Source: Valley Roadrunner

All real estate (lending) is local

by John Yeager

October 31, 2013

Valley Center is a great place to live. If you are reading this you probably either live in Valley Center now, or are planning to move here.

Real estate transactions in general, and home loans in particular, often require an extensive knowledge of the local market in order to come to a successful completion. This is especially true in a rural area.

In my years of mortgage lending in Valley Center, I have often been called upon to save the day when an out-of-town lender could not complete either a refinance or purchase loan.

Some items to consider:

1) Lot size: Most homes in the city sit on lots that are 5,000 to 10,000 square feet. In Valley Center, most homes have a minimum of 2 acres, sometimes 5, 10 or even 20 acres. Some lenders will be confused by your attempt to finance a “farm” instead of a home.

2) Trees: Is your beautiful five-acre parcel with its fruit trees a home with a grove, or is it a grove with a home? The presence of “too many trees” can stop your loan cold.

3) Schedule F: This is the farm schedule filed with a personal tax return. Some lenders will immediately reject a loan if there is a Schedule F involved, even if the property is not a working farm. In Valley Center a number of properties are hobby farms. The owner writes off the water used for the trees amongst other expenses, and shows a loss on their tax return.

4) Septic system: Some lenders will require a Septic Certification on every transaction. While this is a common requirement of a purchase contract, it probably shouldn’t be required on a refinance loan.

5) Well water: Some lenders may not lend on properties with wells, even if they are not the primary source of water. If they are the primary source of water, will testing and certification of the well be required?

6) Private Road Maintenance Agreement: California law does not require one in writing, although some lenders will require one to be drawn up and signed by all the owners. Imagine having to meet with a neighbor a mile away down your private road and requesting that they sign an agreement to pay to get the road repaired.

7) Lot lines and easements: Rural areas such as Valley Center can have issues with ongoing understandings between neighbors that need to be addressed when a home is sold. A local title company will understand these issues, others may not.

I have had the opportunity to address each of the items above in my years of being a local Valley Center resident and lender. While I enjoy being the hero and getting the transaction closed, it will pay you to start off with a local professional realtor, lender and title company when you are involved in any real estate transaction.

John Yeager is the Valley Center Branch Manager for Summit Mortgage, NMLS #219612. He can be reached at (760) 749-8931 or emailed at His website is