How to Buy a House When You Need to Sell Yours First

I have been asked this question many times, "I want to buy a home, but I need to sell mine first, how can I do that?" If you're thinking that sounds a bit challenging, it can be, but it doesn't have to be. It's best to learn your options and build realistic expectations. As a realtor I see that each transaction has its own set of unique challenges, so regardless of the terms or circumstances it's going to take some work.

Let's discuss your first option. Once you find a home you really like, you can make a purchase offer contingent on the sale of your property. This means that if the offer gets accepted, you will need to list your home for sale (if you have not already), agree on terms with a buyer and close escrow on it. The process of making the initial offer and taking possession of your new home can take 2-3 months if all goes well. The challenge of this approach is that many selling their home want to close escrow quickly, and so they are more likely to accept an offer without such a heavy contingency. It is, however, still possible. In a hot market it's important to have everything together and be ready to execute and minimize delays. Padding other terms of the offer in the seller's favor can also help.

Here's another option, sell your home first. Don't worry, you won't be homeless, and you don't have to move twice either. This is how it can be done... make the rent-back option a term of the sale. Rent-back is when the buyer closes escrow but the seller remains in the home and pays monthly rent to the buyer. No matter what condition the home is in, this is an option. I have seen sellers do rent-backs in excellent condition homes as well as homes in need of many repairs. As long as you stay active in looking for a home and let your real estate agent advise you so you can make a competitive offer to buy your new home, it won't take too long. In ideal conditions the rent-back option can take 1.5-3 months. Not bad, and you only have to move once!

Thanks for reading, and feel free to ask me any questions or suggest another topic!

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Waiting for The Next Big Market Crash?

What memories do you have of 2007? Some have good memories of this year, but for others (especially homeowners) this was one of the worst years. Around this time the housing market crashed and home values plummeted. For some, their home value was far below the mortgage they owed. Many homeowners were not able to get affordable refinancing and were no longer able to pay their mortgages. Foreclosures and short sales left sellers at a loss, losing their equity of thousands, tens of thousands and even hundreds of thousands. For first time buyers and lenders that were able to purchase with cash or somehow secure a loan, they were able to buy homes at an incredibly low price. Home prices eventually came back up and those that took advantage of the crash saw tens and hundreds of thousands of value increase over the span of just 4-7 years.

Here's something important to consider if there is another crash:

Unless you do not own a home during such an event, you will probably not be in a good financial position. Also, in 2007-08 banks were losing a lot of money and some were closing their doors permanently. They were very reluctant to give home loans during this time. In the event of another crash, unless you had all cash or outstanding credit and a steady well paying job, you would have difficulty buying a home. In the case you were able to get a loan and an offer accepted, you would probably have to wait for some time before you knew for certain the home was yours. Foreclosures can take longer than normal sales. Short sales, which are also done when the homeowner can not afford loan payments, can take 3-6 months.

Do you still want to wait to buy a home during a market crash to get a great deal? Ok, but you will be waiting for an extremely long time, for years, maybe even decades. Do you know why there was a market crash back in 2007? Inflation? Artificial prices? Bubble burst? Ok, here is what was going on... many banks were issuing mortgages when they KNEW that the purchasers were not able to afford payments. Why would they do that when they would have to foreclose and lose out? Well, soon after issuing the mortgage, they would turn around and sell it on the market to investors. Here is what was happening: 1. Issue a high risk mortgage 2. Group with other mortgages as a package and sell to investors 3. Repeat. This terrible practice was happening well before 2007, but too many dishonest lenders jumped on board in the years preceding. Bad lending practices coupled with a combination of other economic factors, and it all blew up.

Since that time, the U.S. government made some huge reforms in the financial industry. They put stricter regulations on lenders which set a standard for underwriting practices (criteria used to determine loan eligibility) and required lenders to be clear and upfront with rates and fees. This caused banks and other lenders to conduct business in the highest ethical standards that this country has seen. The government also changed the market positively by regulating bank reserves, offering assistance to them and special loan options to buyers, and regulating loan rates, changing them slowly to allow a steady and much safer economy.

If you're waiting for the next crash, I hate to break your bubble, but it probably won't come soon. A lot of changes were implemented when the government intervened which safeguarded us from the same circumstances happening again. Let's enjoy a steady market and transparent lenders. Buy a home when you are ready. Don't pay rent, build equity!

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How Much is Your Home Actually Worth?

This is for all the current and aspiring homeowners out there. How exactly is the price of a home determined? Perhaps you've noticed a home which seems to be a good price but no one buys. Maybe you've seen a home that sells for thousands above asking after just a few days on market. There is quite a wide range of factors that go into play, both on a macro and micro level. A book could be written on this complex system, but to make things simple we will look at the heart of the matter, what it really comes down to.

How exactly is the value of anything decided? Value, as with price, is subjective. In order to get the right price there must be an agreement between the buyer and seller. For the same home, someone may not even want it if it were free whereas someone else is willing to pay $400,000. In the simplest terms, value is in the eye of the beholder and therefor the right price is generally determined by that one person who is willing to pay more than anyone else (of those that know about it).

The value of a home will be determined by that buyer who wants it most, but before they show up, a decent price point must be set. Too high of a price will detract buyers, too low will confuse them (but definitely attract attention). A good price point is determined by looking at the nearby factors and recent comparable sales data. Most of the time finding a perfect comparable recently sold home is not possible. When I create CMAs (comparative market analysis), I look for the closest most similar house that sold within the last three months. Going too far back in history greatly skews price because home values can change very rapidly. If a comparable home was sold close by, it doesn't necessarily mean that the home in question is worth the same. Consider the following major factors:

What school districts are associated with the home and each comparable sale?

What years were the homes built? Generally home ages will be similar or same in the same or a nearby neighborhood, but not always.

Are there missing or extra rooms or features? You can determine how much a room or pool would add or deduct by comparing those with and without and noting the sold price differences. This is not an exact science, because many factors affect each home sale.

What were the circumstances of the sale? If it was a foreclosure and the home was trashed and needed a lot of repairs, obviously the price will be much lower than what it could have been in better circumstances and conditions. It's best to only compare homes that were sold in similar circumstances if possible.

Next let's look at the different perspectives, sometimes almost polar opposites, between buyers and sellers. Buyers will immediately scrutinize potential homes and look for defects and needed repairs. They are concerned with cost. Sellers want to spend the least amount and make the most possible. This creates difficulty which the real estate agent must masterfully negotiate. With a minimally invested sale, homes can sell for thousands less. Real estate agents must ensure that the home to be sold is in attractive condition, is highly presentable and that it is marketed through the best conduits pertaining. With that being said, home owners often want to list at a high price and buyers want it for less.

You may have noticed on various websites such as Zillow an estimate of home values. I have examined many of these estimates in cities all over California and have found them to be unreliable. Sometimes the estimates are fairly close to actual value, and sometimes they are off by tens of thousands. As of 2015, developers have failed to create a highly effective computer algorithm that measures all of the factors and generates consistently excellent estimates. For now, the best way to get an estimate is with good old brain power and common sense.

Get a free CMA report of your home within 24 hours by clicking on this sentence.
Please note this offer is only available for a limited time. Filling out the form and submitting is quick and simple and places you under no obligation. The report will be generated for your information.

Have a great week!

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Preparing For Your Future: Your First Home Mortgage

This is for all the prospective home buyers who want to be in the position to buy in the future. In order to prepare for your future, you must understand your own perspective. This will enable you to take the proper approach and make your dream a reality.

Approximately 80% of Americans report themselves to be optimistic. The rest? Well, pessimistic. How is this relevant? You'll see... Most people are generally optimistic, which means they want to look for the good things in life, focus on positive, and overall have positive and hopeful attitudes toward their future. This can be a good thing, but it is also bad. Pessimistic people, although sometimes unpleasant, tend to make more careful and calculated moves. They are less likely to spend, more likely to save and put themselves in better financial positions for the future. I am speaking in generalities of course, but there is a real science behind someone's attitudes and how that affects their behavior. Since being optimistic can make us want to spend, a little bit of pessimism can help to balance things out. Pure determination is not enough, you must understand your attitudes and make calculated and conscious efforts toward building your future! Take a moment to reflect on your own perspective and attitudes, and how that affects your finances.

The next step is to understand what lenders will look for when you meet with them to see what you can qualify for. They will ask you for: (A) Last two years of your W-2 income statements, (B) Last two months of full bank statements, (C) Last thirty days of pay stubs. The underwriting process varies between lenders, but all will look for job stability, amount of income, history of consistent earnings, and amount of reoccurring expenses.

Knowing this, following a plan to make all of these look promising to a lender will get you that loan. First, try to get some history with your work. Of course, always be looking for opportunities to advance or change companies/ positions for the sake of considerably higher pay. If you do make a transition between companies, it is best to do it quickly. Months of unemployment in your record can be enough for the loan to get rejected. If your job is more entrepreneurial in nature, then consistent and high earnings will help you out. Consistency is generally the most important of the two.

In the two years you are building your financial position, try to keep costs to a minimum. Make a budget and follow it closely. You can go old school, and write everything in your balance sheets at the end of your check book, or you can get an application on your phone like Level or Sweep, link it to your accounts and track your spending and remaining budget. No matter what you do, start a system to budget, and follow it closely. If you start to waver, don't go for broke, just get back up and try something different if your current system is not working. Best you can, stay away from any and all loans. Car loans, personal loans, student loans, just say no. If you want a home mortgage, you can't have added liability. You may still be able to get the mortgage, but even if you are, the added loan may reduce how much the lender is willing to lend you.

During the preceding two months before you apply, run over your budget and try to cut some extra spending. Eating more meals at home and going out for entertainment less will help. Maximize your income and minimize your spending so when you deliver your bank statements, they will be looking good.

When you finally do apply for pre-approval, if you get rejected or don't get as much as you'd like, don't dismay. Keep at it! Always look for opportunities to advance, creative ways to save, and keep your eyes on the housing market. You may just find something in your budget that you love. When you do, give me a call and I will advise, submit your offer and negotiate on your behalf.

For more information on how optimism and pessimism affect us, click here.

For information about Level Money, click here.

For more information about Sweep, click here.

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First Time Buying A House

I've been helping a lot of first time home buyers, and have seen some common struggles. Buying your first home involves searching and putting in an offer when you've found a home you love. Just making an offer can be more difficult than most anticipate.

Searching

Looking for a good home can be either easy or difficult, depending upon the inventory and type of home. Typically, as of this day finding a great first home can take between one to two months of active weekly searching in the Bay Area. Finding something nice is not so much the problem as affordability and competition.

Making an Offer

This is the most difficult aspect for the first time home buyer, and for a good reason. This is one of the largest decisions someone can make in their life, and one involving a lot of money. Some will find a home that is perfect, but back out of making an offer, or make an offer that is too low and not get accepted. Typically, most first time home buyers in the Bay Area get two or three offers turned down before one gets accepted. This is a learning process and usually with more experience making offers people become more comfortable with making competitive offers. Houses for sale rarely get only a few offers, so it's important to keep in mind that others may be offering a higher purchase price and better terms. Having a great real estate agent for this process is important because they can advise you and work to negotiate on your behalf.

Getting a Loan

Obtaining a loan for your new home should definitely be on your mind before looking for homes, but sometimes it gets pushed aside as an afterthought. It's best to get a pre-approval letter which tells how much of a loan you can get to help you search with the right criteria and get your offer accepted (most sellers won't accept an offer without a pre-approval letter). For more on this, read my post "POWER to The Home Buyer."

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The Luxury Market

Large, beautiful and luxurious homes are built, purchased and sold every year just as with any home. Unlike selling the average home though, there are many more distinguishing and challenging aspects to these large, highly customized estates.

Price Point

Luxury homes are at the top range of all other homes in their surrounding area, which means that from the very start a majority of home buyers will not have the ability or desire to make such a purchase. Reaching qualified buyers is part of an experienced listing agent's job when promoting the house. Focusing on certain channels and areas maintains efficiency and gets the home the attention that it needs in order to sell.

Promotion

This requires much more than entering the listing on to the MLS. For houses near the median price range within their area, in today's market that can be enough to garner a lot of attention and bring in multiple offers, but as can be seen luxury homes are far from average so need the unique approach and attention to details that they deserve. Promotion strategy varies according to the type of property, but a good strategy will usually include: ads in the local paper, magazines, phone promotion, neighborhood promotion, worldwide listing exposure, broker tour and open houses. For homes that are eligible, they can be entered into luxury home websites and magazines for buyers from around the world looking for American luxury homes. With so many foreign investors and all cash buyers it greatly increases exposure and the ability to sell the home.

Days on Market

If you have ever searched for a luxury home, you have probably noticed that some stay on the market for many months. There are different factors which play a role, but the two primary ones are: the type of property (location, style, etc.), and the marketing that is being done. Regardless of how easy or difficult it seems selling the property will be, hard work and intelligent, focused marketing is a must. Experience teaches us that in the luxury market, anything can happen. Some properties seem like they will be hard to sell, and sell within a month. Others seem to be highly desirable but sit on the market for months. With that being said, a luxury home can sit on the market anywhere between a month to an entire year. Getting the right buyer to see it at the right time is the key!

Customization

These homes are highly customized, and many home owners spend thousands customizing. This makes each home incredibly unique, but also presents a challenge for when it is time to sell.

The home shown above is located in San Jose, CA and is for sale. Contact me for more information.

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POWER to the Home Buyer!

This year (as well as last) I have had a lot of my clients tell me how much difficulty they have had trying to purchase a home. Whether you can't quite get the loan you need, or find yourself offering the best you can but getting out bid, you may still have some options that can boost your purchasing power, and get your next home!

Around 87% of homes qualify for down payment assistance, and a lot of buyers simply are not aware of all of their options which could save them thousands of dollars.

In my ongoing search to help my clients, I have come across an awesome online resource that connects hard to find financial programs that are giving buyers the power they need to finally purchase a home.

To search what is available to you in your specific location, click here.

The website linked to above is great at showing what types of assistance are available but you will still need an excellent, reliable and experienced loan officer to put everything together for you. For the years that I have been in real estate, I have met many wonderful loan officers and learned about many of the different lenders. Of all of the loan officers and lenders, I have compiled the top 3 absolute best, no one works harder, has greater flexibility or such a wealth of knowledge as these people do. In no particular order, the following are my top 3 loan officers.

Elizabeth Haddad - Cal Coast Financial
Many years of experience, excellent at getting anyone a loan, and always there when you need her. Able to speak English and Spanish.

Erica Moreno - Chase Bank
Excellent customer service, great flexibility, and outstanding loan team with many happy clients. Able to speak English and Spanish.

Ritu Bhalla - Cal Coast Financial
An energetic, outgoing person. Cal Coast is an excellent lender, and affords great flexibility. Able to speak English, Hindi and Punjabi.

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Being a Positive Impact throughout the World through Real Estate

Did you read the title?

Well... how is it possible to be a positive impact throughout the world? Am I expanding my scope of real estate services to other countries?

While I do help people from around the world, my scope of services are for now within California of the U.S. So how can I impact the world? By taking the next step, and making changes through charity. That's right! As of today, I am donating a portion of EVERY commission of transactions resulting in a sale or purchase of a home to a reputable charity of your choosing, or, let me decide to:

• Get child slaves out of slavery and provide food and education to them in Haiti.

• Get less fortunate children and families medical attention, food and more in Vietnam.

• Enable women in Africa to start small businesses and provide for their children. 

This is an opportunity for you and I to make a difference! Free slaves, feed mouths, provide education, make others eternally grateful! There are those working hard to accomplish this, but they need our help.

If you would like to give directly to help freed child slaves in Haiti, click here.

For more information on other charities, please contact me.

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International Perspective: Dominican Republic

 Today we will be shifting from the usual focus on Bay Area and United States Real Estate, and take a look at a Caribbean country, República Dominica.

 I recently went on vacation here, in Puerto Plata, which is situated on the north coast of the country, next to the beautiful waters of the Caribbean. I did some research and got immunizations, so I felt fairly prepared before entering the country. What I discovered though is that no matter how much research is done, it cannot fully impress how being in a new country for the first time is actually like.

Here are my brief observations:

• The law is more or less guidelines, especially when it comes to minor offenses. Locals rarely if ever get fined for traffic violations. Example: A valid license and helmet is required to operate a moped or motorcycle (popular transportation) but the majority of those drivers never got their license and over 90% never wear helmets or any protective gear. I read about this, and witnessed it on the streets while driving and being driven locally.

• Even though most motorcycle drivers don't wear helmets, they weave through traffic, drive in the middle of lanes opposing traffic and blast through red lights. I was amazed that I never saw any car crashes. Locals seem to have adapted to this chaotic style of driving, and fortunately, I adapted as well.

• There are many poor people living in poor conditions. In the US, even some of the poorest people can get some type of assistance, and have four walls with a roof, with heating and cooling. The DR has a completely different standard for poor, middle class and rich. Driving from the airport to the resort, I saw many small houses along the road and amidst the tropical trees with no windows (only open spaces) and a single small room which houses between three to five people. I discovered that with low wages, they have just enough money to buy some food and water to survive. Towards the end of vacation my girlfriend and I went on a buggy drive through sugar cane fields and tropical forest. Before we began, we purchased bags of snacks for the local kids. As we went through the streets the kids came running up begging for food and water. It was heart breaking, and a privilege to be able to give when we found ourselves experiencing a situation we had not imagined would happen. After the trip I spoke to my friend Nelwys, from Venezuela (South of DR), and he told me that many countries in South America are like that. After this experience, I feel that everyone should be involved in giving to the less fortunate, whether directly or indirectly. If you have trouble giving to charities, book your flight and go see it in person, chances are that you will change your mind!

•  If you are not a native, you can expect higher prices, especially if you are communicating in English. If you can communicate in Spanish, please do so. When you negotiate prices at stores in Spanish you can expect to pay less for merchandise. In some places, you will get better service too. Many will gravitate to visitors looking to sell or get some tip for the slightest service, but will not relate to the visitors. From what I have seen, if you can make a connection with them in their language, you can get better service. Generally, for that though, you must be fluent. 

 This area of the planet is absolutely beautiful. I knew it would be, but experiencing it in person is unlike anything my expectations or foreknowledge gave me. If you plan on going, expect hot temperatures, high humidity (think sauna), and not as sanitary conditions. If you are going to a good resort, you generally don't have to worry about sanitation, except for the tap water, which is not at all safe to drink, bottled water only! Since I have lived in Florida before, I expected a lot of insects, and tons of mosquitoes, but I was surprised to not see very many at all. There were a few bugs, and I didn't even see any mosquitoes.

 There are a lot of fun things to do in this area. Instead of telling you, I'll just show you...

 If you're interested in knowing about real estate there, please click here. Basically, anyone interested in buying real estate there should hire a good attorney who can ensure there is no fraud and that everything needed to be done in the transaction gets done.

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Protecting Your Home from Burglary

     Hello readers! Thank you for joining me in another important real estate topic. Today I will be discussing home burglary, and at the end will arm you with the knowledge that you need to protect yourself.

     There are quite a few homes out there without security systems. Their line of defense is minimal, having locks on doors and windows, some of which are not always utilized, especially window locks. A home break in is not a pleasant topic, and often goes undiscussed as a result. I've talked with a few homeowners who experienced this terrible crime and I see a common opening comment between them and many others: "I've heard of it happening before, but I never thought it would happen to me." It's very difficult to imagine being a victim of a crime, especially when you don't have any close friends who have been victims, and this lack of bad experience gives a sense of security, which easily results in a lack a security measures, ultimately leaving us vulnerable. What's more, burglars don't want to have to work hard for their score, they want an easy target. People who have a false sense of security and subsequent lax home security are their number one targets. Burglars would much rather break into a home with poor security and not many valuables than a home with tight security and expensive valuables. Unfortunately, even if you live in a safe quiet neighborhood, it doesn't mean you are exempt from burglary. I have spoke with homeowners living in Union City and Fremont who have had their home broken into from burglars that were later caught, and it was discovered that they traveled from Oakland, that's up to 50 miles away!

     With that being said, I recommend that at a bare minimum you take basic security measures. Always keep your doors and windows locked when they are closed and not being used. If you're not in the habit of doing this, please develop the habit using reminders that are effective for you (eg. post it notes, phone notifications).

     I recommend going one step further and getting a security system installed. An alarm system which detects window and door breaches can save you thousands of dollars in stolen valuables. Even with insurance, high deductibles can leave you paying for most if not all of the loss, and some things, such as sentimental items (eg. pictures, heirlooms, momentos) can not be replaced. It is far better to pay for preventative measures than pay to try to replace a devastating loss. If you're still not convinced, watch a few episodes of It Takes a Thief, a show which originally aired on the Discovery Channel in 2005. Click here to learn more about the television series. I recommend getting a professionally installed security system by a local expert. According to consumer review, the three top ranking home security companies are Frontpoint, ADT, and Protect America. Click here to view the top 10 home security companies.

     Whether you decide to go with a professional install, or buy some cool gadgets and do it yourself, you will need to decide on some options which include sensor and camera placement. When you are deciding, consider the following statistics on point of entry for burglars.

     I would much rather be prepared for something that never happens than be the victim of something that I wasn't prepared for. Enjoy life, expect the best, but prepare for the worst!

     Be sure to subscribe for your weekly dose, and stay tuned! Have a subject you would like me to discuss? Ask, and let me do the research for you!

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National Home-ownership vs. Renters

     For some hard working homeowners living in Silicon Valley it is difficult to get an actual sense of the rest of the country's economy unless they turn on the news or pick up a paper. Some parts of the Bay Area seem to be micro-economic super powers where townhouses cost a million dollars and average sized single family homes start at two million. In addition, these last two years have seen a rise in home purchases with low days on market averages, which means that if you want to sell a home, several potential buyers will send you an offer fairly soon.

     So what about national home-ownership? As of the third quarter of 2014, it was 63.9 percent which is the lowest third quarter since 1994. Since the most recent housing bubble crash (2005-2007), ownership rates did rise, but they have also fallen, following a roller-coaster pattern since.

     Historically, home-ownership rates rose steadily back in the 60's and 70's, from 63 to 65.6 percent, and then declined in the 80's. After the government pushed home-ownership in the 90's, rates rose from 64 percent in 1994 to 69 percent in 2004.

     How should we interpret these numbers? Is American's dream of owning a home on the decline? Well, perhaps, but it doesn't mean that the housing market is heading down a dark road. Some economists believe that current ownership rates may indicate that rates will rise in the years to come. Some point out that the low rate may be driven by some positive factors, such as having more households in total, which indicates a positive market force. Also the decrease in ownership may be due to a rise in renters, many of which have not lost a home, but who are starting out and will be buying their first home in the future. Overall, predicting the economy is very tricky, but there are chances that national home-ownership rates will begin to steadily rise in the future.

This blog's information has been brought to you by my experience, and C.A.R.'s June/July 2015 "Bust to Boom?"

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Going the Extra 9 Miles

     The beautiful home shown above is located at 6800 Redwood Retreat Rd, outside of Gilroy. This last weekend I had the pleasure of hosting this gorgeous home, and enjoyed the cool breezes, songs of birds, and wind blowing through trees. I met some wonderful people, and they all shared one thing in common, they loved this home!

     This home sits on 36.94 acres of land, and is in one of the most exclusive spots in the Bay Area, with one of the most exclusive roads. Coming to this retreat is not the easiest of tasks for first time visitors, so after promoting this open home by visiting potential buyers and making calls, I had the challenge of directing those coming to visit to the home. After carefully studying aerial maps of the area, I decided to make some custom open home signs that gives visitors the exact address of the home so that they can use their GPS to navigate. I stayed up into the night carefully crafting these signs so that they would be easy to read and look professional. During the setup process the next day, I placed the signs in strategic locations, as far as 9 miles from the property!

     Once I drove closer to the property, I used my personal open home signs, and placed them to keep visitors from getting lost. I am happy to report that no one got lost!

    By the way, the drive to the property was absolutely beautiful, and I enjoyed it very much.

     When I arrived at the property, I was careful to securely fashion all of the signage needed at the property for gate access and directions. When inside I turned on all of the lights and opened some windows to let the cool breeze through. I placed my iPad with the OpenHome sign in application and the custom flyers that I made onto the table by the entrance. After that, I enjoyed the stay and met some great people!

     Would you like a tour of the property? Click the link below!

6800 Redwood Retreat Rd Tour

     Like my level of professionalism and hard work? I can sell your home and get you an excellent amount for it. Visit my website to learn more (below) or give me a call: 510-673-4630

Adam's Real Estate Website

California's Infamous 7 Letter Word

Just what is that 7 letter word? Drought! To Californians this is an all too familiar subject. We hear in the news about water shortages and new stricter laws that are put into place to restrict water usage. Many of us who have grown accustomed to using water freely to water our lawns, wash our cars and fill our pools find it difficult to make the transition to becoming a "water minimalist." Of course, when that outrageously high water bill comes in, the usage starts to go down.

Is the water shortage anything more than an increased water bill? Drought actually affects real estate in many more ways. Have you ever made the drive on 5 to and from Los Angeles? I recall a few years ago seeing many signs about water posted alongside the road where dead tree after dead tree stand on previously flourishing farms. Unfortunately, this type of property's value would be one of the most greatly impacted.

In recent news, Governor Jerry Brown called for a mandatory 25% reduction in water use. In addition, on his website he released a request that 50 million square feet of lawns be replaced with drought tolerant landscaping. I have already seen at least ten houses convert their struggling lawns to rocks, tanbark, sand, and even AstroTurf.

In CAR's June-July 2015 edition, an article discussed how drought can actually slow home building. This can arise from the need to obtain water connections in new housing projects. It was stated that "At a time when supply is already too low in California to meet growing housing demand, the state's water issues may exacerbate issues within the state market."

From this we have seen that the drought can affect utility expense, property values, water usage, and even new home production. What can we do about this? There are many proposals, some of which include various water treatment plants. Many of these are costly and relatively ineffective solutions, but they are definitely worth researching. Before we get into the more complex long term solutions, we must work on what is immediately possible. The first step to this problem starts with each and every one of us conserving water. With that being accomplished, we can then take the next step.

If you haven't already, please visit my website: www.adamofintero.com