|
|
|
|
|
|
|
| South Bay Real Estate Update Newsletter |
|
| El Segundo Properties Check out these props in El Segundo! 310-418-7339 http://www.mrmlsmatrix.com/DE.asp?k=205080XD42J&p=DE-57090138-840 |
| MB Tree Section Listings! Here are all active listings in the Tree Section of Manhattan Beach! Call Tiffany 310-283-9848 http://www.mrmlsmatrix.com/DE.asp?k=205080XD42J&p=DE-57090416-202 |
| HB & RB Homes $1M & under These are the lowest priced residences in Hermosa & Redondo Beaches... http://www.mrmlsmatrix.com/DE.asp?k=205080XD42J&p=DE-57090260-919 |
| MB Hill & Sand Sec Properties! Close to the ocean and some with great views!... http://www.mrmlsmatrix.com/DE.asp?k=205080XD42J&p=DE-57090414-582 |
| Great deals in Holly Glen! REO's, foreclosure deals in Holly Glen/Del Aire. It's like East El Segundo with much better prices! http://www.mrmlsmatrix.com/DE.asp?k=205080XD42J&p=DE-57090225-951 |
Articles and Advice |
|
 |
|
| No benefit to refi with current lender? By Benny Kass DEAR BENNY: I am shopping for a new mortgage (I will refinance about $160,000 remaining on a condo worth about $300,000) and discovered my mortgage holder wants about $2,200 in closing costs. I just financed with this bank three years ago and have stellar credit. There seems to be no special benefit for refinancing with this lender. Their broker told me as much. I don't understand why they wouldn't want to keep a good customer. Any insight? --Janelle DEAR JANELLE: I am not a defender of banks, but just because the bank performed a title search and a refinance three years ago does not mean that there are no clouds (i.e., impediments) on your title now. The bank must have clear title in order to make you a loan. Accordingly, it must again perform a title search. Additionally, there are administrative costs that have to be paid because the lender will have to look at your financial situation again. There will also be closing (escrow) costs to the settlement attorney or title company. My suggestion is to shop around. Rates are now quite low and mortgage money is becoming more available. Get some quotes from other lenders (including all costs), and then go back to your bank. Tell them you would like to work with them, but their costs are high, and you want them to give you a discount. If that works, go with your current lender. If not, you have the right to refinance with any lender of your choice. DEAR BENNY: In addition to our primary residence, my husband and I own a commercial property that houses our business on the first floor and a residential apartment on the second floor. We currently rent out the apartment. The property is zoned commercial (C-4), dual use. Before selling this property, is there any advantage to selling our primary residence and moving into the second-floor apartment for two years to establish residency? Since each floor is 1,250-square feet, would we then be exempt from paying capital gains taxes on that portion of the profit from the sale that represents the residence? And if so, in determining what portion is considered residential use, would the land that surrounds the building (approximately 4,000 square feet of concrete driveway/parking lot) be considered part of the commercial property although part of this area would be used for parking our personal vehicles as well as customer parking? --Pauline DEAR PAULINE: Excellent suggestion. The law that allows homeowners to exclude up to $500,000 of gain is not a "once-in-a-lifetime" situation. It can be used over and over again. The only conditions are that the property must be owned and lived in two out of the five years before it is sold. So, you can sell your current home and if you have owned and lived there for the requisite period of time, you can exclude up to $500,000 of your profit. In fact, if you have lived in that property for a long time, you can even move into the upstairs apartment now, so as to start the clock running on the second exclusion. However, be careful --if you cannot sell your current house within the next three years, you will lose the right to exclude the profit. And here's another suggestion: When you sell the second property, you have the right to do a 1031 "like-kind" exchange on the first-floor business, and at the same time take the exclusion for the upstairs apartment. This would mean, however, that you will have to be a landlord for at least one or two years on the replacement property that you obtain through the exchange. Talk with your financial advisers about this. As for allocation of the parking area, I really don't know how the IRS would treat this. I suspect, however, that if you carefully allocate the square footage for your personal usage as compared to the business operation, that calculation would be acceptable. DEAR BENNY: Can you tell me what steps a board of directors/management company should take in the event a water-damage claim against the master policy is made by a condo owner? Should the board/management company investigate, take pictures of the damage, and stay actively involved throughout the claims process or merely turn the whole matter over to the insurance company and, in the event of litigation, its attorney? --Paul DEAR PAUL: That's a very good question. On the one hand, the board -- which has a fiduciary duty to the owners -- must make sure that the claim is being processed correctly and honestly. On the other hand, boards of directors are volunteers, and must be able to rely on the professionals who are paid to assist, including management. I think the answer lies somewhere in between doing nothing and being too proactive. Management should monitor the progress of the claim and make sure that the insurance carrier has taken pictures of the water damage. Management should also confirm with outside consultants that the amount of money the carrier is prepared to pay is sufficient to make the repairs. And since insurance companies usually have their own contractors to do the repair work, management should also periodically monitor the work to determine whether it is being done correctly. And management should submit a status report to the board on a monthly basis. Benny L. Kass is a practicing attorney in Washington, D.C., and Maryland. No legal relationship is created by this column. |
|
| Tips for avoiding surprise defects By Dian Hymer A homebuyer in the hills above Oakland, Calif., recently closed on a home that matched her wish list almost perfectly, which is as good as it gets. Before closing, the new home was inspected and no major defects were discovered. The buyer had plans for upgrading, starting with removing all the wall-to-wall carpets. But when the carpets were pulled up, the house began to smell of cat urine. The new owner called her agent, who recommended several people who have experience eradicating pet odor. Within a week, the odor was gone; the buyer was happy and continued renovating her new home. Another homebuyer was not so lucky. She also bought a house where cats had urinated in virtually every room. The sheetrock and flooring had to be replaced. The remediation cost was in excess of $250,000. She hired a lawyer, went to arbitration, and won. As hard as you try to discover all defects before buying, it's impossible to know everything even if the seller is honest and the house is thoroughly inspected. This doesn't just apply to older homes. New homes sometimes have construction defects that aren't readily apparent. What should you do to keep yourself from ending up in a situation like the two described above? HOUSE HUNTING TIP: Make sure that you are involved in the inspection phase of your purchase. This includes attending inspections and asking the inspector questions. If you don't know what to ask, talk to friends who bought recently. Find out if they discovered unexpected surprises after they moved in. Your real estate agent should be able to provide a list of red flags that could indicate serious problems. Ask your agent if he or she has been involved in any unpleasant after-closing situations, and if there could have been anything done before closing to prevent this. Home inspection, engineering, drainage and termite reports often include recommendations for further inspections. And they note items that won't be inspected, like a sauna or irrigation system. Real estate brokers often give buyers a disclosure document advising them to inspect the property carefully. The disclosure might also indicate important issues that agents will not be looking into, like checking the permit record. Don't be fooled into thinking you don't need to follow up on these issues because the house looks fine. You could get lucky, but I wouldn't count on it. In fact, disclaimers detailing the limits of inspectors' and agents' responsibilities make a strong case for taking charge of your due diligence investigations. Don't be shy about asking questions. For instance, if the sellers have pets, ask if there are, or have been, any odors or damage attributable to the pets. If you're concerned about drainage, ask the sellers if they've had any water problems. If so, what have they done to correct the situation? Find out if the house has recently been carpeted or painted. Document your conversations. Better still, ask the sellers to put any pertinent disclosure in writing, even if it's just an e-mail. Keep this documentation in your transaction file. The first thing to do if you discover a serious defect after closing is to review your transaction file and make sure this wasn't already discovered during inspections or disclosed to you by the sellers. If the documentation reveals nothing, make your agent aware of the problem and ask her to talk to the listing agent so that the sellers are aware of the situation. It will cost less time, money, and aggravation if you can resolve the issue without having to go to arbitration or court. THE CLOSING: If this doesn't work, consult with a knowledgeable residential real estate attorney about how to proceed. Dian Hymer, a real estate broker with more than 30 years' experience, is a nationally syndicated real estate columnist and author. |
|
| Is now a good time to downsize? By Dian Hymer Interest rates are low. Prices have come down in many areas. More buyers are deciding it's a good time to buy, even though it may be awhile before the housing market stabilizes. Buyers who have a house to sell face a more complicated situation than they did when they bought their first home. They may not be able to afford to buy a new house before selling the old one. And, it may be more difficult to find a home to buy because many sellers are not selling now due to current market conditions. Despite complications, homeowners who want to trade up in a down market can benefit financially. They may sell their current home for less than it might have sold for a few years ago, but they also could pay a lot to less for the replacement home. Let's say your current home that was worth $500,000 two years ago is now worth $400,000, or 20 percent less. Even though you would sell for $100,000 less today, if you buy a $1 million house that two years ago was worth $1.25 million, or 20 percent more, you come out $150,000 ahead. The math may not be as advantageous if you're downsizing. You may find that you sell at a bigger discount than you would have a few years ago without realizing as large a cash discount on the purchase of the smaller, less expensive house. You also might find that you are in competition with buyers who are either first-timers or trade-down buyers like yourself. Another factor is that, in general, the price per square foot of smaller houses is more than the price per square foot of larger houses in the same area. So you might have to pay more than half the selling price of your house to buy a house that's less than half the size of your house. That is, if you're purchasing the new home in an equally expensive neighborhood. Regardless of this disparity in prices, if housing prices in your area are falling, it would be better to sell now than wait for the market to turn, as your home might sell for even less if you wait. HOUSE HUNTING TIP: There is more to consider than how much profit you might realize in making a scale-down move. The first step is to make a list of all the reasons why you are considering downsizing. Common reasons are that the house is too big; it costs too much time and money to maintain; it's in an inconvenient location; or it's not located close to family. Then make a list of all of the reasons it would make sense to stay in your home. Weigh the pros and cons. The next step is to do a cost comparison to figure out how much it costs to own your present home, including property taxes, home maintenance, utility bills, mortgage payments, insurance premiums, and homeowners association dues, if there are any. Then consider how much it would cost to get your home into prime selling condition. And factor in the costs of sale. Quality of life is hard to quantify monetarily, but is a major factor in most moves. Then, calculate the cost of buying and owning a smaller home. Make certain you consult with your tax adviser to find out about the tax consequences of making the move. Downsizers who are contemplating an out-of-area move should consider renting before buying. It usually takes awhile to learn the neighborhoods and figure out which one is best for you. Even if you're not moving out of the area, it may make sense to rent for a while. THE CLOSING: In low-inventory markets it can take time to find the right home. Dian Hymer, a real estate broker with more than 30 years' experience, is a nationally syndicated real estate columnist. |
|
| Make your short sale shine By Dian Hymer Short sales, where the lender agrees to take less than amount due to them, have tended to sell for less than similar homes in the area. One reason for this is that short-sale listings usually don't look as good as the competition. Another reason is that short sales require lender approval. Last year, lenders often took three to six months to respond to a short-sale offer. If the response was no, the buyer was out looking for another home after having wasted a lot of time. Many buyers who expected short sales to be good deals shied away from them altogether after having a few bad experiences. Subsequently, the Obama administration put pressure on lenders to do more short sales and fewer foreclosures. Now a process that was laborious is much easier to navigate. Before you put your house on the market, contact your lender or lenders to let them know you can no longer afford to keep the house and you will be selling it. Also tell your lender that due to the decline in property values in your area, you may not be able to sell for enough to pay off the mortgage. HOUSE HUNTING TIP: Lenders usually won't work on a short sale until there is an accepted offer on the property. But doing a little ground work with your lender(s) can assist the process. Find out how long it will take them to process a short sale. This kind of information will be important to a prospective buyer. If buyers know they can expect a response from the lender in 30 to 45 days and not four to six months, they'll be more inclined to make an offer. Try to work out a loan modification with your lender before you put your house on the market. If your lender agrees to lower the loan amount, your listing will be more attractive to buyers because the lender won't have to take as large a shortfall in order to approve the sale. Most lenders won't allow credits from seller to buyer in a short-sale transaction. It's a good idea to have presale inspections done before you put your house on the market. The more information a buyer has about the property before an offer is made the better the chance that you won't end up in a situation where the buyer discovers defects that weren't previously disclosed and wants credits as compensation. In most cases, it's worthwhile to make your house look as good as possible before putting it on the market. This will bring you a higher price, which reduces the amount you are short. This will make it easier for the lender to approve the sale. You'll need broad marketing exposure to attract a wide range of buyers. It's important to hire an agent who is willing to put the time and effort in both marketing your property and dealing with your lenders. Your agent should be a good communicator who will keep all of the parties informed about the status of the sale. It's important to consult with your attorney and accountant to review any documents that the lender requires before closing the transaction. Some lenders will require the seller to pay back the amount that the seller is short. A seller does not need to agree, but this could cause the transaction to fall apart. You could owe tax on the amount of money the lender forgave, though the Internal Revenue Service does offer tax relief for those who lose their homes through foreclosure or short sales between 2007 and 2012. It takes a lot of patience with him and perseverance to get through a short-sale transaction. However, a short sale might negatively impact your credit for two to three years; it would be five to seven years if you let the property go to foreclosure. THE CLOSING: If possible, try to negotiate with the lender to salvage your good credit. Dian Hymer, a real estate broker with more than 30 years' experience, is a nationally syndicated real estate columnist. |
|
| Hot Links |
| Search South Bay MLS for FREE! http://beachlifeproperties.com/southbay_mls.htm Find my Dream Home... http://beachlifeproperties.com/dream_home.htm What's My Home Worth? http://beachlifeproperties.com/home_worth.htm |
|
| Your Newsletter is Powered by: |
 |
|
 |
