!

More Homeowner Comments

2006-01-24T13:19:00.000-08:00

From Oscar Jorda:

WHY VOTE NO ON THE RECALL

The recall is unwarranted

· The recall process is reserved by our By Laws for cases of misconduct, negligence or mismanagement by the Board. Disagreement with the Board is not a sufficient justification for a recall.
· Petitioners for the recall present no evidence (but plenty of rhetoric) as to why the Board should be recalled. The reality is that our neighbors currently serving at the Board have dedicated many, many hours of their private time in researching the association’s best alternatives in regard to our siding problems. They have met with two teams of architects, several contractors, manufacturers and lawyers in trying to decide what alternatives best serve our community – in other words, they have relied on expert and professional advice, not on innuendo.
· Let’s be honest: most petitioners for the recall do not particularly object nor dislike the current Board, their agenda is to prevent the association from replacing the siding in our homes. Ultimately, this should be a decision arrived at by a vote of the association’s membership, not by a political coup d’état. Do not let your rights be eroded by the recall.

The recall is harmful to the association: The recall process is a recognized democratic process but it is not costless and is being missused. Regular annual elections for three retiring Board members (including the President) are scheduled for this April. Recalling the association in February has the following practical consequences:

It recalls Board members whose terms expire in any case.
The association is forced to remain rudderless. Even if the association elects interim Board members at the time of the recall – a process whose legality may not be supported by our By Laws – it takes several months of dedicated effort to “get up to speed” on the association’s business. Since there will be no continuity of Board members to appraise the interim Board (a situation that is contemplated in our By Laws by staggering Board members terms to ensure continuity), for all intents and purposes, the association will have to rely on the management company and the association’s attorneys. Expect their fees to reflect their additional billing hours.
Interim Board members would be elected without due process of candidate review. Candidates to the board during regularly scheduled elections are required to provide their biographies and brief statements 30 (??) days prior to the election. This process of allows the association to form informed opinions on the most suitable candidates. The recall process eliminates this choice since there is no practicable timeline to arrange for the review process.
The instability created by the recall and the uncertainty about the probity of our siding, effectively erode our properties’ value. This is incontrovertible regardless of your position on the siding issue: Legal disclosures at the time a unit is sold require that a buyer be informed about the two architectural reports prepared by Posard and Avelar stating that the siding needs replacement. It is immaterial whether you trust these reports, a buyer will not think twice about their validity. In addition, the climate of animosity and uncertainty between petitioners of the recall and the association compounds a potential buyer’s misgivings. Buyers will require sizeable discounts on home prices, not only because they may fear water leaks in their homes, but also because mortgage lenders will refuse to provide loans at competitive prices or at all since our homes will not provide appropriate collateral. The recall sends an unequivocal message: it is not a sensible investment to purchase property in Summit Ridge. There have been no sales of properties in Summit Ridge since last October but plenty of sales in Beacon Ridge.

The recall does not change reality: Professional comprehensive reports prepared by two architectural firms, Posard and Avelar (the latter available at www.summitridgehomes.com/avelar.pdf ), reach the same conclusion: the siding in our complex needs replacement.

This report was prepared in response to petitioners of the recall and by mutual agreement between petitioners and the Board.

The recall is confrontational and promotes resentment among neighbors: As an association, we are faced with a difficult issue that has important financial ramifications. It is therefore natural for neighbors to share different points of view and opinions. That dialogue between neighbors has already resulted in a significant narrowing down of the siding options that are available to us. As an association, we have expressed preference for any residing to maintain the look of our neighborhood over siding materials that would have lower maintenance costs but would drastically alter the character of the complex. The Board continues to work in preparing viable and economic options for the association to ponder. A recall of the Board effectively undermines this dialogue and contributes to a polarization of the neighborhood into an “us versus them” environment. We all share a desire to keep our membership dues as low as possible while maintaining the habitability of our homes and the environment that surrounds them. The association meetings provide a forum for us to civilly debate our options and arrive at a consensual solution.

From Debra Salmi:

Dear Homeowners:
We, the Friends of Summit Ridge, invite you to join with us and restore
order to our community.
In recent months you have heard and read many complaints lodged against the Board made by a very outspoken group of homeowners who call themselves Concerned Owners Siding Committee (COSC), formerly Save Our Siding Committee. Well, we've heard enough and believe it's time to set the record straight.
a.. These homeowners have one objective and one objective only, and that is to forego all plans to replace our failing siding and instead attempt to maintain it.
b.. The action of the COSC began with proposing an amendment to the CC&R's limiting Board expenditures for capital improvements. They view siding repairs as capital improvements, not maintenance.
c.. Although the current Board met the demands of this committee for a second architectural study (Avelar) which completely supported the first report (Posard), the COSC refuses to accept the recommendations of these reports.
d.. The COSC now seeks a recall of all Board members and seeks to elect members of their committee to fill all five Board seats.
e.. Most important, this committee now has filed for an injunction to prevent the Board from entering into any contracts to repair the 15 walls which are leaking or are in a state of total failure.
f.. No Summit Ridge homes have sold since October. The word is out that Summit Ridge is in trouble.
Are these the people to whom you want to entrust the future of Summit Ridge?
Please vote against the recall.
Friends of Summit Ridge

Comments from Summit Ridge Homeowners

2006-01-21T19:38:00.000-08:00

From Margery Widroe:

I did not speak up at the Board meeting because I assumed from the newsletter that, no matter how dilatory, the repairs were indeed going forward. Those of us with water damage have all thought that. Now with the recall and the law suit--I am totally aghast!
Have we spun out of control as an effectively operating community? Those of us with water damage need to know. I have postponed painting four times!
The COCS flyer claims that "...the underlying issue [for the recall] is Cost Effectiveness..." I couldn't agree more! I speak from recent experience. My condo in Florida was damaged in the 2004 hurricane. Our Board took this opportunity to repair everything to the highest degree of protection and to improve on what we had before. The assessment was large and some of us believed the reconstruction was overreaching. Our Board justified their expenditure as "cost efficient because we were doing the work anyway." (Though some members questioned this degree of reconstruction it never occurred to anyone to recall the Board! We were unhappy, but never uncivil! What a disheartening contrast to the present experience.)
Anyway the Board proved to be right! Ivan was followed against all odds by Hurricane Wilma this year. We had much much less damage because of our extra care than either of the sister developments on both sides of us. Most important we were not liable for suits brought by homeowners because we had not rebuilt and repaired promptly and properly. The value of our units has gone up amazingly because: 1. so many comparable units were taken off the market by law suits 2. we now have a reputation for having the safest and most built-up development in the area.
Cost effectiveness has taken on a whole new meaning for ALL of us.
In Summit Ridge we are now liable to homeowners damage suits for improper or belated repair. We, also, now have damage and destruction studies, which must be disclosed when try to sell our unit.
Not least, due to the intemperance of a few, we all now have the reputation of a contentious development, beset with damage and litigation problems. With no plan in place, law suits threatened, and the possibility of an inexperienced Board taking on problems they don't admit exist, the future looks litigious and the value of our condos problematical for the indefinite future.
These are the reasons I feel I must vote no on the recall though, at first, I certainly was for their version of cost effectiveness. I have learned the hard way. Margery Widroe, 1974 Fair Ridge

From Jim Nuss:

The Concerned Owner’s Siding Committee has sued the Association and the Directors to stop repairs on walls of homes where there are 3 on-going leaks and/or the walls are in danger of failure. The effects of this action are indeterminate but could affect such events as a home sale, a refinance, home values, and each homeowner due to cost of defending the suit.

Form of the proxy: The proxy form provided to you by the Association is the standard form as per our by-laws. A new proxy will be utilized at the Annual Meeting in May which will nullify this proxy.

The Board did not assert the right to commit the Association to a multi-million residing project. This requires a special assessment by vote of the Homeowners. The Board did discuss the possibility of raising dues by 20% per year to raise funds for a siding project and was remiss when making this statement. This Board or any Board cannot enter into a contract for the length of time required for the proposed siding project (5 to 6 years) without homeowner approval. Members of this “committee” were on the Long Range Planning Committee and are aware of project time table which included obtaining quotes followed by a vote of homeowners on both choice of siding and a special assessment. Conveniently this “committee” chooses to ignore their participation.

The 2006 budget must be prepared and mailed before the end on November, 2005. Estimates are employed to determine a budget because expenses for the current year are not complete. The 2005 Financial Results are finalized in mid-January. The 2005 Financial Results indicate an Operating Budget cost overrun of $93k which was borrowed from reserves. The Budget for 2006 was mailed on November 23, 2005, along with other disclosure exhibit. This Budget also demonstrates the amount of the reserve contribution increase in 2006 over 2005 of $95k. This amount covers funds borrowed from reserves which are required by statue. As it turns out our estimates in mid-November were fairly accurate. Operating Budget expense overruns were due to Legal Expenses & Professional $40k, Settlement with Hudson Management $10k, Landscape $10K, General Repairs $17K, Pest Control $2k, Pool/SPA $3k, Utilities $8k, and a few other miscellanies items.

The budget for 2006 allowed for increases in Management and Landscaping plus estimates based on experience or anticipation of a future event such as an on-going temporary sidewall winterizing.

The Board has a fiduciary obligation to make repairs. The Board did request bids for walls on 10 homes whose walls have a high probability of leaking. Leaks occurred on three of these homes during the December storm. Up until recently it was impractical to ask for a vote on repairs because full costs were not available until mid-December. Then the storm came. Further, the by-laws determine the time period for mailing ballots prior the date of a meeting to determine the outcome of a particular vote. Impractical when leaks have occurred or the walls are in eminent danger of failing. The “committee” has stated that the Board should wait for leaks before repairs are made. This is not in the best interests of homeowners who are responsible for interior damage to their homes.

Two architectural studies have determined the status of our siding. One of these was requested by members of the “committee”. These reports may be viewed on www.summitridgehomeshomes.com . There are homeowners who experienced leaks who can attest to the condition of their sidewalls, problems caused by leaks, and costs of repair. Incidentally discussing the sidewalls this includes not only the sidewall panel which you can see, but also the felt paper, and flashing behind it. When reviewing the architectural reports please take time to read Posard’s Proposed Mediation Scope -Level 2 - hybrid repairs (Shakertown and individual cedar shingles) would be a “good” repair approach. You will find this on paqe10 and 11 of the Posard Broek + Associates report.

The Board announced the lowest bid for the cost of Shakertown on studs, Shakertown on plywood, and individual #1 fire retardant shingles on plywood at the last two board meetings. All bids were not received from contractors until December. The Board shared a bid comparison with the “committee” recently. Two of bidders quoted higher prices for Shakertown on plywood. The price for Shakertown must have gone up after receipt of the first bid and we are checking this.
A brief summary of the bids are as follows:

Shakertown Shakertown #1 Shingles
on studs on plywood on plywood
Bidder #1 per sq ft $15.50 $17.50 $18.11
Bidder #2 per sq ft no bid 28.42 28.09
Bidder #3 per sq ft 22.37 26.20 25.10
Bidder #4 per sq ft no bid no bid 21.93 (includes sealing shingles)
Shingles are fire retardant treated, Shakertown panels are not.

The proposal to treat the existing sidewall panels in their present condition is controversial. No one can guarantee how an expenditure of about $13k to $15k per home and its frequency will extend the life of our walls. But, as the architectural reports indicate and our leak experience indicates, the problem with our walls goes beyond the surface panel.

This reckless “committee” is costing the Association thousands of dollars unnecessarily. Their desire to work toward a solution was demonstrated at a meeting with the Board on January 3, 2006. This meeting was requested by their attorney to mediate the siding differences. The only issue this “committee” would discuss was the form of the recall proxy and matters to be determined at the Special Meeting. If this “committee” seriously wants to contribute to the Association and gain control of the Board it would have been in the Association’s best interest to campaign to elect Board members at the annual meeting in May. The terms of three (3) Directors expire this April.

Please vote “NO” on this recall. This will allow time for other candidates to come forward for Annual Meeting in May.

From Bryan Welland:

I wanted to add my 2 cents - particularly in light of all the misinformation that was contained in the COSC mailing I received yesterday... I believe that the current Board has a "marketing problem" that COSC has seized upon and if it's not overcome before the election, COSC will prevail.

COSC is implying that there isn't a problem and the board hasn't been effective in discrediting their position. The 10 owners with current problems should be the focal point of a campaign that shows everyone that their issues are real, very serious and will impact everyone eventually if the existing siding is not addressed. Currently, "the 10" are invisible to the bulk of the association (which makes it easy for COSC to dismiss them). Only one spoke at the last Board meeting and only for a moment and it caused barely a stir. I can only imagine the impact had ALL 10 been there - each explaining (hopefully with some emotion) how their failed siding is damaging their homes and impacting their lives... Has anyone examined the potential litigation cost to the association if homeowners are reduced to suing in order to get their homes repaired? Who is responsible for interior damage if failed siding is not addressed by the association?

In short, from my perspective I think COSC has the momentum because they are appealing to the universal desire of folks not to spend money. Unless a majority of the membership is convinced that there is a real issue and it will hit them - and cost them much more in the intermediate term - they will vote for COSC. There seems to be ample data available to present a very compelling (dare I say obvious) argument that something needs to be done - and soon! The trick is leveraging the 10 people, the expert reports, some litigation analysis on costs if nothing is done, etc... and boiling it down into a simple message that will sway a majority - all of course before the recall vote.

This is just my perspective and I don't know if this is an avenue that has been explored or if the group is interested in this direction. I'm certainly interested in helping any way I can. I'll try to see Larry this weekend and get an update on what was discussed during the meeting.

From Larry Krueger:

I suggest we discuss drafting a letter to be sent to ALL HOMEOWNERS informing them about this litigation to stop our homes from being repaired and that this is THE SAME GROUP OF PEOPLE who now plan to run for the Board.

I'm sure that there will be more to follow. Please ask your neighbors to submit statements regarding their feelings about the recall election and/or the situation at Summit Ridge.

Litigation in Summit Ridge

2006-01-21T11:35:00.000-08:00

COSC has filed litigation to prevent the Board from repairing our homes. They insists that properly repairing failed siding is a capital improvement, not maintenance of existing assets and therefore a violation of the CC&R's because the cost exceeds an amount that they find acceptable. They insist that this repair action must be put to a vote of the membership.

Once again COSC has failed to comprehend the consequences of their actions.

COSC was successful in obtaining proxies to vote an amendment of the CC&R's. But what did they represent to the membership in order to obtain these proxies? The end result is that we have a governing document that is unclear. By redefining "capital improvements" to mean the replacement of existing assets, we now must restrict our annual repair/maintenance budget to 5% of the total budget. We recently spent more than that on sidewalk repair and COSC felt that was an acceptable Board decision. So, even their amendment is unclear to them. Apparently, the amendment was only to apply to siding - but it doesn't say that. Do we want/need a special vote every time we need to replace or repair a roof, fence, sidewalk, etc.? The 5% amount will be quickly used each year and we will be forced to spend thousands of dollars on special elections and will be forced to wait for the results before we can get the work completed that our CC&R's meant for us to have.

If COSC is successful in obtaining enough proxies to force the recall of the Board, they will presumably have enough proxies to vote themselves in as Board members. Do we want a Board who is unclear on what our governing documents mean? Do we want a Board who uses intimidation, scare tactics, and bullying to promote their agenda? Do we want a Board who has no experience running the daily affairs of our community?

And what about our neighbors who have homes that continue to be damaged by water intrusion? What do we do when they file their own litigation to receive what they've paid for with their dues. How long do we want to continue to pay tens of thousands of dollars in legal fees?

Please, let's restore order to our community. Vote NO on the recall and let's think about restoring our CC&R's to a condition that we have a viable document.

Am I Stupid?

2006-01-09T18:46:00.000-08:00

I've just received the latest from COSC and have read it about four times. I'm amazed that they think that if they write it that it must be true?
The purpose of the meeting is to vote on a recall provision. Period.
How did it become a meeting to vote on the removal of the Board, and, if it is removed, to elect replacement directors?
Where does Sec. 6.6(d) discuss elections OTHER than the recall election? Where does Sec. 6.6(d) specify that an election be "immediately" held?
Sub paragraph viii indicates that the Board attorney or the Manager shall control the Association until there is an election - it doesn't say that there MUST be an immediate election.

In fact, how does COSC propose that membership choose candidates? Do we accept the ballot that they give us on Feb. 7? Aren't we allowed, by law, other opportunities? Aren't we allowed, by law, the ability to have the time to research the candidates' qualification, ask questions, and think about our choice?

Maybe I'm stupid but this interpretation of the By Laws makes no sense to me. Vote NO on the recall. Let's restore order to Summit Ridge by having a fair election at the annual meeting in a few months.

Relay! Online Transaction Management

2005-12-21T19:29:00.000-08:00

Real Estate transactions have become a paperwork nightmare. The number of documents continues to increase and the size of each document seems to be expanding. Just trying to keep track of what documents are needed, who has signed, who needs to sign, and delivering copies has become a time consuming process.
The California Association of Realtors (CAR), has promoted a new online management system called Relay! The system is web based and still in development. So far, subscribers may add contact information of the parties involved in the transaction, upload documents, share access with appropriate parties, and create CD's of the transaction. Calendar functions and other improvements are scheduled for Q1 of 2006.
As soon as CAR includes the product with the dues, like Winforms, the system will become a standard of the industry. Relay! also interacts with Winforms Online.
All of my transactions are currently online - contact me if you want more information about how I can put your next transaction online!

Latest Statistics

2005-12-17T12:00:00.000-08:00

Sales Activity:
According to Dataquick, the number of sales in the Bay Area has decreased, both from October (7.5%) and from November, 2005 (10.5%). But, the median price established a new record of $625,000. The median price rose 1.8% from October, 17.3% from November a year ago. In Contra Costa County, the number of sales dipped 10% from last year and the median price increased 24.3% during the same period.
Dataquick also reported that indicators of market distress are still largely absent. Foreclosure rates are low, down payment sizes are stable and there have been no significant shifts in market mix.
The Contra Costa Association of Realtors reports that the number of active listings on multiple listing service is 120% (detached homes) and 291% (attached homes) more than last year. The number of pending sales is -16% (detached) and -23% (attached) compared to October 2004. The number of closed escrows is -16% and -9% compared to the same time last year. The average price increased 16% (detached) and 19% (attached).
Interest Rates:
Freddie Mac reported 30-year fixed-rate mortgage (FRM) averaged 6.30 percent, with an average 0.5 point, for the week ending December 15, 2005, down from last week’s average of 6.32 percent. Last year at this time, the 30-year FRM averaged 5.68 percent.

The market appears to be slowing, as it normally does during the holiday season. As an active Realtor, I'm seeing fewer multiple offers, more price reductions, more inventory, and homes remaining on the market longer. I have been successful in selling homes substantially below list price and contingent upon the sale of the buyer's home. I have also been unsuccessful in multiple offer situations. The number of sales have declined and are expected to be fewer in 2006 than in 2005. Yet, the prices continue to climb - at a slower rate. Predictions are that median prices will rise between 6% - 12% in 2006. Interest rates are predicted to rise slightly next year, too.

Those were the days....

2005-12-16T19:31:00.000-08:00

I was thinking of all of the changes that I've seen since I've been in the real estate biz. Here's a few thoughts.....

Loss Mitigation Consulting

2005-12-16T16:51:00.000-08:00

As some of you know, I spent more than twenty years representing lenders in the asset management and disposition of their REO properties (properties that they obtained via foreclosure). Many of these lenders discovered that foreclosure is a costly process and statistically they lose about $50,000 per loan. Consequently, lenders are attempting to stop foreclosures before they start by hiring consultants to meet with borrowers. Some lenders are offering borrowers the ability to recast their loans, modify their loans, and even forgive back payments. My job is to visit borrowers and to gather information for the lender to see if there is a way to solve the problem. Sometimes the lender can help the borrower stay in their home and avoid foreclosure and sometimes I can help the borrower by selling the home. It will be interesting to see how this program develops!

Career Day!

2005-11-10T16:25:00.000-08:00

Los Cerros Intermediate School in Danville provided valuable (and fun) career information to its students by inviting local business people to visit during lunch break. Students were able to ask questions of various professionals including a police officer, air traffic controller, television sports reporter, professional baseball player, doctors, video game programmers, and me!

It was fun for me and I was impressed with the questions that I was asked - some of these students were thinking! They were also polite and confident. I forgot what a difference there is between 6th, 7th, and 8th grade students! These students are most fortunate to have Nancy Schubb as their counselor!

Back to the Future

2005-10-20T14:44:00.000-07:00

When I moved to Summit Ridge in 1994, the neighborhood was in the middle of a residing project. I heard that there was major debate as to whether or not the original Shakertown siding needed to be replaced, what it should be replaced with, how much money should be spent, and how the money was to be raised. Shakertown maintained that their 1993 product was superior to prior products and that we could solve our problems less expensively than using single cedar shingles.

Millions of dollars were collected through special assessments and loans, the siding was replaced, and SRHOA filed litigation in 1998 due to allegations of defective materials, improper installation, and improper project management.

The suit was settled with a cash payment by Shakertown and the contractors, Shakertown removed the product from the market, and we have been dealing with the defects ever since. Massive repairs have been made, portions of the siding are disintegrating, and pieces are falling.

Previous Boards have recommended to homeowners that we begin study of repair/replacement of the siding as early as 1999 when the Long Range Planning Committee was formed. Presentations were made on several occasions to membership by the Committee demonstrating the need for increased reserves to deal with the upcoming need for money to pay for siding replacement in the future.

These presentations and reports were largely ignored.

Now, years later, we are faced with the same issues. There are some who believe that there is nothing wrong with the Shakertown product and that the issue is the result of faulty installation. It was established during the past litigation that the contractors did a poor job and, indeed, that was - and continues to be - a contributing factor to our water intrusion problems. It was also established that the material did a poor job of keeping water out and that our climate caused the material to fail.

But, let’s take the emotion out of the arguments and look at some of the facts, claims and representations:

- Shakertown represents that the life expectations of the product are ten to fifteen years – with proper installation.
- Shakertown indicates that current installation guidelines require plywood backing (which we don’t have).
- Architects who have looked at our project indicate that the product is inferior and not recommended for new projects.

Let’s work together to find answers to these issues. The LRPC should be the vehicle for all concerned members to gather information and present findings to the Board. Amending the CC&R’s every time a Board takes an unpopular action is unnecessary and potentially dangerous. Continuing on the present course of having “two boards” and “3 -3 committees” is not the most efficient way to resolve these issues.

Some homeowners maintain that installing less than the best is an acceptable option. We did this last time - do we want to go through this every dozen years?

Real Estate Bubble?

2005-10-13T14:50:00.000-07:00

When will the real estate bubble burst? Here are my thoughts on the issue:

http://www.estatevision.com/bubble.htm

Jon & Breck's Wedding!

2005-09-25T15:13:00.000-07:00

Jon & Breck were married Saturday, September 24, 2005 at Monterey Peninsula Country Club!

A copy of Nancy's slide show is available by clicking here - if you would like to download, right click on the link and save a copy of the file (23.5 MB).

Here's a link to a photo album assembled by Carly.

Nancy's photo album.

Tour of Napa Valley

2005-08-24T03:57:00.000-07:00

That's me nearing the end of my first metric century ride! 65 miles of beautiful scenery in the Napa Valley including a grinding 3,000 foot climb over Ink Grade.

It was quite an adventure as I participated in my first event with 2,000 other riders - some rode 30 miles and some rode 100 miles. The party atmosphere, rest stops packed with food, colorful jerseys, and bar-b-que at the end made the trip memorable - as did my first wipe out.

Siding, Siding, Siding

2005-08-18T13:51:00.000-07:00

Does the siding in Summit Ridge need to be replaced?

It depends on who you talk to. There are those who maintain that all of the siding must be replaced with only the highest quality material that keeps the original look and feel of the complex. Some want a similar look but don't want it at the highest cost. Some want an entirely different look and some don't believe that there is anything wrong with what we have. We only need to do a better job of maintenance.

When I think back, I remember that the HOA sued the manufacturer, contractor, and project manager because we had water intrusion problems. The Association levied a special assessment and raised the dues to pay the litigation costs and the process began. The attorney advised SRHOA to retain the services of a reputable architech to conduct a survey of the condition of the buildings. The findings of that survey were that there was improper installation, inadequate supervision, and defective materials.

The suit was settled with SRHOA receiving cash from the defendants but there was no remedial work completed. The manufacturer stopped selling the product as they discovered that it was not reliable.

Now, about a decade later, homeowners are still facing the same problems - and perhaps added issues? If the siding was a big enough issue to cause litigation back then, could it be in better condition now?

To 6% or not to 6%?

2005-06-11T15:30:00.000-07:00

How much should a Realtor charge to represent a seller in completing the transaction? How much is a Realtor worth? We hear both sides:
Prices are going up at 20% or more per year so Realtors are getting a 20% per year raise - much more than their costs are increasing.
Or, Realtors are expected to burden all of the risk while working on a 6% contingency basis. And, or course, that 6% is divided with another brokerage, the agent's broker, the IRS, etc. Realtors don't get a return on their investment until the escrow closes - if it closes.
Or, it's a seller's market so the Realtor doesn't have to do much to get paid when representing a seller.
Or, it's a seller's market with multiple offers and a buyer's agent may need to write offers on many homes before winning one so the effort is multiplied.
So, how much should a Realtor charge? First, let's agree that most homes are sold by cooperating brokers through the multiple listing service. Therefore, part of the listing fee must be offered to the buyer's broker. OK - how much is that? In order to be competitive, somewhere between 2% and 3% of the sales price must be offered to the other broker.
Now the listing broker needs to consider how much the listing side should be - what's the cost of printing brochures, creating web sites, hosting broker tours, for sale signs, lock boxes, newspaper/magazine ads? How much must be paid to the broker and the IRS?
At some point a fee can be so low that it doesn't make sense to take on the risk of advancing all of those costs and the risk of potential litigation (you don't need to be wrong to be sued!).
Here's what I think:
If the market dictates that a listing broker can successfully market a property with a 2% buyers fee, then he can usually charge 4% because the market must be a hot, seller's market. But, in most cases, to be competitive the listing broker will need to offer 2.5% to the buyer's agent. And, in order to provide the goods and services that the seller requires/demands, the cost can run anywhere from $5,000 to $10,000 during a 90 day marketing period. If the sales price is $600,000, the listing fee will be $18,000 at 3% and $15,000 at 2.5%.
If the agent is on a high split of, say, 80% then the broker will take anywhere between $3,000 and $3,600. Uncle Sam will take another $5,000, more or less.
Is the Realtor really making that much money at 6%?

Exposure doesn't mean left out in the cold!

2005-05-19T16:55:00.000-07:00

It's amazing to me that some agents and/or real estate companies can convince a seller that it is in the sellers best interest to NOT fully expose their home to the marketplace. Nobody really knows how much anything is worth - not the seller, not the broker, not the appraiser, not the lender. There is a concept that if the broker brings the seller full price, the seller is happy. Would the seller be happier if he/she received more money?

High school economics 101 taught us that value is created by supply, demand, and purchasing power. The news media tells us every day that we are experiencing a shortage of supply - in fact, the housing supply is currently less than 2 weeks (if no new homes became available, the existing inventory would be depleted in less than 2 weeks). The demand is at a ridiculous high with buyers competing in multiple offer scenarios and paying bunches over list prices. And, interest rates are near an all time low.

It's imperative that a seller fully expose his/her home to the market, period. It's crucial that the seller allow time for the broker to submit the listing to multiple listing, to post it to the internet, to have at least one open house - so that buyers may see it.

Let the market forces take hold.

Realtors have a fiduciary responsibility to do the best job possible for their client. A brokerage that keeps a listing in house is more interested in their bottom line than they are in the client's well being. Telling the owner that he will save 1% on fees is nothing compared to the added value that the seller may obtain through full exposure.

Buy first? Sell first?

2005-05-16T20:45:00.000-07:00

You've got lots of equity due to the recent real estate boom and it's time to cash in, get that tax free half mil, and buy the next dream home. Is it better to sell the old home first or buy the new home first? Do you have the ability to make a choice? How?
It's a seller's market which means that the seller calls the shots. It's easier to sell than it is to buy. In fact, it's not easy to buy - there's a shortage of homes and competition among buyer's is fierce. Buyers often times make offers on several homes before they're successful in winning a contract. Therefore, once you have the new home secured it's a snap to sell the existing home.
OK - how do you buy the new home when all of your money is locked up in equity in the old home?
Equity lines are easy to obtain, there are usually little or no closing costs, and the interest rates are low. Like a credit card, interest is charged on the balance so there's no cost unless you use the line. Beware - lenders won't make equity lines if they know that your home is for sale so get the financing lined up ahead of time!
So here's the drill:

Get approved for an equity line
Get approved for a loan to purchase the new home
Consult with your tax professional to make sure that you've taken into account tax savings on the new home, determined whether or not you have capital gains on the sale of the old home, and find if you might take your old property tax base with you to the new home.
Buy the new home
Sell the old home

You might have double house payments for a month or two but you won't be left behing because your contingent offer is non competitive with other offers and you won't suffer the stress of trying to coordinate that move.

Fitness and Real Estate

2005-05-08T19:17:00.000-07:00

As I sat in my time share in Kauai, drinking a beer and gazing out at the Pacific Ocean, I suddenly felt bloated and fat. It was December 31, 2003 and I decided to do something about it - so I went to my computer and logged on to weighwatchers.com. Seemed like a good plan for the new year.

I was already working out at Renaissance Club Sport and had, in fact, keep fairly busy since I quit smoking in 1977. But there was no method to my madness. I wasn't in bad shape but certainly not in the best of shape. One morning in early 2004 I decided to try a spin class and walked into a more advanced class lead by Myles Murphy. So here's the scene:

Most of the people already knew each other and most wore cycling jerseys and fancy cycling shoes. Some were swapping peddles on bikes with their own hardware and most were talking about events that they had just completed or were getting ready for. My initial reaction was that I must be in the wrong place.

I was hooked.

I started training with Myles via his Mindseye Multisport program. Myles plugged me into spin classes, running, swimming, weight lifting, and stretching. Everything was so scientific with heart rates controlling the work outs. I bought a heart rate monitor. Mild pressure was exerted to get a bicycle and cycling shoes. Diet became a bigger issue. I bought a Trek and started using Cytosport supplements.

Long story short - During 2004 I lost 40 lbs via the combination of weight watchers and exercise!

So how does all of this relate to real estate? I'm not totally sure but I'm beginning to see some connections. Certainly, the importance of goals is a commonality. Discipline, routine, and long hours of practice are important in both areas. I usually put in some time everyday guided by Dr. Murphy's weekly program just as I put in some time everyday performing routine real estate basics that are essential to continued growth and success. Just as Myles has a plan based on knowledge, research, and experience - I have the same plan for success in business. Just as fitness requires preparation, patience, consistently and execution - so does real estate require the same.

The more I worked, the stronger I became. The stronger that I became, the easier it became to work. The habits took hold. The real estate business works the same way - it's tough at first but soon the habits form and the agent becomes stronger.

Oh yeah - I also met a lot of real nice people who have similar interests and habits who have helped me stay focused and motivated. Some have become clients and some have joined me as agents! I'm becoming more confident and willing to try other endeavors - my wife takes me to yoga classes (which are really hard) and I've started working with Louise McMenamin at Absolute Center in Lafayette learning a lot about anatomy, strength training, stretching, and balance. It all goes together.

So you want to sell real estate?

2005-05-06T16:32:00.000-07:00

It's a hot market - right? So it must be easy to make a ton of money selling homes. Nothing to it!

The membership in the Contra Costa Association of Realtors is at an all time high (over 4,000) and it seems like everyone is in the business. Yet, most of the sales are made by a small percentage of agents. Why do so many agents do so poorly or leave the business altogether?

First, the business is a business - which means that one gets to write a check, not get a check. It's expensive to operate with mandatory Association and MLS dues; the need for the latest computers, software, mobile phones, and other electronic gadgets; and the cost of advertising, web sites, and other marketing materials. Don't forget that image is everything so one should be driving an expensive automobile and be wearing the nicest clothes. And because we only get paid when we close escrows, we're required to pay for everything up front with no guarantee that we'll see a return on our investment. Many new agents fail simply because they run out of money before they begin to see results.

Next, one must be self motivated, organized, and driven. There's nobody to tell you what to do, when to be there, or how to do it. In fact, there's no single right way to do anything in the business! These traits usually are not learned - either you have them or you don't.

Of course the business is technically complicated with the zillions of laws, forms, proceedures, governmental regulations, etc. There is a very steep learning curve!

One of the misconceptions about the business is that one must like to look at houses in order to be a good Realtor. I hate to look at houses - it's hard work! Actually, the term "selling real estate" is a misnomer. We don't sell anyone anything - if we find them something that they like, they'll buy it. So, really we're consultants who provide many services to help clients achieve their goals. Our job is to provide our clients with the best customer service, information, and results. If we do well, we may receive referrals and/or repeat business from that client - but perhaps only if we follow up and keep in touch.

I'm sure that I've left important points out and I'll try to add items as I think of them. Please feel free to add your comments!

Oh by the way.... Security Pacific Real Estate trains new agents (and not-so-new agents) to succeed. We've adopted the Brian Buffini 100 Days to Greatness program to help agents earn a living before they run out of money. Additionally, we mentor them to stay in touch with clients and get that referral business.

The State of Summit Ridge

2005-05-05T18:27:00.000-07:00

The siding on our homes needs to be replaced.

This is not a new issue – the Long Range Planning Committee began studying the situation about seven years ago. The committee’s research, at that time, determined that the Association would need to ask for each homeowner to approve an assessment of about $60,000. It was recommended that we seek a $20,000 special assessment and raise the dues 20% per year for at least 5 years. This plan would raise about half of what we would need.

Of course, this wasn’t done – the Board was concerned that a $20,000 assessment would never be approved so the existing $10,000 assessment was proposed and approved. The Board only raised the dues once instead of every year.

So, we’ve contributing $10,000 each (after we make the last installment in July) and we’ve also contributed almost $5,000 more through our monthly assessments. We still need $45,000 more to reach the $60,000 estimate from seven years ago.

Remember, during the past 5+ years we’ve spent millions of dollars on new fences, roofs, skylights, pool related work (bathrooms, pool house, equipment, etc.), landscaping, sidewalks, and other common area maintenance and repair.

So, is it worth it? Will the investment give us a return? What will happen to our real estate values? The $40,000 figure is a lot of money. But, it’s only about 2% – 3% of the value of our homes. The millions that we’ve spent during the past 5 years have most certainly improved the look of our neighborhood which has kept the desirability, and the values high.

Real estate experts project that the median price in our area will continue to rise in the 8% - 10% range each year for several more years. The real concern is more about what would happen if we don’t take care of our business. Demand is predicated upon confidence and perception more than it is finances.

There is nothing worse than the fear of the unknown.

Certainly, some buyers will be put off by a special assessment and there may be a short term negative effect on value. But, long term, the news that there is a plan, and a definitive cost, to resolve the issues will provide the needed confidence to keep demand and values high. Logical buyers will determine that paying 2% more is literally nothing. (The pre-tax cost to finance $40,000 is about $240/month and buyers are often paying 10% - 20% above asking price to secure a contract on a new home.)

Our neighbors ask if we’re better to pay a special assessment or have increased monthly dues. Remember that monthly dues are not tax deductible but that interest on a loan on your home may be. Additionally, high monthly assessments cause a confidence issue and are calculated by lenders in qualifying a buyer for a new loan (which could cause a decline in purchasing power and value). Association borrowing would likely be at a higher interest rate than we as individuals can borrow money so that option is most likely less desirable.

We’re all in this together. The Directors of our Association and the members of all of our committees put in long hours on our behalf to make sure that our homes are attractive, safe, and comfortable. They are also homeowners, just like the rest of us and will be feeling the same pain. I ask that we exercise patience and cooperation during this difficult time and work together to develop a plan that is not only efficient, but pleasing. The siding is leaking and water causes wood to rot. The issue is not going to disappear and the longer that we wait the more money we will need to spend.

Most importantly, if you are truly interested or concerned about how your home will look and how much money that you will spend, contact your Board of Directors and get involved in the process now.

I am David Schubb, a neighbor for 11 years, a Past President, and a Realtor. Please let me know how I may help! You may reach me at 925.765.5055 and david@schubb.com

Welcome!

2005-05-05T17:09:00.000-07:00

Well, this is my first attempt at blogging. Since I'm in the real estate business (for 35+ years!), most of these writings could be about the real estate market in the San Francisco East Bay. But, I'm also interested in baseball (S.F. Giants) and I'm a new cyclist.

I would like to make this blog a resource for those seeking real estate advise or help.

The real estate market continues to sizzle due to a shortage of available properties, a high demand, and low interest rates. Although we're still seeing multiple offers on properties we're also starting to see a few more homes for sale. Broker tour takes longer and often can't be completed in the alloted time. Buyers seem tired of competing and many are opting out. Brokers are beginning to suggest to sellers to look at offers as they come instead of waiting for a week or two to pass.

Could the market be changing?

Visit www.schubb.com for up-to-date Multiple Listing information and other helpful stuff. Let me know what you would like to know about the real estate market, the process of buying/selling, or other real estate related information.