Archives for October 2016

Buying Los Angeles real estate? Reason #1 to be Conservative

October 29, 2016 by Darryl

If you just came from your lender and learned that you can spend more for your new Los Angeles real estate than you thought, it could mean one of two things:

1. Interest rates are lower, so you can “buy more house” for the same money. If this is the reason – it’s time to celebrate.

2. Your lender didn’t consider the other priorities in your life. If this is the reason – stop and think before you take his or her advice.

Some of us simply need more money left over after the monthly bills are paid. Stop and think about how you’re spending that “extra” money right now, and whether you’re willing to change your habits.

Be Patient While Purchasing Los Angeles real estate

If you cherish a weekly night out, love to attend concerts, or need that week on the beach or a ski mountain every few months, you’ll grow to resent the mortgage payment that takes those things away from you. Maybe you want to send your children to private schools, or would like to go back to school yourself.

In addition, remember that the larger Los Angeles real estate, the larger the tax and insurance bills, and the more time and money it takes for maintenance.

Before you take a lender’s word for how much you can spend on your mortgage, look at your budget and your lifestyle. Buy the house that suits your needs – even if your lender says you can afford more.

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Is there a good time to take Real Estate advice from friends and family?

October 20, 2016 by Darryl

When you’re getting ready to purchase or sell a home here in Real Estate, you’ll get plenty of advice, whether you ask for it or not.

Everyone from cousin Gus who sold Real Estate back in 1982, Aunt Sally who sells real estate in another State, your next door neighbor, and your garage mechanic will want to “help” you make the right decisions.

We agents, of course, urge people not to take advice from anyone who isn’t working in the business – here in Real Estate – every day. They simply don’t have the same information and experience to share.

Real Estate

Does Real Estate advice from your friends and family work?

But think about the Real Estate side…

Those who live in your community can give you at least one good bit of advice – they can recommend an Real Estate agent who served them well (or warn you about one who did not.)

Secondly, anyone who has been involved in a Real Estate transaction recently can give you something more – warnings to help you avoid the mistakes they made.
Both buyers and sellers can tell you what happened when they failed to take their agent’s advice – and did things to harm their own chances of success.
Home sellers can tell you about mistakes such as over pricing their home, insisting on being present for showings, refusing to fix-up or repaint, and getting insulted and refusing to negotiate low offers.
Home buyers can tell you about the time wasted making low-ball offers or the disappointment of losing out on the home of their dreams when they decided to “sleep on it.”
So listen to your friends and relatives – just don’t listen when they give you pricing advice, and don’t listen if they tell you to ignore advice from your own experienced Real Estate professional.

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Home Warranties – A Smart Move when buying Beverly Hills houses

October 17, 2016 by Darryl

Before purchasing a home today, most buyers of Beverly Hills houses have a home inspection. The inspector alerts them to issues he or she can see or determine through testing. The buyer and seller re-negotiate if the inspector notes that the roof, or the heating or cooling system is of an age or condition where it might be expected to fail within a short time, or if there are structural or safety issues.

This inspection is a useful tool to prevent buyers from purchasing Beverly Hills houses that are a “money pit” that might drain their resources in the coming years. But it can only go so far.

Better safe than sorry dealing with Beverly Hills houses

The fact is, the inspector cannot see and predict everything. The reason appliances are sold with a 1 year manufacturer’s warranty is because sometimes even brand new equipment is faulty. There are things going on with the interior mechanism that neither a homeowner nor an inspector can see or anticipate.

In addition, many new homeowners exhaust their savings with the down payment. They aren’t financially prepared to meet the cost of replacing a major appliance. It makes sense to spend all you can on a down payment in order to get a better interest rate and a lower monthly payment, but that doesn’t leave an adequate cushion should a $6,000 repair suddenly be necessary.

Enter the home warranty. For a small annual fee, the homeowner’s liability for the cost of repairs is limited to a fee of about $75 to $125 per incident. Compare that to a $6,000 furnace replacement or an $800 water heater replacement and the value is clear.

Sellers of Beverly Hills houses usually include a prepaid home warranty in the sale is a good marketing move. It’s a small thing that just might be the deciding factor in a choice between two homes. It’s also good insurance against the off chance that a buyer might come back and sue for damages, saying “You didn’t disclose…”

Buyers of Beverly Hills houses, purchasing a home warranty is an investment in peace of mind – knowing that if something unforeseen happens, they won’t be going over their heads in credit card debt to handle it.

Note to agent: If you are among those who give a home warranty as a closing gift, add the following sentence:

Since I believe home warranties are important for peace of mind, I give one as a closing gift to all of my home buyers. It’s my investment in their future happiness.

Caution: houses in Los Angeles need Care and Equity

October 7, 2016 by Darryl

Now that houses in Los Angeles prices are on the rise in many cities across the nation, homeowners are once again gaining equity – and that equity is like cash in a savings account. Actually, if prices continue to rise, it’s better than cash in a savings account, because it is appreciating in value at a higher rate.

According to Realtor.com, the overall average increase in home value for homes in the U.S. in the year ending in May was 4.7%.

Your equity is also a hedge against disaster should something like the crash of 2007 happen again.

Should you pull equity out of houses in Los Angeles?

That depends on the reason why. If you use it to make your houses in Los Angeles more valuable or more marketable, it could be a wise investment. Remodeling a kitchen or bath, adding a deck, finishing the basement, or building an addition will add value to your house. In essence, it will move the cash equity into “house value equity.” You’ll get the added benefit of enjoying your home more in the here and now.

If you need it to pay off devastating credit card bills, send a child to college, or grow your own small business, it might also be a wise decision. These are expenditures that will in some way give you a return on investment.

The equity in your houses in Los Angeles should never be used for discretionary spending.

An alarming article by Realty Times recently reported that approximately half of those aged 30 to 34 who have been in their homes for more than 3 years are taking out equity loans.

A Discover Home Equity Loans survey revealed that 43% of those borrowers planned to use their home equity to fund vacations. Others saw their home equity as a way to pay for a wedding.

These are expenditures that leave you with nothing but the memory of a good time – and a monthly payment, perhaps for ten years or more. Is a good memory worth that cost?

Think twice before taking that step.

houses in Los Angeles

If you’re thinking of a home equity loan, do talk it over with 2 or more lenders and learn the facts. Just as with first mortgages, different lenders have different programs and different fees.

There are two types of home equity loans – one that’s a lump sum, just like your first mortgage. The other is a line of credit, that essentially turns your home into a credit card with a large limit that you can access any time you need extra funds. As with a credit card, you only pay interest on the balance you’ve spent.

Do be aware that rates are higher for second mortgages than first mortgages, and you will still have to qualify, pay for an appraisal, and pay fees and closing costs. Different lenders offer different programs, fees, and rates of interest, so shop around before making a decision.

Meanwhile, if you’re wondering how much value you might add to your houses in Los Angeles by remodeling or adding on, get my Maximum Home Value Audit. My audit is not like the usual Market Analysis you’ll get from other Realtors. My Audit will save you up to $10,000 when refinancing or selling your home.

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Beverly Hills real estate buyers and sellers – take heed!

October 1, 2016 by Darryl

Do you use Facebook? Are you planning to purchase or sell a Beverly Hills real estate?

Then heed this warning. Posting about the purchase or sale of a home can cost you thousands of dollars.

For Beverly Hills Real Estate Owners

Computer savvy agents check Facebook to see what they can learn about people on the other side of their transactions.

Often they learn that Beverly Hills real estate buyers will pay far more than they’ve offered or sellers will accept far less than their listed price.

They might not tell their agents this fact – but they tell the whole world on Facebook!

You CAN mention that your house is for sale – and you can state the price.

You can even post a list of features and benefits, and a photo of the Beverly Hills real estate. You never know, one of your Facebook friends may have a friend who is looking for a house just like yours.

But then direct all inquiries to your agent, and absolutely never say you’ll take less than list price.

Once you’re negotiating over a purchase, it’s best not to talk about your real estate transaction at all, because you could give the other agent important negotiating information.

That means it would also be foolish to talk about your upcoming move – especially if you need to be in some other city by a certain date or need to be moved into your new Beverly Hills real estate soon.

Don’t talk about your reasons for moving, no matter what they are.

Is this fair? Sure it is. In fact, that kind of research is a sign of a dedicated agent, learning everything possible to help his or her clients.

So be careful. Remember that your children also need to keep quiet about the purchase or sale. It’s easy to follow from a parent’s page to a child’s page to see what they’re telling their friends.

The kids might not know the financial details, but they can do damage by talking about the family’s eagerness to move or their reasons for needing to move.

Once it’s over and the transaction is closed – go ahead and celebrate on Facebook. Until then… stay quiet.

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