We hope that our first time home buyer information and tips are helpful in making the home buying process easier. While it’s important for any buyer to work with a good, and helpful realtor, it’s even more critical for first time home buyers. Keep in mind that as realtors we do this all of the time and a good realtor will make sure not to forget that you don’t do this all of the time. Information is everything!
Over 90% of homebuyers beginning their search online….so where are they looking? Most homebuyers begin their search by searching for area specific listings on search engines such as Google and Yahoo. Many begin actually looking for homes on the large national type sites such as Redfin, Zillow, Trulia and Homes.com, while many other seek the more personal local knowledge of realtor specific sites with more intimate knowledge of the areas they serve and the communities in which they live.
My goal is to go beyond those sites and provide every possible option during your home search as every home buyer and every search is different.
For those looking for the most independent ability to search feel free to visit our MLS search page in which you can search for your dream home using the specific criteria that is important to you. There is no obligation or signup for this service and listings are continually updated. We hope you find it helpful.
Search by price range
You can also search current Hollywood Riviera homes for sale by price or price range
For home buyers looking for the simplest way of searching for homes, I offer daily listing updates via email. Once you provide the details of your home search that are important to you, I’ll send you a daily listing update with new homes and homes with price changes that meet your exact search.
If you’re a first time home buyer and you’re considering buying a home in the South Bay….you’ve come to the right place. We have helped many first time homebuyers not only find a home, but feel comfortable and confident throughout the process. Buying a home is a major decision, both emotionally and financially, and we can help you navigate the entire process from starting your search to closing escrow and beyond. As the market has shifted, it’s more important than ever to feel comfortable and confident in your decision to work with a local realtor.
To help start you on your way, here are some articles designed to help you with your search:
- Why Buy a home instead of renting
- Where to search and how to find current listings
- Considering a move? Steps to take
- How to Look for Foreclosures?
- The home search. Choosing your home
- Homebuyer tips
- The home search. Finding out how much you can afford
- The pre-qualification process
- The difference between getting pre-qualified and pre-approved
- Down payments
- What does your mortgage pay for: PITI
- The loan process
- Understanding Closing Costs
- Homeowners Insurance
- How Interest Rates Will Impact You
We’ve put together a helpful chart to see what most escrow and closing cost terms mean and a little about each of them. Find out who pays for each fee (customarily) and what the fee is for. See also who pays for what during escrow.
Get a better understanding for everything in escrow from lender terms to title terms to inspections.
Buying a Home? Know Your Borrowing Power
When shopping for a home in the South Bay you can save yourself a lot of time, energy, and disappointments by taking time to find out how much borrowing power you have. With that knowledge you can focus your search on homes you can afford. In addition, if you get lender confirmation of your purchase power you can negotiate with increased leverage and confidence. Thus, a smart move on your part is to determine your financial qualifications for a loan before you even begin to look at homes. How can you do that? Get pre-qualified and/or
This process will give you a general idea of what you can afford. It is an estimate based on a surface review of your income and debt. You can pre-qualify yourself or you can have either a real estate agent or mortgage lender handle this for you. If you choose to pre-qualify yourself, you can use one of the many online mortgage calculators designed for this purpose.
Most mortgage lenders have these calculators available on their web site.
When lenders pre-qualify you they ask questions about your income, total debt, monthly payment obligations, current employment, payment history, and any negative factors such as bankruptcies. Generally, they do not perform an analysis of your credit report. They rely on you to provide accurate financial information. There is typically no cost for a pre-qualification analysis nor is there a commitment by either you or the lender with respect to a future loan.
The pre-approval process is more detailed and thorough than pre-qualification. You will be asked to complete a mortgage application, and some lenders charge an application fee. The lender verifies all of the information on your application and reviews your credit report. If you qualify, you will receive a written commitment – a pre-approval letter – for a loan up to a specified amount subject to certain terms and conditions. This commitment is still not a guarantee that your loan will be approved when you do settle on a home to purchase. Your loan commitment is finalized after information about the property, including an appraisal, is submitted and approved.
Even though pre-approval is not a loan commitment, it offers a number of advantages during the home buying process. You know the maximum amount you can spend so you don’t waste time looking at homes that are beyond your price range. You are also more attractive to sellers because you already have financing squared away. This is really to your benefit in a sellers’ market in which the home of your dreams might have multiple competing offers. In any market, pre-approval strengthens your negotiating position because you come to the table with the money to back your offer.
Pre-approval can be particularly helpful for first-time buyers as well as self- employedpersons or those paid on commission. If you are a first-time buyer in competitionwith similar buyers who have already demonstrated their ability to meet a monthly mortgage payment, you may find your offer in a weaker position in the eyes of a seller. Sellers may also have doubts about your ability to get financing. Self-employed buyers or those working on commission sometimes do not have the financial documentation or “paper trail” of salaried persons. Some sellers see this as a red flag. A pre-approval letter in either of these circumstances helps because it demonstrates that a lender has already considered your financial situation and is ready to proceed with the loan.
Regardless of the approach you take, ask your mortgage lender to clearly explain what is involved in each process and any fees, commitments, terms, and conditions that apply. Then let the search for your ideal home begin.
To find out the value of your home in today’s real estate market simply tell us a bit about your home and we’ll put together a full market report (CMA) based on the very latest sales data.
Why South Bay Buyers and Sellers should use a REALTOR
All real estate licensees are not the same. Only real estate licensees who are members of the NATIONAL ASSOCIATION OF REALTORS® are properly called REALTORS®. They proudly display the REALTOR “®” logo on the business card or other marketing and sales literature. REALTORS® are committed to treat all parties to a transaction honestly. REALTORS® subscribe to a strict code of ethics and are expected to maintain a higher level of knowledge of the process of buying and selling real estate. An independent survey reports that 84% of home buyers would use the same REALTOR® again.
Real estate transactions involve one of the biggest financial investments most people experience in their lifetime. Transactions today usually exceed $100,000. If you had a $100,000 income tax problem, would you attempt to deal with it without the help of a CPA? If you had a $100,000 legal question, would you deal with it without the help of an attorney? Considering the small upside cost and the large downside risk, it would be foolish to consider a deal in real estate without the professional assistance of a REALTOR®.
But if you’re still not convinced of the value of a REALTOR®, here are a dozen more reasons to use one:
1. Your REALTOR® can help you determine your buying power — that is, your financial reserves plus your borrowing capacity. If you give a REALTOR® some basic information about your available savings, income and current debt, he or she can refer you to lenders best qualified to help you. Most lenders — banks and mortgage companies — offer limited choices.
2. Your REALTOR® has many resources to assist you in your home search. Sometimes the property you are seeking is available but not actively advertised in the market, and it will take some
investigation by your agent to find all available properties.
3. Your REALTOR® can assist you in the selection process by providing objective information about each property. Agents who are REALTORS®have access to a variety of informational resources. REALTORS® can provide local community information on utilities, zoning. schools, etc. There are two things you’ll want to know. First, will the property provide the environment I want for a home or investment? Second, will the property have resale value when I am ready to sell?
4. Your REALTOR® can help you negotiate. There are myriad negotiating factors, including but not limited to price, financing, terms, date of possession and often the inclusion or exclusion of repairs and furnishings or equipment. The purchase agreement should provide a period of time for you to complete appropriate inspections and investigations of the property before you are bound to complete the purchase. Your agent can advise you as to which investigations and inspections are recommended or required.
5. Your REALTOR® provides due diligence during the evaluation of the property. Depending on the area and property, this could include inspections for termites, dry rot, asbestos, faulty structure, roof condition, septic tank and well tests, just to name a few. Your REALTOR® can assist you in finding qualified responsible professionals to do most of these investigations and provide you with written.
reports. You will also want to see a preliminary report on the title of the property. Title indicates ownership of property and can be mired in confusing status of past owners or rights of access. The title to most properties will have some limitations; for example, easements (access rights) for utilities. Your REALTOR®, title company or attorney can help you resolve issues that might cause problems at a later date.
6. Your REALTOR® can help you in understanding different financing options and in identifying qualified lenders.
7. Your REALTOR® can guide you through the closing process and make sure everything flows together smoothly.
8. When selling your home, your REALTOR® can give you up-to-date information on what is happening in the marketplace and the price, financing, terms and condition of competing properties. These are key factors in getting your property sold at the best price, quickly and with minimum hassle.
9. Your REALTOR® markets your property to other real estate agents and the public. Often, your REALTOR® can recommend repairs or cosmetic work that will significantly enhance the salability of your property. Your REALTOR® markets your property to other real estate agents and the public. In many markets across the country, over 50% of real estate sales are cooperative sales; that is, a real estate agent other than yours brings in the buyer. Your REALTOR® acts as the marketing coordinator, disbursing information about your property to other real estate agents through a Multiple Listing Service or other cooperative marketing networks, open houses for agents, etc. The
REALTOR® Code of Ethics requires REALTORS® to utilize these cooperative relationships when they benefit their clients.
10. Your REALTOR® will know when, where and how to advertise your property. There is a misconception that advertising sells real estate. The NATIONAL ASSOCIATION OF REALTORS® studies show that 82% of real estate sales are the result of agent contacts through previous clients, referrals, friends, family and personal contacts. When a property is marketed with the help of your REALTOR®, you do not have to allow strangers into your home. Your REALTOR® will generally prescreen and accompany qualified prospects through your property.
11. Your REALTOR® can help you objectively evaluate every buyer’s proposal without compromising your marketing position. This initial agreement is only the beginning of a process of appraisals, inspections and financing — a lot of possible pitfalls. Your REALTOR® can help you write a legally binding, win-win agreement that will be more likely to make it through the process.
12. Your REALTOR® can help close the sale of your home. Between the initial sales agreement and closing (or settlement), questions may arise. For example, unexpected repairs are required to obtain financing or a cloud in the title is discovered. The required paperwork alone is overwhelming for most sellers. Your REALTOR® is the best person to objectively help you resolve these issues and move the transaction to closing (or settlement).
How to Avoid Capital Gains Tax When You Sell Your South Bay Home…..**
This article was originally written in 2012. Please verify any/all changes to the tax code.
There are a lot of reasons to buy real estate. You can buy with a minimal cash investment. Real estate tends to appreciate in value over time. If you occupy the property, the federal government subsidizes your housing expense with tax write-offs for mortgage interest and property taxes. If that’s not enough incentive, consider the tax benefits you receive when you sell.
Homeowners who have owned their homes for at least two years are entitled to a capital gains tax exemption when they sell. For married couples that file jointly, the first $500,000 of gain is taxfree. For single individuals, the exemption is $250,000. In either case, the property must be a primary residence that you occupied for 2 of the 5 years before selling.
The current capital gains exclusion for primary residences can be taken every two years. So conceivably you could buy ahome, experience two years of appreciation, sell the property, receive tax-free gain, buy another property and repea the sequence again and again.
The Taxpayer Relief Act of 1997 significantly changed the federal tax laws regarding the sale of a principal residence. Under the current law, you don’t need to invest in another home in order to defer capital gain liability, as was the case previously. Even if you sell your home and rent indefinitely, you’re entitled to take the $250,000 (individual) or $500,000 (married couples) capital gain tax exemption.
Contractors and renovation specialists are making good use of the current tax law. Some builders are choosing to occupy a home they’ve recently built rather than sell it new. After establishing the 2-year minimum residency requirement, they sell the property and are eligible for the $250,000 (individual) or $500,000 (married couples) capital gain tax exemption. Home buyers with fix-up expertise can use this strategy to help build wealth. First, buy a fixer and move into it. Fix it up and live there for at least two years. Then sell, take your tax-free gain and buy another fixer. But don’t even consider this approach unless you like moving a lot and you can live comfortably in a construction zone. You’re only entitled to cash in on tax-free capital gain on the sale of your primary residence. If you own income-producing property, you must pay tax on the gain when you sell unless you complete a 1031 tax-deferred exchange. A 1031 exchangeallows you to roll gain from one income-producing property into another income-producing property. You ultimately have to paytax on the gain, but a 1031 exchange permits you to defer capital gain tax payment in the future.
HOME SELLER TIP: Some homeowners are incorporating current tax law into their retirement planning. Recently, an Oakland,Calif., couple sold an apartment building using a 1031 Exchange. With the proceeds, they purchased, or traded into, a home they’ll ultimately occupy when they retire. Until they retire, the property will be rented. So, they traded one rental property for another and deferred paying tax on the gain. At retirement, they will sell their current residence and collect $500,000 of tax-free gain. Then they’ll move into the rental property they acquired in exchange for the apartment building they sold years before. For tax purposes, they’ll convert the rental property to their primary residence and will avoid paying tax on the gain of the investment properties.
THE CLOSING: Federal tax laws are in a continuous state of flux, so be sure to consult a knowledgeable tax advisor before you buy or sell, particularly if income property is involved. State tax laws vary, so consult with an expert in your area.
**Information above is for general knowledge. We are neither CPAs nor attorneys and cannot give legal or tax advice.