Buyers Guide

Bay Area Buyer’s Guide CONNECTING. ELEVATING. INSPIRING. ELENA LICARI, REALTOR® | C. 650.868.0069 | O. 408.355.1510 | [email protected] | elenalicari.com CalRE #02031413 | 410 N. Santa Cruz Avenue | Los Gatos, CA 95030

INTRO & BEFORE YOU START The San Francisco Bay Area is one of the most desirable real estate markets in the world, and we understand that navigating the property buying process can seem challenging. The expertise and breadth of knowledge of your Coldwell Banker Realty agent ensure you are in the most trusted hands. Elena Licari and her team will guide and advise you during every step of the buying process to help you find the perfect home that fits your needs, budget and lifestyle. Before we start your home search, here are some preliminary questions: 1. What is your price range? 2. W hat type of property are you looking for? (single-family home, condo, TIC) 3. Do you have any preferred neighborhoods? 4. Do you have pets? 5. Do you have children? 6. Is proximity to public transportation an important factor? 7. W hat amenities are most important to you? (parking, yard, etc.)

MEET ELENA LICARI REALTOR® | CalRE #02031413 C. 650.868.0069 | O. 408.355.1510 Elena Licari brings a unique perspective to real estate with 14+ years of [email protected] | elenalicari.com experience as a San Jose firefighter and a passion for the business that sparked when she met her husband, a Bay Area builder. Her creative 410 N. Santa Cruz Avenue strategies, vigorous negotiation skills and 360-degree understanding of Los Gatos, CA 95030 the market put her in the very top 1% of 1.4 million agents nationwide for 2020 sales volume, per The Wall Street Journal’s RealTrends. @ELENALICARI As a firefighter, Elena fell in love with helping people and learned to guide others through high-stress situations. The stakes are different in real estate, but the lessons still apply as she coaches people through life- changing buying and selling decisions. Elena taps into the analytical and emotional sides of real estate to put each client in a position to win. Buying a home starts with a vision meeting. Elena takes more time in the beginning of the process, which ultimately gets you to your future faster, uncovering the dream and working backwards to make it happen. Using time-tested techniques, she’ll align with your vision and show you homes on streets in neighborhoods that live up to that dream. She’s an expert at finding off-market opportunities and believes the house-hunting process can and should be a fun adventure. Elena’s husband has been in the construction business for over 25 years, and together they’ve designed several of their own custom homes. Through this hands-on process, she has established relationships with architects, subcontractors and builders and become familiar with city processes. Most people walk into a home and want to talk about the possibilities. Elena can ballpark what’s possible on the spot and then get you concrete answers from the right people — an advantage for timely offers. Selling a home with Elena means tapping into the latest technology, custom market reports and a team of marketing specialists to get the highest price possible. Premium collateral includes custom websites and community videos to target the right buyers. She’ll get more people into the home, which means competitive offers for the seller. Elena grew up in San Mateo County and currently lives in Los Gatos. She’s passionate about health and fitness and is a lifelong learner, whether through a seminar on emotional intelligence, a negotiation workshop or her membership with the Lorna Hines Academy. Elena speaks Russian, rides dirt bikes, hikes, skis, wakeboards and has a general love for the outdoors. Community and lifestyle are part of buying and selling real estate, just as much as the house or property itself. Elena considers all these factors as she takes each client on the journey from real estate dreams to “we just closed!”

HOW TO BUY A HOME 1. 4. 7. INITIAL CONSULTATION IDENTIFY PROPERTY FINAL WALK-THROUGH AND REVIEW DISCLOSURE WITH YOUR AGENT Reach out to your Coldwell Banker PACKAGE A final walk-through ensures that Realty agent; define your priorities the property's condition hasn't and time-frame. They will work Once you have selected a property, changed since your last visit and as your advocates and trusted you are ready to write an offer. Your that the terms of your contract advisors to help guide your search. Coldwell Banker Realty agent is will be met. well versed in the local real estate 2. contracts and terms, as well as 8. disclosure obligations by the seller. GET PRE-APPROVED CLOSING OF ESCROW 5. Congratulations, you are now Before beginning your search, your a home owner! first step is to get pre-approved for NEGOTIATE AND a mortgage loan (unless you will be WRITE AN OFFER paying in cash for the full price of your home). Your Coldwell Banker Your offer is a non-binding Realty agent can connect you to agreement to pay a certain price a mortgage advisor. Based on for the home. If your offer is lower your income and credit history, the than the list price, the seller will mortgage advisor will determine likely return with a counteroffer, how much a bank will lend you, which you can choose to accept, which will help you determine the reject or counter. Your Coldwell price range for your search. Banker Realty agent will advise on pricing throughout the process. 3. 6. VISIT PROPERTIES DUE DILIGENCE Attend viewings and open houses spanning a range of areas and During the escrow process, you property types. Now is the time will have an opportunity to inspect to consider your ideal location the property, review homeowner’s and amenities. Ask your Coldwell association documents, select Banker Realty agent about new home insurance coverage, and off-market opportunities. submit to escrow and remove contingencies.

FINANCING YOUR PURCHASE Loan Pre-Approval The Home Loan Process What NOT to do when Applying for a Home Loan The Underwriter Reviews Your Loan Components of a Mortgage How do Lenders Qualify Buyers?

LOAN PRE-APPROVAL Pre-approval is different from pre-qualifying, as it is a full loan approval instead of an opinion letter. It is recommended to get pre-approval before looking at homes. Finding out what you qualify for will help you look in the right price range. Determining the Right Price Range Pre-Approval for a Loan The first step in buying a house is to determine the An offer is given greater consideration by a seller if it is price range that is right for you. You will need to accompanied by a pre-approval letter from a reputable consider how much you are prepared to invest in your lender or a local mortgage broker. This assures the home and how much you will need to borrow. You seller that you will be able to obtain the proposed should also consider how much property taxes and financing and will not tie up the property needlessly. insurance will add to your monthly mortgage payment. Lenders will inquire about the following Determining Amount of Cash You Will Need six critical factors: You will need enough cash to cover both your down payment and any closing costs associated with the 1. Income purchase. Closing costs vary significantly based on 2. Savings/capital/investments the terms of your loan but are generally 1% to 2% of 3. Credit history the purchase price. 4. Debt level/ratio 5. Employment history Determining Additional Costs 6. The value of the property you wish to purchase Your Coldwell Banker Realty agent will help estimate your purchasing power and your carrying costs, but it is highly recommended that you discuss your cash needs and tax ramifications with an accountant and/or financial advisor.

HOME LOAN PROCESS PREPARATION Loan Application Credit Report Pre-Approval Loan with Supporting Issued Options Documentation PROPERTY SEARCH Property Offer Accepted Loan Lender Search Submission Underwriting Begins to Lender Begins ESCROW PERIOD Conditional Final Approval Loan Docs Loan Docs Approval Given Given by Lender Sent From Recorded/ Purchase by Lender Lender Closes

WHAT NOT DO WHEN APPLYING FOR A HOME LOAN Below is a list of things to steer clear of when seeking to obtain financing for a home. They may be detrimental when trying to move forward with the loan process. DON’T buy or lease an auto before you apply DON’T buy new furniture or major appliances for a home loan. for your new home. Lenders look carefully at your debt-to-income ratio. If the new purchases increase the amount of debt A large payment such as a car lease or purchase you are responsible for, this may disqualify you from can greatly impact those ratios and prevent you from getting the loan, or cut down on the available funds qualifying for a home loan. you need to meet the closing costs. DON’T move assets from one bank account DON’T run a credit report on yourself. to another. This will show as an inquiry on your lender’s credit report. Inquiries must be explained in writing. These transfers show up as new deposits and complicate the application process, as you must then DON’T attempt to consolidate bills before disclose and document the source of funds for each speaking with your lender. new account. The lender can verify each account as it The lender can advise you if this needs to be done. currently exists. You can consolidate your accounts later if you need to. DON’T pack or ship information needed for the loan application. DON’T change jobs. Important paperwork such as W-2 forms, divorce decrees and tax returns should not be sent with A new job may involve a probation period, which must your household goods. Duplicate copies take be satisfied before income from the new job can be weeks to obtain and could stall the closing date considered for qualifying purposes. on your transaction.

THE UNDERWRITER REVIEWS YOUR LOAN 1. 3. 5. CREDIT INCOME AND RATIOS PROPERTY It is important that credit has been Your gross monthly income The property is the security for established with a good payment (before taxes) is computed. the loan. The lender will require history. Any derogatory credit Bonuses, overtime, part-time an appraisal by a certified fee must have a good explanation. or self-employment income is appraiser to assure that there is Outstanding collection accounts, averaged over the last two years. sufficient collateral. The underwriter judgments or liens must be paid The principle, interest, taxes and will review the appraisal to verify through escrow. The credit report insurance, or PITI, on the new the marketability, condition and will also list a credit score – a loan (plus mortgage insurance, if value of your home. The lender mathematical calculation of your applicable) is divided by the gross will also review the title report overall credit rating. monthly income to get the “top” and require title insurance on the ratio. PITI and all debts are divided property for your protection as well 2. by the income to get the as theirs. “bottom” ratio. JOB STABILITY *If you don’t fall within these Ratios are ideally 33 over 38 for guidelines, don’t panic! Lenders A consistent job history with the an 80% loan and lower for a can work with a variety same company is ideal; however, 90%, 95% or 97% loan. If other of circumstances. if changes have been made for components are strong, higher advancement, it is acceptable. ratios may be permitted. Schooling completed in preparation for a specific vocation is considered (PITI / Gross Monthly income = Top part of your job history. Ratio) (PITI & Total Debt / Gross Monthly Income = Bottom Ratio) 4. DOWN PAYMENT, CLOSING COSTS AND CASH RESERVES To be considered, your funds must have been verified as having been yours for three months. A 5% minimum down payment MUST be from your own funds; however, the remainder of the down payment, closing costs and the two to three months of reserves may be gifted by a relative who provides a letter and bank statement showing the ability to give.

COMPONENTS OF A MORTAGE P.I.T.I. Principle, Interest, Taxes and Insurance Insurance Homeowner’s Insurance, Mortgage Insurance, Homeowner’s Dues Formula 1 Purchase price x 1.25% = Monthly Property Taxes 12 months Formula for Property Taxes in Alameda County/Contra Costa County: Formula 2 Loan Amount x 0.35% = Monthly Homeowners Formula for Homeowners Insurance:

HOW DO LENDERS QUALIFY BORROWERS? Income Assets/ Debt Credit Debt Reserves (FICO Score) Ratio Income $200,000 / $16,667 per month Total monthly payments on installment+ revolving debt Proposed Monthly Housing Expenses: P urchase Price: $1,250,000 Loan Amount: $1,000,000 D own Payment: $250,000 3 0-yr fixed interest-only payment: @3.875%: 4,702.37 Taxes per month: $1,302.08 H OA Dues (or hazard insurance): $500.00 T otal monthly payment (PITI): $6,504.45 Monthly Debt Payments: $400.00 Total Debt Service: $6,904.45 Housing-to-income ratio 39%

THE BUYING PROCESS Property Types Flow of a Real Estate Transaction Disclosures Making the Offer Escrow

PROPERTY TYPES Single Family Home: A single-family home (often abbreviated SFH), house or dwelling is a free-standing residential building that is maintained as a single-dwelling unit. Even if the dwelling unit shares one or more walls with another unit, it is considered a single-family home if it has direct access to a street and does not share heating facilities/equipment, water equipment or any other essential facility or service. Condo: A condominium is usually attached housing, where the buyers/owners of each unit own their individual unit and a portion of the private land that the building sits on, as well as any amenities. All condominium buildings have associations (often referred to as homeowner associations) that govern/ oversee the policies of the condominium building as a whole, allocate expenses for maintenance and collect the homeowner association fees. Co-Op: Co-operative (Co-Op) housing is the form of ownership in which the whole property is owned by a co-operation and then sold as shares to the individual buyers/owners of the community. Co-operative housing typically shares the costs of upkeep and maintenance and shares amenities across all its members. Tenancy In Common (TIC): In a TIC, a building is owned by a TIC group in percentage shares, including the rights to occupy a particular unit. Each owner has a distinct, separately transferrable interest in the building as a whole. All areas of the property are owned equally by the group; therefore, an individual may not claim ownership of a specific part of the property.

FLOW OF A REAL ESTATE TRANSACTION

DISCLOSURES In the Bay Area, it’s typical for the listing agent to provide a general disclosure package to all serious buyers. This is your opportunity to review general information about the property prior to writing an offer. It is required that the sellers and agent disclose everything they know about the property and that you are aware of anything that might affect your decision to purchase the property. Real Estate Transfer Disclosure Statement Natural Hazard Zone Disclosure (RETDS), Seller Property Questionnaire (Property ID or JCP Report) This report gives you all information about how the These two disclosures are questionnaires about the property might by affected by a natural hazard, such condition of the property and neighborhood. as earthquake, wildfire, tsunami, flood, etc. based on its specific location. Preliminary Title Report Agent’s Visual Inspection Disclosure Provided by the title company, this report gives Each agent will conduct a visual inspection you information about the sellers. of the property to identify red flags. Pest Inspection Report Conditions, covenants and restrictions commonly referred to as CC&Rs Sometimes referred to as a “Termite Report,” it examines all types of insect and fungus damage Home Owners Association (HOA) Meeting (Section 1) as well as conditions that could lead to Minutes for the last 12 months damage (Section 2). This inspection is performed by a specially licensed contractor who must inspect HOA Budget and Budget Reserve Study properties according to criteria established by the (if it’s a larger building) State Board of Pest Inspection. Condominium Certification Form Home Inspection House Rules/Misc. Communication A home inspection will check the overall condition of the home from the foundation to the roof, including electrical, plumbing and heating, the basic structure, as well as the quality of the finish work. Other recommended inspections may include structural engineering, soil conditions, fireplace and furnace. The inspection period is useful for obtaining estimates for repairs and improvements you plan to make later.

MAKING THE OFFER Q: What is a good offer? Q: What is the counteroffer? How does it work? A: A good offer depends on multiple factors: the A: When you submit an offer, the seller has four choices: market, the neighborhood, the seller needs and the list price. It is your agent’s job to provide you with the 1. They can ACCEPT it as written, and you are best information on these factors to help you make a ratified—meaning you are “in contract” to buy it. decision. Is the list price low or high compared to the market? Is your offer the only one on the table 2. T hey can REJECT it. or are there several you are up against? Are properties in general selling above or below asking 3. 3. They can offer you a “BACK-UP” position — in in the neighborhood? the case that they have accepted another offer, this will put you in first position to ratify if the first Q: How do you win in a multiple-bid situation? offer cancels or falls through. A: Primarily by understanding the strategy and 4. 4. They can COUNTER your offer. They can motivation of the sellers. It is important to know counter you on the purchase price, the length of how many other offers are on the table, the state escrow, contingency periods or any other terms. of the market and the goals of the seller. An offer is Once you receive their counter, you can then 1) more than a purchase price – a good offer is drafted Accept 2) Reject or 3) Counter their counter. This carefully with overall terms that will appeal to the seller. can go back and forth many times until both sides come to an agreement. As soon as one party agrees to the other’s counter, you are ratified. Q: Is it beneficial to provide a personal letter or Q: What is a Multiple Counter Offer? enclose photos, etc. with the offer? A: If a seller receives more than one offer, they can A: Absolutely. Sellers want to know who is buying counter all of them or a select few. In this scenario, the their house. Whether you are buying from a developer offer is not ratified when you respond to their counter. or normal seller, a good solid offer package with a The seller has the final say; therefore, you are not personalized cover letter shows that you are serious ratified until the seller accepts your counter. and passionate. Q: How long will it take for me to hear if I/ we got it? A: We generally give 24 hours for the seller to respond. In some cases the seller requests more time but usually no more than a couple days. In the case of a short sale or REO, it can take weeks or months to hear back from the bank.

ESCROW Escrow: What is it? How Does Escrow Work? How Long Does Escrow Last? Escrow is the period of time The principals to the escrow — This is determined on a case-by- between your offer being accepted buyer, seller, lender, agents — case basis and will be written into and your purchase being finalized. cause escrow instructions, most the offer. Generally, 30 days is Escrow is a deposit of funds, a usually in writing, to be created, common. However, in some cases, deed or other instrument by one signed and delivered to the escrow you (or the seller) may need more party for the delivery to another officer. If a broker is involved, he time. In some cases, it is shorter, party upon completion of a or she will normally provide the for example with an all-cash deal. particular condition or event. escrow officer with the information necessary for the preparation Who Chooses the Escrow? Why Do I Need an Escrow? of your escrow instructions and documents. The escrow officer will In the Bay Area, it is usually the Whether you are the buyer, process the escrow, in accordance buyer’s choice, as the buyer pays seller, lender or borrower, you with the escrow instructions, and the escrow fees. The selection want assurance that no funds when all conditions required in the of the escrow holder is normally or property will change hands escrow can be met or achieved, done by agreement between the until ALL of the instructions in the the escrow will be “closed.” The principals. If a real estate broker transaction have been followed. duties of an escrow holder include is involved in the transaction, the The escrow holder has the following the instructions given broker may recommend an escrow obligation to safeguard the funds by the principals and parties holder. However, it is the right of and/or documents while they are to the transaction in a timely the principals to use an escrow in the possession of the escrow manner; handling the funds and/ holder who is competent and who holder, and to disburse funds or documents in accordance is experienced in handling the type and/or convey title only when all with the instruction; paying all of escrow at hand. There are laws provisions of the escrow have been bills as authorized; responding that prohibit the payment of referral complied with. The escrow officer to authorized requests from the fees; this affords the consumer is a neutral third party and does principals; closing the escrow the best possible escrow services not represent any one party. Your only when all terms and funds are without any compromise caused by title company will provide you with in accordance with instructions a person receiving a referral fee a preliminary title report for the and provide an accounting of buyer to be made aware of any that in the Closing or Settlement encumbrances on the property. Statement. The escrow officer can Your title company also provides ONLY take instructions from all title insurance to ensure delivery parties in agreement. No one party of clean title. in the transaction can solely give instructions. The escrow officer does not represent any one party — they are a neutral third party in the transaction.

What happens during escrow? The escrow period gives all parties involved the time needed to comply with the terms of the offer and prepare to transfer title from the seller to the buyer. During this period, you do several things, all of which your agent will help you with: 1. You put down a refundable deposit of 3% of the purchase price, which is held by the title company. 2. Your lender processes your loan and will ask you for various information needed to approve you. 3. Y ou review and sign disclosures. 4. You do your due diligence on the property and remove your contingencies by the deadlines you requested in your offer. 5. You have any inspections you wrote into your offer done. 6. The lender orders an appraisal for the property. 7. Y ou sign all loan and title documents when they are ready. 8. C losing happens a couple days after you sign documents.

RESOURCES Bay Area Real Estate Websites

BAY AREA REAL ESTATE WEBSITES Coldwell Banker Realty CCAR MLS Crime Mapping coldwellbanker.com ccartoday.com crimemapping.com San Francisco Board of Bridge MLS Great School REALTORS® (official MLS site) ebrdmls.com greatschool.org sfrealtors.com Easy to use, easy to navigate. Up to Socket Site Great source for information on the minute – real time information socketsite.com nearby schools. on listings. Plug into SF real estate tips, trends San Francisco Government Bareis MLS (North Bay MLS) bareis.com and the local scoop. sfgov.org SILVAR (Silicon Valley MLS) Goldstein, Gellman, Melbostad, A great resource to use when looking silvar.org Gibson & Harris, LLP for city services, resources within g3mh.com your district, paying property taxes or Calaveras County (CCAR) A firm that specializes in real estate. getting your dog’s license. calaverasrealtors.com Curbed San Francisco Department of Marin Association of REALTORS® curbed.com Building Inspection marincountyrealtors.com sfdbi.org Bay East MLS A neighborhood and real estate DBI is the regulatory safety agency for bayeast.org weblog covering the greater New San Francisco buildings. Check here York, Los Angeles and San Francisco for permit information. areas. Walkscore walkscore.com Great source for quickly accessing what is nearby. Not intended as a solicitation if your property is already listed by another broker. Affiliated real estate agents are independent contractor sales associates, not employees. ©2022 Coldwell Banker. All Rights Reserved. Coldwell Banker and the Coldwell Banker logos are trademarks of Coldwell Banker Real Estate LLC. The Coldwell Banker® System is comprised of company owned offices which are owned by a subsidiary of Realogy Brokerage Group LLC and franchised offices which are independently owned and operated. The Coldwell Banker System fully supports the principles of the Fair Housing Act and the Equal Opportunity Act. 227F9M-DC_SF_2/22

FIRE/DISASTER PREPAREDNESS AND INSURANCE TIPS FOR HOMEOWNERS Don’t wait until it’s too late! In light of my in-laws’ recent loss during the Tubbs Fire in Sonoma County, and as a firefighter/engineer and real estate agent, I felt compelled to write this newsletter to help others prepare for the unthinkable. Thoroughly Review Your Insurance Policy: - Find out what your predetermined price-per-square-foot rebuild price is. - E valuate and ask yourself, “Is this price per square foot enough to rebuild in my area?” Oftentimes, prices are determined by outside area averages and not by what is really happening in the Bay Area. - M ake sure your personal contents policy is sufficient. (This value is separate from the dollar amount you get for the structure rebuild!) - F ind out if your vehicles, motorcycles, boats, guards and/or detached shop areas (and tools) are covered. - F ind out how much you have to set aside for debris clean up. Remember: Hazardous materials, asbestos, lead and other toxic materials must be cleaned up by special contractors, and all of this costs extra money to dispose of. - Ensure you periodically update your policy when you add on square footage or renovate your home to make sure your policy reflects this.

FIRE PREVENTION ACTIVITIES Make sure you have adequate clearance Document what you own: around your home This means at least 30 feet of defensible space around We found DropBox (dropbox.com) to be the best your home of flammable vegetation. Cut back trees platform for storing things immediately on your and shrubbery as these increase your fire exposure phone/ computer and acting like a “safety net.” Start and hazard rate. Trim tree limbs so that you have 10 a receipts folder in your DropBox and immediately feet clearance from your roofline and chimneys. scan receipts when you get them. This could save you thousands if you ever have to prove the value or Cover chimney outlets or flues with ½’ ownership of any items after an emergency such mesh spark arrestor as a fire! If you live in a rural area, make access to your - T ake a quick video of your home and all your home easy for the fire department (gates, lock important valuable contents, and then upload the boxes, etc.) video to your iCloud or DropBox. Ensure address numbers are at least 4” tall and clearly visible from the street. If you have a long - D on’t forget to take photos of all your big-ticket driveway, post the address from the street. Remove items (along with serial numbers, if they’re available). unnecessary flammable things around your house that increase your fire load. If you have a wood shake roof, - S how the date and price you purchased your items, consider replacing it with a composition roof or other as insurance companies will depreciate your items material that is less flammable. based on when you bought them. Proving the item’s cost when you purchased it can really help you Many fires start when embers make contact with a recover the maximum dollar amount. wood shake roof or other highly flammable materials around your home, causing your entire home to - If you have a shop or garage, make sure you take catch fire. videos and photos and document your tools/ automotive parts as these can add up. Some of our Biggest Learnings Family photos: Scan and upload them to the cloud or to DropBox! Sadly, my in-laws only uploaded a few, and all their older pictures were lost. Upload all your important documents to DropBox or something similar. If you own a safe, remember not all safes are really fire resistant. Consider leaving items in a bank safety deposit box as an option. Thank you for taking the time to read my learnings and experiences in light of recent events. Call, text or email me with any real estate or safety questions — I’m happy to help!

ELENA LICARI, REALTOR® | C. 650.868.0069 | O. 408.355.1510 | [email protected] | elenalicari.com | CalRE #02031413

Bay Area Buyer’s Guide CONNECTING. ELEVATING. INSPIRING. ELENA LICARI, REALTOR® | C. 650.868.0069 | O. 408.355.1510 | [email protected] | elenalicari.com CalRE #02031413 | 410 N. Santa Cruz Avenue | Los Gatos, CA 95030