Deja Vu

Deja vu

By Charles Bogue
Saturday, August 11, 2007

Be it fashion trends or home financing, all markets and conditions are subject to cycles.Just like wide ties and thick glasses, seller carry-back financing is rapidly returning as a key stimulant in the creation of a successful home sale.The recent retreat and tightening of institutional financing for home loans has revived the need for sellers to fill in the gap by providing a second trust deed to create a successful sale.With the increase of homes available for sale in the Napa market, each seller seeks a competitive advantage and the offering of seller financing will generate more qualified buyers for your home.
It is important to realize that you are changing from seller to banker when providing financing. You will need to investigate and protect yourself, as any other lender would, by obtaining qualification information from the buyer, creating complete loan documents and knowing the risks that you are taking on.Should you decide to assist in financing, here are some steps to take to protect yourself in your new role as a banker:• The cash investment. The seller’s risk increases proportionately with the amount of the note and the total indebtedness of the buyer. If the buyer has invested only 5 or 10 percent cash of the total purchase price, he or she has less at risk in the event of default. You should exercise caution if the buyer’s total debt exceeds 80 percent of the purchase price.• Tax liabilities. The creation of seller financing may impact your interest income and capital gains on the proceeds from the sale. Consult with your tax advisor before signing a sales contract. Know the after-tax consequence of your providing financing. You can negotiate the term, interest rate and conditions of the note you carry.• Qualification documents. Obtain a loan application, credit report, employment records and all other information that would be required by a conventional lender.• Review senior loans. You will want to know what loans will be ahead of you in priority, the amount of those loans and what your payment and foreclosure obligations will be in the event that you need to take over the total indebtedness.• Title and hazard insurance. You will want to insure that you are named, as any other lender would be, in the coverage of title insurance and in the coverage of hazard insurance in the event of fire or other damage.• Record documents properly. The deed of trust must be properly recorded with Napa County to secure the executed note. Use escrow services in all cases and have an attorney draft or approve all signed documents.More now than ever, seller financing can be a useful negotiation and sales tool that can work to the benefit of both the buyer and the seller. It can give the seller a quality cash-yielding investment and greatly increase the number of qualified buyers and the chances of a successful sale.

Charles Bogue is a broker with Coldwell Banker Brokers of the Valley in Napa, where he offers real estate marketing services as the CB Team. Phone: 258-5221, e-mail: cbnapa@napanet.net.

Good, Better, Best

By Charles Bogue
Saturday, September 29, 2007

From generation to generation there have been simplistic sayings that have given guidance to success, be it in business or life in general. “Early bird gets the worm,” “when the going gets tough, the tough get going,” “plan your work and work your plan” and more recently Nike’s “Just Do It.”Discipline and inspiration walk hand in hand on the road to success. There is good reason to adhere to simple business practices that resonate with you as you create the framework for your method of doing business.An attorney friend recently awakened in me the thought of why being a lawyer is called “practicing law.” The work itself, be it law or any other profession, is practice. It is an evolving process from case to case or client to client, by which you draw on all the knowledge that you have acquired, access the needs of the situation and apply your resources as effectively as possible.In essence, there is no having arrived, you simply learn, grow and improve by “practicing” that which you know.
Of all the simplistic expressions to draw upon, the one I like to use as a business and life benchmark is to “always do your best.” Having heard these four simple words first from my parents in grade school, this expression was rekindled in the reading of a small spiritual study entitled “The Four Agreements” by Don Miguel Ruiz. The fourth agreement in this concise study of human interaction affirms that doing our best each day has a direct implication on how we feel about ourselves and what we are able to accomplish. No one day is like another. Each presents new challenges that require thoughtful energy and the ability to remain positive during moments which may appear adverse or even overwhelming.Staying the course requires more perspiration than inspiration when vision statements and long-term goals fall from view. I remember the definition of discipline being the ability to continue one’s work well after the inspiration has departed.Some days will feel better and more productive than others, but by always doing your best you cannot judge yourself. The book goes on to say “if you don’t judge yourself, there is no way you will suffer from guilt, blame or self punishment.”Raised in a generation of economic privilege, it is beyond my imagination to feel or understand what my father must have experienced in his life during the Great Depression. The ability to keep the faith that fortune would turn when all one could see was evidence to the contrary was an act of courage.Different as they may be, the challenges we face today are as important as any from the past because they are ours.In the words of Don Miguel Ruiz, “Doing your best, you are going to live your life intensely. You are going to be productive, you are going to be good to yourself, because you will be giving yourself to your family, to your community, to everything.”Certainly not a bad way to start the day.

PERMANENT VACATION

By Charles Bogue

Thursday, October 11, 2007

As a resident of the Napa Valley, you may not be a likely suspect for purchasing a “permanent vacation” home here, but there may be a local opportunity to place a seasonal house guest who confuses your home with a hotel.If you need visual representation that changes abound in once sleepy Napa, all you need to do is count the cranes. Check my math, but entering town over the Third Street bridge this week I counted four cranes overhead, giving a glimpse of what is to come for our once sleepy little town. Slightly south and out of downtown is yet another project fully completed and gathering momentum as a destination resort investment opportunity. Call it a third phase if you like, but world acclaimed Carneros Inn on Highway 12 plays host with their state of the art hotel guest cabins. They have sold a dozen million-dollar homes and are now offering “The Orchard.”A one-tenth deeded interest in the project of 27 uniquely designed “cottages” will give your friend or relative a guaranteed minimum of three weeks in one of the fully equipped two-bedroom units. In addition to the three weeks’ guarantee, 42 percent of the year will remain open for space available bookings at no additional cost for lodging or housekeeping which could expand the use to over four weeks during the year.The cost for living the good life for a minimum of three weeks a year is under $300,000, not including the homeowners fee of an estimated $2,000 per quarter. Offered at a reduced first phase pricing, it is anticipated that your investment may well appreciate first as the project sales progress and secondly over time by your owning a deeded interest in these unique cottage homes.

Not intended as a revenue-sharing investment like Silverado Country Club or the Westin, the Orchard is your opportunity to have a 1,200 square foot state of the art single level cottage with separate bedroom suites, a full kitchen, private fenced yard with an in-ground spa, outdoor fireplace, indoor and outdoor showers, Bose entertainment systems and a separate 500 square foot covered outdoor living space with wood-burning fireplace and a Viking barbecue.If cooking on vacation is not your thing, the Carneros Inn offers the Boon Fly Café, Farm and the Hotel Restaurant. There are two swimming pools, an award-winning spa, a 2,000 square foot fitness center, bocce ball courts as well as a local market and a courtyard for mingling with other residents.By including all of these hotel amenities and services, your now houseguest would be able to book planned vacations well in advance and have their own place to stay each year when visiting the grandchildren or returning home to see family members and friends.Having toured one of the custom built cottages, I can give you assurance that you are in for a taste treat both in quality control and how to design a wine country vacation environment.As with other emerging real estate investment choices in our tourist centered valley, one type of residence is not appropriate for all. If, however, you anticipate an annual vacation in the valley, a deeded vacation cottage at the Orchard will put you well on your way to that permanent vacation.