The document provides an overview of buying condominiums in San Mateo County. It aims to inform and educate home buyers. Topics covered include what a condo is, common condo types, who is best suited for condo living, financing options, market conditions, and how to protect yourself in the buying process. Real estate professionals Chris Williamson and Raymond Stoklosa presented market data on recent condo sales, days on market, and current active listings to give attendees an idea of the local condo market.

1. The Insider s Guide to Buying
Insider’s
Condos in San Mateo County
Presented by
Chris Williamson Raymond Stoklosa
Mortgage Advisor Managing Broker and Co-Owner
Mortgage California The RayChel Realty Group
The RayChel Realty Group
www.RayChelRealtyGroup.com

2. Purpose and Goals of Tonight’s Program
Purpose
• Inform, Educate and Empower Home Buyers
p y
Goals
• Sh
Share with you th thi
ith the things we’ve l
’ learned over
d
30 years about buying a condominium
• L
Leave you more aware and i f
d informed about th
d b t the
issues that really matter about buying a
condominium
The RayChel Realty Group

3. Topics Covered
• What Is a Condo?
• What D Th L k Lik ?
Wh Do They Look Like?
• Who is Best Suited For Condo Living?
• Questions to Ask Before Buying One
• How to Finance One
Affect of New Financing Rules
• How’s the Market?
• How to Protect Yourself
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4. Condominium – What is it?
• Legal Term
Specifically Defined Ownership Arrangement
• Ownership Created by Declaration
Recorded i Public R
R d d in P bli Records
d
• Type of Common Interest Subdivision
Stock Cooperative (Co-Op)
Planned Unit Development (PUD)
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5. Ownership Components
• Where the Buyers Will Live
• Unit Itself – A Box of Air
• What the Buyers Can Use
• Set of Easements
Exclusive Use
Non-Exclusive U
N E l i Use
• Proportionate Interest in Common Property
• Governed by Business Entity – HOA
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6. Townhouse
• Architectural Term
• T
Two Story D lli U i
S Dwelling Unit
• Not Ownership Term
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7. What Do Condo’s Look Like?
Single Family Homes
1242 Hoover Street, Menlo Park
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8. What Do Condo’s Look Like?
Apartment Buildings
Woodlake,
Woodlake San Mateo
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9. What Do Condo’s Look Like?
Townhomes
Ownership Type: Condominium Ownership Type: PUD
Park Bayshore Townhomes Clearview
San Mateo San Mateo
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10. Who Are Best Suited For Condo Ownership?
• Seniors Looking to Downsize
Tired of Hassles
No Major Maintenance
No Outdoor Upkeep or Gardening
• Young People or Couples
Without Children
Career Advancement #1 Priority
Heavy Travel Schedule
Interests Don’t Include Upkeep of
a Home
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11. Buying a Lifestyle
• Shared Living
• Intimate Lifestyle
• Ownership by Consensus
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12. Is A Condominium Right for You?
Key Questions You Must Answer…
• D You Want the C
Do Y W h Community?
i ?
Shared Ownership
Rule Book – C C & R.’s
C.C. R ’s
Majority Rule
• Does the Community Function Well?
Homeowner’s Association
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13. Special Consumer Protection Laws
California Law Requires…
C lif i L R i
• Unless Exempt Seller’s Disclosures
Exempt, Seller s
Transfer Disclosure Statement
• Plus 27 Additional Condo Specific Disclosures
Seller’s Responsibility
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14. Homeowner’s Association Disclosure
HOA i R
is Required only t provide certain specific
i d l to id t i ifi
information and only to certain people - Owners…
• Governing Documents
• Pro-forma Budget
• Reserve Study
• Financial Statement
• Assessment Policies
• Ins rance Policies
Insurance
• Current amount fees & assessments
• Special Assessments approved
• Seller’s delinquencies
• Information about construction defects & repair plans
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15. Homeowner’s Association Disclosure
Seller i Required t P
S ll is R i d to Provide B
id Buyer…
• All Governing Documentation, PLUS
• Most recent year s approved meeting minutes
year’s
• Most recent year’s association newsletters
• Rules and Architectural guidelines
• Violations of guidelines that impact purchase
• Details on HOA’s insurance coverage
• Most recent year s Income/Expense Statement
year’s
• Status of Litigation
• Reserve Account study
• Current year’s budget
• Monthly fee & assessments
• Status of owner’s account
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16. Financial Issues to Question
• Is there litigation pending or anticipated?
• What are the monthly dues?
• What do the monthly dues cover?
• Are there current or anticipated special
assessments?
• Are the reserves adequate for the age and
condition?
• Are unit owner’s current on fees and assessments?
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17. Occupancy Issues to Question
• Are there occupancy, rental or pet restrictions?
occupancy
• How many units are owner occupied?
• What is the sale history of the unit and
complex?
• How are parking spaces and storage facilities
p g p g
allocated?
• Are any units in foreclosure?
• What is the policy for handling delinquency?
• What are the architectural guidelines, if any?
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18. HOA Board Issues to Question
• Is complex Self-Managed or Professionally
Managed?
• What are the foreseeable plans for
maintenance and rehab?
• I B d approval required f resale?
Is Board l i d for l ?
• How much liability insurance coverage
• What is the deductible?
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19. Condo Financing – New Challenges
A New and Different Lending Environment
Financing Condominiums is…
• More Difficult
• More Problematic
• More Time Consuming
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20. Condo Financing – New Rules
FNMA & FHA – Stricter Underwriting Rules
• Is Complex Approved?
• Is HOA “Cert” letter prepared?
• Are current HOA Doc’s Available?
Doc s
Get Your Lender Involved Early!
The RayChel Realty Group

21. Financing a Condominium
Four Financial Keys for a Successful Closing
Get Your Mortgage Professional Involved Early
• Direct Lender
• Mortgage Broker
• Mortgage Banker
Get Pre-Approved
Know Your Financing Options
Plan for New Condo Approval Regulations
The RayChel Realty Group

22. Get Your Mortgage Advisor Involved Early
Financing Solutions to Match your Buying Needs
Determine What you Can Afford
Down Payment and Closing Costs
Programs that Meet your Short & Long Term Goals
Work with Your Condo Specialist to
Find the Right Complex
Structure Contract to Reflect Loan Program and its
Approval Requirements
Use Contract Contingencies t P t t Y
U C t t C ti i to Protect Yourself
lf
The RayChel Realty Group

23. Pre-Approval vs. Pre-Qualification
Get Pre-Approved, Not Pre-Qualified
• Pre-Qualification
An informal estimate of what you can afford
• Pre-Approval
A loan commitment from a reputable lender
The RayChel Realty Group

24. Mortgage Pre-Approval
A Pre-Approval Requires Verification of…
• Income
• Asset
• Credit Score
• Continuing Liabilities
A Pre-Approval Gives You...
Pre Approval
• Purchasing Power
A Pre-Approved Buyer is a CASH Buyer
• The Upper Limit of What You Can Afford
The RayChel Realty Group

25. What is a Genuine Pre-Approval?
A Formal, Firm Commitment to Loan…
• Employment Income Assets Debt and Credit
Employment, Income, Assets,
History and Score Substantiated
• Availability of Down Payment and Closing Costs
Verified
The RayChel Realty Group

26. Why Do You Need a Genuine Pre-Approval?
A Loan Pre-Approval
• Demonstrates your credit worthiness
• Determines your purchasing power
• Determines your financing options
You won’t waste your time looking at homes
you cannot afford.
Use the the financing contingency period to
approve the complex.
The RayChel Realty Group

27. Two Types of Loans Today
• FHA
Government I
G t Insured
d
• Conventional
Not G
N t Government I
t Insured
d
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28. Conventional Financing
• “In-the-box”
• D
Down Payment
P
5% down with loan amounts below $417,000
10% down with loan amount $417 001 $729 750
$417,001-$729,750
Higher mortgage insurance than FHA
• Ideally Put 20% Down
Best interest rates
No Mortgage Insurance
• Condo Requirements Set by Fannie Mae
Not by the lender
y
The RayChel Realty Group

29. FHA Financing
• Storybook Loan
Less stringent on credit scores and credit hi t
L ti t dit d dit history
More flexible on work history
No reserves required
• Down Payment as Little as 3.5%
• Mortgage Insurance Cheaper than
Conventional
• Condo Requirements Set by HUD
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30. Complex Approval
Condominium Complex Approval is Determined
by the Financing You Choose
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31. Quickest & Easiest Way to Get Approval
Choose a Complex on the
• F
Fannie Mae A
i M Approved C d Li
d Condo List
Conventional Financing
• FHA/HUD A
Approved C d Li t
d Condo List
FHA Financing
The RayChel Realty Group

32. Not on the Approved List?
• Complex Requires a “Spot Approval”
Takes M
T k More TiTime
Adds Additional Steps
• Important to Get Your Lender Involved Early
in this Process
The RayChel Realty Group

33. New Rules for Approvals
• Effective December 7, 2009
• C
Conventional Financing E i than FHA
i l Fi i Easier h
Automated System Determines Eligibility
• FHA M
More L b i
Laborious P
Process
Review and Approval by Underwriter Determines
Eligibility
The RayChel Realty Group

34. Documentation Needed for Approval
• Condo Questionnaire/HOA Certification
• All C d L
Condo Legal D
l Documents
• All CC&R’s
• Financial Statements and Budget
The RayChel Realty Group

35. Requirements for Approval
• Complex Must Have 2 Units or More
• Max
M 25% of T l Floor Commercial
f Total Fl C i l
• Max10% of Units Owned by One Investor
• Max15% of Units Delinquent in Fees
• FHA: Minimum 50% Sold
• Conventional: Minimum 70% Sold
• Walls-in Insurance Required
The RayChel Realty Group

36. Requirements for Approval
• 50% Owner Occupied for Existing Condos
• 70% O
Owner O Occupied f New C
i d for N Construction
i
• No Litigation
• Reserve Study
No more than 12 months old
Must h
M t show project i 60% f d d
j t is funded
The RayChel Realty Group

37. Requirements for Approval
FHA Only Requirements
Complexes with 3 or l
C l ith less units, no more th 1 unit
it than it
can be encumbered by FHA financing
Complexes with 4 or more units, no more than 30%
of the total units encumbered by FHA financing
The RayChel Realty Group

38. Lengthy Approvals Won’t Last Forever
• New Regulations Give Lenders Power to
Approve Complexes
• First 5 by Each Lender Must go to HUD or FHA
for Approval
Can take up to 8 weeks
• After First 5 Should Move Much Quicker
5,
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39. My Job As a Mortgage Professional
• Package the Transaction to Demonstrate
Credit worthiness of the buyer
Value of the unit
Financial health of the association
• Fi
Financing Solutions t M t h B i g N d
i g S l ti to Match Buying Needs
Down Payment and Closing Costs
Programs that Meet your Short & Long Term Goals
The RayChel Realty Group

40. My Job As a Mortgage Professional
• Structure an Affordable Monthly Mortgage
Payment
• Find Most Competitive Interest Rates
• C
Compare PPrograms and L d
d Lenders
• Minimize Out of Pocket Costs
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41. Knowledge is the Key
• Don’t Use the Media as Your Only Resource
• Don t
Don’t Fall into the Trap of Online Lenders
• Know All Your Options
• Choose a Mortgage Professional you trust, have
trust
confidence in, and feel comfortable with
The opportunity is out there, you just
have to take advantage of it!
The RayChel Realty Group

42. The Opportunity is Out There
• You Have the Perfect Storm
Interest rates are at historic lows
Realistic home prices
Find a Loan First, Then Find a Home
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43. How’s the Condo Market?
A three months summary of market activity for
condonimiums and townhouses in San Mateo
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44. Condo Sold Summary – San Mateo
Sold Summary
# Sold After Highest Lowest
# Sold Price Reduction
# Sold Price Reduction Sold Price
Sold Price Sold Price
Sold Price
3+ BR 5 2 $1,537,000 $394,000
2 BR
2 BR 38 14 $700,000
$700 000 $232,000
$232 000
1 BR 16 5 $545,000 $260,000
Studio 2 2 $237,000 $230,000
Total 61
The RayChel Realty Group

45. Condo Days on Market – San Mateo
Days on Market Comparison Summary
y p y
Note: OLP = Original List Price
# Sold in 30 Days or Less
# Sold in 30 Days or Less # Sold in 31 Days or More
# Sold in 31 Days or More
# Sold <OLP @OLP >OLP <OLP @OLP >OLP
3+ BR
3 BR 5 0 0 0 4 1 0
2 BR 38 10 4 3 20 0 1
1 BR 16 3 0 1 11 0 1
Studio 2 2 0 0 0 0 0
The RayChel Realty Group

46. Condo Active Listings – San Mateo
Active for Sale Listings
Note: PR = Price Reduction
# Active Listings # Active Listings
On the Market On the Market
# Active 30 Days or Less 31 Days or More
Listings PR No PR PR No PR Highest Price Lowest Price
3+ BR 17 1 9 7 $939,000 $300,000
2 BR 60 1 17 19 23 $1,698,000 $311,000
1 BR
1 BR 30 2 5 13 10 $489,900
$489 900 $179,000
$179 000
Studio 0
The RayChel Realty Group

47. The Best Experience Possible
• Buying a Condominium is a…
Complex
C l
Complicated
Legal Mine Field
• Utilize Professional Expertise
HOA Documentation Review Specialist
Condominium Experts
The RayChel Realty Group

48. Professionals Help You Succeed
• W k with C d i i
Work i h Condominium E
Expert
Transaction Expertise
Market Kno ledge
Knowledge
• Expert – How can you tell?
Informs and Educates
• Your Advocate
Puts Your Interests First
Counsels, Advises & Negotiates on Your Behalf
The RayChel Realty Group

49. How to Protect Yourself
Stop, Look, Listen and Look Again!
S L k Li dL kA i !
• Include Contract Contingencies
• Conduct Investigation
• Review Disclosures
• Evaluate HOA Documentation
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50. Technology Tools
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51. www.SanMateoMortgageBlog.com
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52. Ask a Financing Question
http://SanMateoMortgageBlog.com/ask-a-question/
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53. www.LivingWellinSanMateo.com
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54. Home Search
http://LivingWellinSanMateo.com/home-search/
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55. Ask a Real Esate Question
http://LivingWellinSanMateo.com/San-Mateo-Real-Estate-Question/
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56. www.PropertyValuesNow.com
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57. Our Next Webinar
12 Costly Home Buying Mistakes
Even Smart People Make
Saturday, November 7th 10am
To Register Visit:
http://budurl.com/HomeBuyingMistakes
The RayChel Realty Group

58. Webinar: Trustee Sales
Trustee Sales – The Most
Dangerous & Most Profitable
Way to Buy Real Estate
Tuesday, November 17th 6pm
To Register Visit:
http://budurl.com/TrusteeSale
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59. All About Getting Your Money’s Worth
• For the Right Person
• A the Ri h Ti
At h Right Time
• The Right Condominium Unit…
Can Be Right For You!
The RayChel Realty Group

60. Free Conversation
Chris Williamson Raymond Chela Rebecca
Mortgage Advisor Stoklosa Stoklosa Williamson
Managing Agent/Owner Agent
Broker/Owner
Phone: (650) 520-0915 Phone: (650) 655-2500
Chris@ChrisEWilliamson.com
Ch i @Ch i EWilli info@RayChelRealtyGroup.com
i f @R Ch lR lt G
www.SanMateoMortgageBlog.com www.LivingWellinSanMateo.com
The RayChel Realty Group