Archive for the ‘General’ Category


 | Comments Off on WHEN TO BUY?

English: Christmas postcard picture with Santa...

English: Christmas postcard picture with Santa Claus and holly, with message, “I bring you a Merry Xmas from” (Photo credit: Wikipedia)

The answer is simple but counter intuitive.

Between Thanksgiving and Xmas.


The First Thanksgiving, painting by Jean Louis...

The First Thanksgiving, painting by Jean Louis Gerome Ferris (Photo credit: Wikipedia)

Because. There is less competition. Fewer potential Buyers are active during this extended holiday period.

Because. There are fewer properties for sale but they are all highly motivated. No-one would want strangers wandering through their homes at this time.

Because. Sellers will be concerned when there are few showings due to fewer Buyers, and will be more willing to negotiate.


 | Comments Off on FICO TRUTHS

FICO logo

FICO logo (Photo credit: Wikipedia)

Whenever you apply for Credit for any of the 5 standard purposes the Lender will require a FICO report. This will be different for each category:

1. Mortgage – Most complete.

2. Auto – Next most complete.

3. Credit Card – Next most complete.

4.Personal loans – Next most complete.

5. Installment loans – Least complete.

Each will give a different FICO Score, Lowest for a mortgage, and highest for the Installment loan.

DO NOT CONFUSE ANY OF THESE WITH THE “FREE” Credit Reports you can get from all 3 of the major Credit Bureaus (EQUIFAX, EXPERIAN and TRANS UNION).

THESE ARE NOT FICO REPORTS and are of no practical use to anyone but you.

Factors contributing to someone's credit score...

Factors contributing to someone’s credit score, for Credit score (United States). (Photo credit: Wikipedia)


 | Comments Off on GOODBYE API


As most of us know the badly designed API system has been scrapped and at this time there is no replacement other than a totally stupid temporary process which can serve no purpose other than confusion.  This will produce a score for 2014 based on the average of the prior 3 years (2011, 1012, and 2013).

As the scores for each of these increased each year, it’s obvious that an average will be lower than the actual score for the latest year.

A typical parent is going to see that the score for 2014 was lower than 2013 and assume the school is going downhill.  WRONG.

To get a better feel for reality the parent should review the actual scores for the last 3 API years (2011/12/13), and if they show steady improvement it’s reasonable to assume that trend will continue.

Additional information is available from but, like the API method its scoring methodology is very simplistic and the user should read the guidelines for using its results and follow the advice they give.

MY ADVICE! Check out whatever scoring methods are available but assume that’s no more than 25% of the things you should do when evaluating a school. The rest, and most important activities, should be:

1.  Your personal visit to the school. They will welcome you with open arms.

2. Talking to parents in the area of the school.

NOTE: The final API replacement will be some variation of the Common Core Syllabus sponsored by the Federal Government. For the foreseeable future the details of this will be fought out by State and Federal politicians. It all reminds me of the description of a Camel as “A horse designed by a committee”.



Ohlone/Chynoweth–Almaden (VTA)

Ohlone/Chynoweth–Almaden (VTA) (Photo credit: Wikipedia)



For about 3 years we have suffered through the craziest Real Estate Market I have seen in the 25 years I been a Broker here in Silicon Valley. During much of this period properties would be Listed Wed, Open House Sat and Sun, offers accepted Tue/Wed and Sold by Thu, after an average of 24 offers (the record I know of  was 79 offers on a nice 3 bed, 2 bath in South San Jose). This drove prices up a a ridiculous rate.

This was the inevitable result of a wave of overseas investors stocking up on “Cheap” California Real Estate, a surge of well qualified 1st time buyers, and historically low interest rates.

This excess of Buyers (DEMAND) led to a shortage of properties for sale (SUPPLY)

There are 3 significant results of this great Sellers Market:

1. The virtual disappearance of SHORT SALES, and REO (Foreclosure) properties for sale. The rising prices have rescued many homeowners from the UPSIDE DOWN (Negative Equity) situation they had fallen into.

2. A restoration of the Laws of SUPPLY and DEMAND. Over the past 7 years many people were forced to postpone their retirements when most of their Home Equity vanished, and they had to hunker down till the market improved. The rising prices are  allowing them to restart their long term plans to retire and move out of the area.

3. A significant number of MOVE UP BUYERS who got stuck in small houses despite the arrival of small children are now able to get prices which allow them to move up to a more suitable house. They are selling to  buyers who are helped by the huge number of special FIRST TIME BUYER PROGRAMS now available from  City, County, State, and Federal sources. These are greatly enhanced by the fantastic interest rates.

Now here we are in early 2015 and things have returned to something close to normality with inventory for sale, and ready and qualified Buyers pretty much in balance in most of the valley. The exception to this is in those areas with the top rated schools where the boom times are still hot although on a lesser scale.



 | Comments Off on FICO IS BROKEN.

FICO logo

FICO logo (Photo credit: Wikipedia)




It’s time to tame the FICO god to which the Dinosaurs of FANNIE MAE and FREDDY MAC  bow down, and at whose bidding the American mortgage industry has been tied up by silver ropes.

While I still hold the mortgage lenders greatly to blame for the financial misery of the last 7 years, I also accept their strong desire to make more and better loans now. However they are prevented from doing so by the restrictions required by the industry Overlords (FANNIE and FREDDY).

No matter your politics, our current mortgage system requires a Secondary Market Maker such as we already have with FANNIE and FREDDY. For the vast majority of cases If Bank “A” gives you a mortgage it is planning to sell it to one of these 2 entities.  They in turn will package it along with thousands loans more loans and sell them on to an Institutional investor (i.e. a Pension management Company) to become part of their long term portfolio.

The money they gave to Bank “A” is now available to make another mortgage for another QUALIFIED buyer NOTE the term QUALIFIED because this is where FICO comes into the story.

FANNIE and FREDDY will only buy the BANK “A” mortgage if it meets their qualifying guidelines. One of the most important is a sufficiently high FICO score.  Effectively this means they cannot make a mortgage loan to someone whose credit is excellent but is not reflected as such due to the out of date structures of the FICO score Providers, EQUIFAX, EPERIAN, and TRANSUNION.

These procedures go back to the 1980’s and simply do not reflect today’s society. Their inability to allow for alternate ways to measure financial stability (income self employed and Individual Contractors), Behavioral history, and other liquid assets means that approximately 25% of all qualified potential buyer are unable to get a mortgage. The Banks would love to be able to serve them but without an acceptable FICO score cannot do so.

We desperately need to bring FICO up to date and incorporate it in a Mark 2 version to include some of the other accredited Fair Credit Reporting tools freely available. A primary example is the VantageScore system designed for exactly this situation.

There’s no need to lower credit qualifying standards.

Just bring them into the 21st Century and give the locked out 25% the same home ownership opportunities as the rest of us.


 | Comments Off on NEW 3% DOWN PROGRAMS


Great news for a large number of the potential 1st time home buyers who have been locked out of the market for the past few years by over cautious Lenders.

The new programs just announced are aimed at borrowers who have higher than required Income but less than the minimum down payment.

Both FANNIE MAE & FREDDIE MAC are going to accept 3% Down Payment on

FICO logo

FICO logo (Photo credit: Wikipedia)

new fixed rate loans to 1st time buyers.

FICO Scores in the 640 range may be able to qualify if there are compensating circumstances i.e. recently graduated, earning large income, but major debts from Student Loans etc.

Details are still coming in but this is major good news for this underserved segment of the market.



English: This is one of the huge welcoming sig...

English: This is one of the huge welcoming signs for Google plex in the silicon valley. (Photo credit: Wikipedia)


The Market Statistics fiasco

I’m continually answering client’s questions about mass media, or on line reports (Case Schiller etc) which claim to give “information” about the California Real Estate Market and which contradict the information I give them.

Here’s the reality:


Data covering the whole of California is totally useless to anyone considering Buying or Selling property in Silicon Valley.

To get useful information about a specific area why not go to a source which deals ONLY with that area, and has ACCURATE and RELEVANT information on it.

A competent and tech savvy Realtor has direct access to all relevant data bases and can easily provide accurate and current data for individual homes, neighborhoods, Cities, and Counties within minutes, at  no cost to a Client.

Much of this data is either not available to the general public, or costs inordinate time and money to an individual.


 | Comments Off on WHBL IllUSION

Clark Stanley's Snake Oil Liniment. Before 1920.

Clark Stanley’s Snake Oil Liniment. Before 1920. (Photo credit: Wikipedia)


A Solution without a problem.


The “Wealth Building Home Loan”( WHBL) currently being touted by a few Mortgage “Experts” is a modern equivalent of the old fairy story about “The emperor’s New Clothes”.

This product It has been carefully designed to solve a problem that does not exist, and in doing so it will wrong for the vast majority of home buyers requiring a mortgage.

If you like the taste of snake oil you will love it.

If you want to get the mortgage that’s best for you then talk to someone who will explain ALL of your alternatives and help find the optimum solution for you.This should be based on YOUR UNIQUE Current Financial Circumstances, and YOUR UNIQUE Medium and long term Plans

It should not be the WHBL.


API 2015

 | Comments Off on API 2015

We now know that API will no longer be updated, and will in fact be replaced from next year by a more valuable index.

Question is what will replace it for the missing year?

Latest I hear is that for one year only it will be by an index which will cause considerable misunderstanding in the minds of it’s users.

For one year only the index will be the average of the past 3 years API’s!!!

Because of the way API has always been measured 80% of all schools improved every year. Therefore the new score will be lower than 2014 as the calculation will include previous lower scores.

Home buyers checking out the schools which their children will be attending next year are almost certainly going to see that the “API” has gone down from it’s 2014 number.

We should hope that sanity is restored before this change is implemented but I’m not confident.



 | Comments Off on GOODBYE API




Say farewell to the API as you know it. Welcome to new era of accountability, with at least a couple years of confusion in between. English: San Elijo Hills Middle School


The release Thursday of the results on the state’s Academic Performance Index marks the end of a decade of judging student performance based on test scores alone. Within three years, California will have moved to a very different system in which scores on the newly introduced Common Core assessments and other state standardized tests will be but one spectrum in the prism for evaluating schools and districts. 


There will be new, multiple measures that could include high school and middle school graduation rates, rates of absenteeism, reclassification of English learners, passage on Advanced Placement exams or a mix of other indicators.


How these measures will fit together, and whether the can even be combined into a single index, will be the State Board of Educations challenge.


The law gives them till Oct 2015 to have it in place. 




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