For Sellers

Over 55 and Moving? Save on Your Property Taxes

One of the most common obstacles I run into when working with clients over the age of 55 to find a new home is their property taxes. Many retirees over the age of 55 rely on fixed income or need to be cautious with their money. So when they want to move, either downsize, move to a different area, or move closer to their kids, they can usually afford the home but sometimes they can’t afford the property taxes that are associated with it. Property taxes are usually assessed when you purchase your home at the market price at the time you complete your purchase. Since home prices are so much higher than they were decades ago, this can mean a huge jump in property tax expense. Luckily, there’s Proposition 60 and Proposition 90 that allows homeowners over 55 to transfer their previous property tax basis to their new home. Here are the requirements:

1. You or your spouse must be 55 or older when the original property sells.
2. Your new property must be your principle residence.
3. Both properties must be eligible for the homeowners’ exemption or disabled veterans’ exemption.
4. The market value of the new property must be lower than the original property. Only 1 to 1 exchanges are allowed. Even if only a partial interested in the new property is purchased, the whole property value will be used for this test.
5. The original property closing date must differ from the construction completion or purchase date by two years or less. You can purchase the new property before selling the original property and vice-versa.
6. You must file within 3 years of purchasing your new property.

This is only a one-time benefit and if you transfer between two counties, make sure the county your new home resides in accepts intercounty transfers. As of the time of this blog article, only Alameda, Orange, San Mateo, Ventura, Los Angeles, San Diego, Santa Clara counties allow this type of transfer. Please check with the county you’re moving to verify. I have personally worked with clients transferring their taxes to their new Pasadena and Arcadia homes but every situation is different so please check with your tax accountant or appropriate professional for more information about your particular situation. For more information online, please see this site.

What are 3 Reasons a Home Doesn’t Sell?

No one wants to be on the market and not sell. No one wants to deal with the pain of preparing the home to have guests, the agony of scrambling to clean and race out of the house when you have a showing, and most of all, being uncertain of whether someone will ever buy your home so you can finally move on to the next stage of your life. So what are 3 major factors for actually getting your home sold?

1.    Presentation – Cleaning, Staging, General Home Preparation
The bottom line is buyers are more picky and more busy than ever. They want the perfect home without having to do much work on it. Most people these days have more responsibilities than hours in the day so the majority of buyers will want something move-in condition or something close. So…Condition matters!

Before you even put your home on the market, you should review the condition of your home. The easiest things you can do to make your home more appealing to today’s buyers are also some of the cheapest: de-cluttering (free), new paint (you can do it yourself), and new carpet (try to get remnant pieces if possible). Other things you can possibly do are landscaping, staging, new fixtures, etc.

It’s impossible to write a comprehensive guide to preparing a home for sale but my general suggestion is to make the worst things better before making the acceptable things even better.

Bottom line: If your home requires your buyer to use any imagination at all, you are leaving money on the table.

2.    Availability to Show
One huge mistake I see sellers make is making their property difficult to show. On some listings, I see agent comments like “Please show between 9am-1pm on Saturday and Sunday”. Limiting your showing availability lowers your visibility and may ultimately cost you a sale or limit the amount you sell for.

Every single buyer has a different schedule and a preferred time of showing. By limiting times of showings you’ve reduced the number of possible buyers for your home. I have worked with buyers who were not able to view certain homes that were otherwise perfect for them because of showing restrictions. Guess what? They eventually bought something else.

Bottom Line: Think of putting a limit on showings as the same as putting a limit your selling price.

3.    Pricing
Pricing your home incorrectly can limit your chances of a sale or limit your ability to achieve a good price. Pricing your home too high will do four things:

1. Limit your momentum coming onto the market.
2. Limit the number of buyers who even visit your property.
3. Limit your number of offers.
4. Prolong Your Days on Market.

Some of these negatives can’t be avoided even if you decide to do a price reduction later on so make sure you price your home carefully right from the start to capture the first two week rush of buyers. If you want more details on pricing your home correctly, see my upcoming blog post Pricing Your Home to Sell for the Most.

Bottom Line: Get professional help evaluating and pricing your home. Zillow is a fun tool, not a substitute for a real estate professional, just like WebMD is a good source of information, just not a substitute for a doctor.

The truth is, if you obey the rules above and you have the right strategy, your home should sell in weeks, not months. If you’re not selling or haven’t sold in that time frame, it may be time to re-examine your strategy. If you need help with your strategy, I am always willing to help and present some of my ideas and my comprehensive marketing plan.

Obama’s Plan Offers Exciting Refinance Options

Making Home Affordable is a new plan to help keep homeowners in their homes. One really great part of the plan includes a new refinance option for homeowners who are trying and keep their homes.

A lot of ideas surround helping homeowners who are in default or already close to foreclosure. Some loan modifications and short sales even require that homeowners be delinquent on their mortgage payments before being eligible and by this time it can be already too late to keep an owner in their home.

The difference in this plan is that it targets responsible homeowners who have paid their mortgages on time for the past 12 months. By doing that, it targets homeowners who aren’t yet in trouble, making it more likely for a home to be saved. It also gives homeowners who bought in the past few years to upgrade to a fixed rate and a lower rate.

Another huge benefit of this refinance program is it allows up to 105% financing. Most people couldn’t refinance because they purchased their home 0% down or little money down or their home value dropped too much.

This plan is brand new (our lender just released the guidelines April 7th) so some of the information may change or vary but here are some of the main guidelines:

1. No Cash Out. If you’re looking to refinance cash out of your property, this won’t be allowed under this.
2. Moderately Good Credit, Past Payment History. This means your credit score must be over 620, no late mortgage payments for the past 12 months, no bankruptcy history within 48 months, and no foreclosure in the past 7 years.
3. Documentation. The documentation requirements are pretty lenient requiring only 1 month pay stub, a verbal verification of employment or a year’s worth of tax returns.

There are more rules and guidelines but if you meet the above qualifications and are interested in refinancing, contact me and I’ll personally walk you through the process.

The Increasing Importance of Marketing Your Home Online

In today’s technology driven world, more and more buyers are turning to the internet to look for a home. In a 2006 survey, the National Association of Realtors found that over 75% of buyers start their search online. With so many homes on the market today, it is now essential that these buyers see your home first.

And in the real estate market’s current state, it’s now more important than ever to have a solid internet marketing plan as part of your overall marketing plan. With so many homes for sale, buyers simply don’t have the time to see the hundreds of homes on the market.

What are some ways a technology savvy real estate agent can use to help market your home?

1. Preparing the Home to be Showcased
Even though this isn’t high-tech, preparing your home for showings and pictures is essential for producing showings and eventually offers for your home. In today’s market, buyers are pickier than ever and expecting homes in the like-new condition. If you look at the closed sales, the ones that sell are the ones that are turn-key or in move-in condition. So before you even take a picture, talk with your agent about cleaning, painting, and staging your home to sell.

Below is an example of two very similar homes unstaged (home 1, top left), staged (home 1, top right), staged with a good photograph (home 2, bottom).

2. Photographs, Descriptions, and Virtual Tours
After your home is properly staged or prepared for showing, photographs should be taken, either by a professional photographer or by a realtor with a good, panoramic camera. A panoramic camera will be able to showcase entire rooms and will make the house bigger. So many times, there are beautiful homes on the market with poor photos. And no matter how spectacular your home is, if you have poor quality pictures or a lackluster description, a buyer might eliminate your home without ever stepping onto your property. Also work with your agent to describe the features you love about your house into a description that makes your home stand out. Lastly, virtual tours may also be a good option for showcasing your home but in some instances not having a virtual tour encourages buyers to visit the property instead of just see the virtual tour.

Below is an example of the staircases of the same two homes as above. Left is home 1 and right is home 2.

Below is a picture of the dining room of the two houses. Home 1’s dining room is actually staged better and looks better in real life.

3. Maximizing Exposure for your Home
Now that your home is featured in its absolute best light, it’s essential to get as many people to see it as possible. A technology savvy real estate agent should have a standard way of distributing information about your property online. First, I allow my listings to be sent through the MLS to hundreds of websites, including Coldwell Banker’s, Century 21’s, and Re/Max’s websites. My goal is to showcase my seller’s property to everyone I can, even to agents from other companies because they might just have a buyer for my client’s home. Second, I also have a constantly growing number of sites I submit to, in addition to those above, all to put your property in front of as many buyers as possible.

Although the tools above will help you gain more exposure for your home, internet marketing is not a comprehensive solution but should be used as a part of an overall marketing plan that includes traditional marketing ideas as well. Open houses, broker caravans, signs, and the real estate brokerage network are still vital to selling a home for the most money in this market.

Low-Cost Ways to Save Money and Go Green

With energy prices on the rise and global resources diminishing, more and more people are making efforts to conserve energy, water, and other resources. While some of the ways you can conserve can be expensive, below are some great, low cost ways to reduce your consumption.

1. Compact Fluorescent Light Bulbs – $3.50/bulb
Compared to traditional incandescent light bulbs, compact fluorescent light bulbs use 75% less energy, produce 75% less heat, and can last 10 times longer. According to Energy Star, if each household replaced just 1 light bulb in their home, we could save enough energy to power 3 million homes for a year, save more than $600 million in annual energy costs, and prevent greenhouse gases equivalent to the emissions of more than 800,000 cars.

2. Use Water-Saving Faucets, Showerheads, and Toilets – Free to $350+
Water-saving faucets, showerheads, and toilets can all help conserve water usage. Many cities now require faucets, toilets, and showerheads to conform to their water usage standards, with some even offer low cost solutions for homeowners. A water-efficient toilet can save between 8,000 to 18,000 gallons of water per year. And a water-saving showerhead alone can save up to 3,000 gallons of water, eliminate 1,000 lbs. in carbon dioxide emissions, and reduce your water bill by $50 per person per year.

3. Install a Water Heater Blanket, Lower the Water Temperature – $20
Traditional water heaters keep a large amount of water inside at a certain temperature, usually 140 degrees Fahrenheit. In order to reduce the amount of work required to keep hot water in the system, you can reduce the standard temperature to 130 degrees and install a water heater blanket. A water heater blanket wraps around the water heater to reduce heat loss by 25-40%. Be sure to keep important information regarding maintaining the water heater visible when you install one of these.

4. Change Your Air Filter – $10/filter
Dust and dirt that clog air filters can reduce their effectiveness and make your heating and cooling system work harder. A system with a clogged filter consumes more energy and has a shorter lifespan. Recommendations of how often to change your filter range from one month to three months depending on how often you use your air conditioning and heating system and how fast dust accumulates on the filter.

5. Programmable Thermostat – $40
Heating and cooling can be as much as half of your energy bills. A programmable thermostat that has multiple time settings can help you reduce your bills by turning off your heater or air conditioner while you’re at work and can reduce their usage during sleeping hours. This feature alone will help you reduce your heating and cooling bills by $150 a year.

6. Weather Stripping and Caulking Around Windows and Doors – $20-$50
Some older windows and doors don’t have proper weather stripping and some estimate that this can account for 46 percent of annual heat loss. Applying weather stripping and caulking around windows and doors can serve as a cost-effective way to keep your home cool in the summer and warm in the winter.

While these methods can help you conserve energy at your current home, you may want to put green features into considering when searching for your next home. If you need help locating an already green San Gabriel Valley home, you can always email me or visit my website.