Check it out

If you’re buying or selling real estate in El Dorado County, you should become acquainted with the property information resources available at the county offices. Whenever I am hired to sell a property or representing a buyer with their purchase, I start with a visit to the county offices. Every home has a hidden story and part of that story is filed away in the county’s archives.

The County Tax Assessors Information is usually the first piece of a property puzzle and easily collected on the county’s web site. In addition to the assessed value, I can quickly verify property information such as: size of the property, number of bedrooms, baths, zoning, the previous selling price, the original amount of the recorded mortgages and historical sales information. A last name or property address will produce a plethora of recorded information about any property in the county.

Not all property information can be found on the county’s web site. If the property is serviced by an individual well and septic system, a trip to the Department of Environmental Management is required. For a small fee, county staff will furnish copies of any information that they have on these two important systems.

The location of a well is easily identified when previewing a property but its most critical characteristics require additional scrutiny. Where is the well location in relationship to the septic tank and disposal field? What are the well depth and its production? Has there been a bacteria analysis of the water? The county, prior to 1990, did not always require well drilling permits but well drilling informational filings were a requirement by the state Water Resource Board located in Sacramento. The Board’s information is confidential and even with a property owner’s permission the filing information is difficult to locate.

Currently, the county does not require a well inspection or potable water sample upon the sale of a home but should and probably will in the future. Although regulations have not been implemented, our county’s General Plan requires safe drinking water for all county residents. A well inspection, production flow test and bacteria analysis insures that a property has an adequate water supply and is free from obnoxious microorganisms. Investigating only the past history of the well, however, is no guarantee of its current condition; subsequently, a well inspection should be on every homebuyer’s checklist.

Septic systems in various forms have been around for a few thousand years and 33,000 exist in our county. Like wells, the location of the system, including disposal fields, is important. Over the years, the septic tank location may be forgotten and disposal fields become gardens and pastures. As long as the system is functioning properly, they are mostly forgotten. Disposal areas should remain undisturbed but I frequently discover they are fenced for livestock, driveways cross over them and I have seen barns and other outbuildings built above them.

The county has information on some septic systems dating back to the 1960s. More detailed engineered systems and permits have been a requirement since 1990. Like wells, the county does not require periodic inspection of a septic system or certification upon a sale but every buyer should. The system must first be located, the tank risers or opening exposed and the septic tank pumped prior to a though inspection by a courageous qualified individual.


After collecting any available information on the well and septic, an interested party will want to preview the Department’s soils map. Serpentine is a common green rock common in 44 of 58 counties throughout the state including El Dorado. Our official state rock contains asbestos, a natural mineral fiber used in many commercial applications including insulation and fire protection. Although there are no known state or federal standards for quantifying the potential risk associated with prolonged exposure to naturally occurring asbestos, research has shown that breathing high levels of the fibers isn’t all that healthy. The California Air Resource Board found that most people living in the county are not exposed to significant risks of naturally occurring asbestos but areas located near dusty roads, old quarries or veins of asbestos may have a higher content of the noxious fibers in the air. A quick check of the soils map may help you breath a little easier.

The county has been requiring some type of building permits since 1961. Over the years the permitting process has become more complex, comprehensive and expensive resulting in many homeowners bypassing the permitting process entirely. I once came across an entire house that was built without any permits. Unpermitted barns, decks, workshops and even room additions are not uncommon. When selling a home, sellers need to disclose any unpermitted work but often sellers are not aware of a homes previous history. Fortunately, the County Building Service Department maintains the historical building and permitting records on most homes. In addition to reviewing permitting history, a check of the property file will reveal any outstanding issues such as a notice of non-compliance, expired permits or permits issued but not finalized.

If I am researching a rural property or one with questionable lot lines or easements, a stop at the County Surveyor’s office is in order. The Surveyor’s office reviews all parcel maps, corner records and lot line adjustments. The office also issues “Certificate of Compliance” certifying a parcel of land is in compliance with the Subdivision Map Act and local ordinances.
Performing a thorough property investigation will prevent costly mistakes when making a buying decision. It may be okay to buy a property that has defects and unresolved issues but buyers should know the full story before writing the check.

Adjustable rate tax payer bond

Politicians have been quick to point the finger of distain at the lowly adjustable rate mortgage. How could mortgage brokers and lenders be so callused and greedy as to put borrowers into this financial calamity?

Borrowers were offered an initial low teaser interest rate allowing them to qualify for a home loan. Later the low interest rate would expire and ratchet up, increasing interest payments by hundreds of dollars a month. Adjustable loans were an oncoming train wreck for borrowers. Between 2005 and 2006 one-third of all mortgage loans were adjustable rate loans.

Hillary Clinton has proposed freezing the interest rates on all adjustable mortgages for five years. Many lenders have stopped offering adjustable rate mortgages and 80 different state, federal, and private agencies have been formed over the last year to assist borrowers who have these toxic loans.

But wait a minute. Our elected and appointed county officials also favored the adjustable interest rates over fixed rates and is now costing taxpayer hundreds of thousands of dollars in increased interest payment. Monday, the Sac Bee published a story in their Business Section about a monthly $500,000 increase in a single bond fund. The increase was the result of the interest rate jumping from 6.5 percent to 8.5 percent on a $346 million Sacramento County obligation bond.

The bond is (or was) a popular class of variable rate bonds (another nomenclature for adjustable rate) called auction-rate securities. The interest rate hike has resulted in the county’s monthly interest obligation to climb from $1.77 million to $2.29 million. Where is the outrage? When does the investigation begin? How could our smart elected officials and astute financial managers be so naïve as to finance long-term county obligations with adjustable rate securities? And how many other county bonds were financed with adjustable rate securities? Sacramento’s debt officer, Chris Marx, said of the $500,000 monthly increase in payment “it is within budget parameters.”

Easter New Beginnings

Forty years ago today, I was in Daytona Beach with a few other school buddies. We had taken our quarterly exams at the University of Florida and left Gainesville early, headed for the beach. I owned a 1965 Opal station wagon that would seat six and carry our surfboards tied to the luggage rack.

Thirty years ago this week, I had signed the a contract with Century 21 Real Estate Corporation to acquire the first Century 21 real estate franchise for the state of Alaska. Century 21 pioneered the real estate franchise concept in Southern California. At the time there were no franchises in Alaska but I thought the concept of a national affiliation was worth the investment. Within 5 years Century 21 had 7,000 real estate offices in the US and Canada and between 1981 and 1985 our office was the top producing sales office in the country.

Twenty years ago I was in negotiations to sell my Independent real estate and financial services corporation. At the time we had six offices and 200 agents and employees. I was also involved in commercial and land development, served as Vice Chairman of the Alaska Real Estate Commission and Vice Chairman of the Alaska Housing Finance Commission.

In the spring of 1998, Vicki and I completed the sale of our interest in a small mortgage bank in Rancho Cordova and we decided to work from our home in Pilot Hill. Vicki is still making pottery that is featured in several galleries and gift shops in the foothills and I continue my small individual practice of real estate and mortgage loans. We have no idea where the path of life will take us but eagerly look forward to the many twists and turns along the way. Spring is an exciting time of the year and we wish you and your family a Happy Easter and wonderful new beginnings.

Employment up for January

Last month I chastised the Sac Bee for sensationalizing the California jobs report for January. Their front-page (above the fold) weekday story had to do with the disappearance of 29,000 jobs for the month. The writer’s slant was: jobs would continue to disappear, unemployment would continue to rise, the sate was in a recession and our economy was on the verge of collapsing. It was all a little too much subjective hyperbole (should normally be located on the editorial page) for what should have been an objective reporting of the facts.

Jobs traditionally are off in January as they are traditionally up in December. Many seasonal temporary employees are hired in December and discharged in January. I further pointed out that the employment number would look better the next month and when they picked up, the favorable news would be reported some other place than a front page cover story.

I was not disappointed when the Bee in their Section D on Saturday (slowest readership day of the week) reported 25,600 jobs were created in February according to the Employment Development Department. The state’s unemployment rate fell to 5.7 percent. The Sacramento Region gained 3,000 jobs and unemployment also fell to 6.2 percent. Employment gains were reported in 8 of the 11 major economic sectors including construction. Our economy is certainly not as rosy as it was a year ago. We still have some tough times ahead in the financial, real estate and construction sectors. The economy passes through normal economic cycles and it is important to keep all things in proper perspective. If the loss of jobs in January merits front-page weekday headlines shouldn’t the addition of 25,000 jobs in the short month of February get the same attention.

National sales increase for month

We don't want to overplay the significance of this, but we actually got some positive economic news this week: Sales of existing homes last month rose for the first time in half a year, adding fresh evidence that the housing cycle may finally be bottoming out after nearly three years of correction.

The national gains in resales announced on Monday were not huge 2.8 percent for single family homes and 3.7 percent for condominiums. Total sales hit 5.03 million units, though Wall Street economists had predicted another DECLINE to a consensus estimate of around 4.8 million units. So breaking the 5 million mark is pretty good, given where we are in the overall economy.
Now in fairness, the latest sales gains were accompanied by a decline in the national median price of homes sold down by 8.2 percent from year-earlier numbers. You might think an 8 percent drop in prices is terrible. But let's face it: The only way we're going to burn off that 10-month overhang of unsold houses on the market is through more affordable, more realistic prices pulling buyers off the sidelines.

There's another factor at work pulling down the national median number: Relatively more houses are selling in places like Texas, North Carolina and Utah, where prices are moderate and affordable, while there are relatively fewer sales in ultra-high-cost California. So the median price may be lower, but it's not just because home values across the country are crashing. The mix is different, so the median price is a lower number.

Low-cost mortgage money is also definitely helping to fire up sales. Average 30-year rates declined to 5.875 percent last week -- and any time mortgage money is under 6 percent, you're going to see more homebuying.

By the way, sales in California, which have been a leaden weight dragging down national market numbers for more than a year, are likely to improve in the coming months as the new "super-jumbo" FHA, Fannie Mae and Freddie Mac mortgages start hitting the street.
FHA's mortgages should be especially popular in California, where the median home price in some local areas like San Francisco exceeds $700,000. Thanks to FHA's low 3 percent minimum downpayment requirement, Californians should be able to buy a $700,000 house with just $21,000 down -- and walk away with a 6.5 percent 30-year fixed rate. Fannie Mae and Freddie Mac, by contrast, want a minimum 10 percent down for their new jumbos. So let's take our good news about sales and interest rates … and look to better days as the Spring buying season kicks off.

Californina sales drop in February

Home sales decreased 28.5 percent in February in California compared with the same period a year ago, while the median price of an existing home fell 26.2 percent, C.A.R. reported Monday.The median price of an existing, single-family detached home in California during February 2008 was $409,240, a 26.2 percent decrease from the revised $554,280 median for February 2007, C.A.R. reported. The February 2008 median price fell 4.8 percent compared with January's revised $429,790 median price."Although sales rose for the fourth straight month in February by 9.5 percent compared to the previous month, they continue to be dragged down by the ongoing effects of both the credit/liquidity crunch and tighter underwriting standards that have reduced the pool of qualified buyers who can obtain a loan," said C.A.R. President William E. Brown.