June 29, 2018

Have a Happy and Safe Fourth of July!

               
Happy Fourth of July!

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From the Garcia Real Estate Team to you: Happy Fourth of July. We hope you have a whole lot of fun and get to enjoy some time with your friends, family, and loved ones. Be safe, and have a wonderful Independence Day!

Posted in Miscellaneous
June 7, 2018

Defer Taxes on the Sale of Your Property

While you cannot get out of paying taxes entirely, you can defer them.

 

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How do you avoid paying taxes when selling real estate? I have two options for you.

 

You cannot actually avoid paying taxes, but you can defer them or take advantage of the situations that you have when it is your primary residence by using one of these two methods:

 

1. The 1031 exchange. With the 1031 exchange, you can sell an investment property and transfer the equity into another property as long as you do it within a certain amount of time. You cannot use any of that money. And, you have to use a 1031 exchange company to shelter all that cash as you move it. This is because the government will not allow you to touch the money.

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If you are living in the home that you fixed up for

two of the last five years, you can sell the property without paying the gains of the sell.

 

2. A primary residence. When you buy a house and you are living in it as your primary residence and then sell it quickly, you do not have to pay any money on the gains of the sell. You do not have to exchange the money into a different property.

 

An example of this is when you purchase a home at a large discount because it needs to be fixed up, and then you complete the repairs and increase the value. As long as you are living in the home for two of the last five years, you can sell the property without paying the gains and cash out on it. If you do the repairs and wait, you will be subject to capital gains taxes.

 

If you have any questions about this or are interested in buying or selling, please feel free to contact me by phone or email. I look forward to speaking with you about your real estate needs soon.

Posted in Selling Your Home
May 25, 2018

Questions to Ask Before Hiring a Listing Agent

There are a few important questions you should ask before hiring any agent to help you sell your home.
Let’s go over these questions today.

 

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Before choosing an agent to represent you during the sale of your home, I highly recommend that you interview a few candidates. By doing so, you will be able to choose the agent who will best suit your needs and who will be able to deliver the best results.


So, as you interview potential agents, there are a few key questions you should ask. The first thing you should ask them about is their track record. Understanding an agent’s experience level will be very important in making your final decision.


To gain a thorough understanding of any agent’s experience, ask them how many sales they’ve had in the past 12, 24, and 36 months. This will show you how active they’ve been in your career. You don’t need to ask an agent if they’re full-time or part-time, because these numbers will show you.


Another good question to ask is how long the agent’s listings typically spend on the market. This will show you how effective the agent is at pricing, marketing, and negotiating. For example, listings my team works with spend an average of three weeks on the market, while the market average is 68 days.

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Understanding an agent’s experience level will

be very important in making your final decision.

 

You should also ask the agent about their list-to-sales price ratio. A list-to-sales price ratio is very important, since it represents the discrepancy between what the agent tends to list properties for versus what their properties tend to sell for.

 

My team’s average list-to-sales price ratio is 102%, meaning we tend to sell above properties for more than the price they’re listed at. Most agents sell properties for around 97% of what they’re listed for.

 

Asking what an agent’s success level is will be another good indicator of their skill. How often are their contracts expiring? In today’s market, the average success rate is just 70%. Our team’s average has been 100% success for the past two years straight.

 

If you have any other questions, would like more information, or would like to interview our team regarding your next home sale, feel free to give me a call or send me an email. I look forward to hearing from you soon.

Posted in Buying a Home
April 18, 2018

Should You Put Your House on the Market Right Now?

Now is a great time to put your Southern California home on the market. I’ll explain why today.
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Should you put your house on the market today?


The answer is absolutely yes. The market definitely favors sellers right now. If you’ve been waiting for an opportunity to list your home, I strongly advise you to consider the market we’re currently in.


Why? Interest rates are projected to rise. When this happens, your house is less affordable for buyers, which can negatively affect you as a seller.  


In today’s market, we have a very interesting situation. Interest rates just went up, and buyers are under pressure to buy a property quickly before they get priced out of the market. We also have some of the lowest inventory that we’ve had in a very long time.


If we look back over the last year or so, inventory levels topped out at 55,000 homes on the market in January 2017. If you’ve been keeping up with the real estate market over the last five years, you’ll know that inventory has been extremely low. As a result, we’ve been in a seller’s market. There are simply fewer homes on the market than there are buyers.

 

Now is the perfect time to sell.

 

Since everyone is going after the same few homes, there are a lot of overbids causing appreciation in the marketplace.


In January of 2017, there were 55,000 active listings for all of Southern California. Inventory continued to drop over the course of 2017, and now there are only about 35,000 homes on the market.


You have the opportunity to get some very favorable terms by selling your property. In addition to a great price, you can negotiate for things like rent backs and contingencies because buyers simply don’t have other options.


I strongly suggest that you use this market to your advantage. This is the perfect time to sell.


If you’re a buyer, you need to be ready to pounce on the right property. With interest rates going up, you don’t want to get priced out of the marketplace.


If you have any other questions about navigating this market, give me a call or send me an email. I would be happy to help you!

Posted in Selling Your Home
April 6, 2018

How Can Buyers and Sellers Get a Great Deal in Our Market?

Inventory is low in our market, which means buyers can’t be picky and sellers can attract multiple offers for their home as long as they price it correctly.

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What’s the latest word from our 2018 market so far?

This year started very aggressively. What I mean by that is inventory was so low that it forced buyers to be aggressive and overbid with their offers.

From 2015 to 2017, we averaged roughly 48,000 active homes on the MLS across Southern California during the month of February. Usually, the month of February has the lowest level of inventory out of the entire year. Inventory then typically picks up once we get into the summer months and then declines again during the fall and winter. This year, inventory levels dropped to 34,000 homes during the month of February, which is a record low.

Right now, knowledge is power in our market.

If you’re a seller and you put your house on the market right now, it will likely be one of the only homes listed for sale. This means as long as you price the home correctly, it should attract multiple offers and you should receive favorable terms.

 

If you’re a buyer, now’s not the time to get picky. You need to be aggressive and be aware of the market conditions so you can use them to your advantage. Most buyers don’t realize how low inventory is right now, so they end up getting priced out of the marketplace trying to get deals that just aren’t probable. They continue to get outbid and wait around. Meanwhile, prices keep going up and interest rates keep rising, thus making homes less affordable as time goes on.

In this situation, knowledge is power. Be sure to use these statistics to your advantage and give yourself the competitive edge you need.

If you have any other questions about our current market or you’re thinking of buying or selling a home, don’t hesitate to reach out to me. I’d love to help you.

Posted in Real Estate News
March 28, 2018

What Buyers and Sellers Need to Know About Zestimates

                   
When it comes to determining your home value, Zillow’s Zestimate feature can’t be trusted to give you an accurate figure.

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You may have heard of Zillow’s Zestimate feature. Today, I’d like to tell you why you shouldn’t trust your home value to this online tool.

 

Zillow doesn’t know your property and the Zestimate can easily be manipulated by the homeowners or by faulty data. Even when nothing is manipulated, the Zestimate is simply an algorithm that only considers comparable properties.

 

Zestimates can’t take specifics of your home into account. It doesn’t consider things like whether you’re on a main or side street or whether your home is on a hillside.

 

As a result, Zestimates have been known to be off by about 20% nationally. Be very careful when using Zestimates.

 

Just like you wouldn’t use WebMD to definitively diagnose your illness, you shouldn’t use Zillow to determine your home value. It is incredibly important to trust a professional.

 

"Be very careful when using Zestimates."

 

A property is the largest investment most people make in their entire life. Zillow can give you a good ballpark figure, but you shouldn’t trust it to give you an exact value.

 

To get a very specific and very accurate understanding of your home’s value, you should speak to a professional.

 

If you have any other questions or would like more information, feel free to give me a call or send me an email. I look forward to hearing from you soon.

Posted in Real Estate News
March 13, 2018

How to Buy and Sell a House at the Same Time

                   
Buying and selling at the same time can raise a few concerns. Today, I’ll go over how to address this situation and handle two transactions at once.

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What happens when you need to buy and sell at the same time?

 

The two biggest concerns most people have when this situation arises is that they could either go through a period of homelessness or end up in possession of two homes at once.

 

There are different ways you can maneuver the transaction to avoid these common issues, but there are two solutions I most highly recommend.


First, you can put a contingency in place so the closings happen at the same time. This allows you to keep your property until you find a new one to buy.

 

"You should always refer to a professional when buying and selling simultaneously."

 

Your other option is to negotiate a rent-back situation. This involves striking an agreement with your property’s buyer, wherein they allow you to rent back your home for a certain period of time while you secure your new home.

 

As a final tip, you should always refer to a professional when buying and selling simultaneously. They will be able to guide you through your transactions and help make them go as smoothly as possible.

 

If you have any other questions or would like more information, feel free to give me a call or send me an email. I look forward to hearing from you soon.

Feb. 27, 2018

3 Tips to Boost Your Home’s Value

                   
Here are three ways that you can increase the value of your home before you list.

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How can you increase the value of your house?

 

There are actually a couple different ways you can do this:

 

1. Adding square footage. Adding space will increase your home’s value, but you will need to ask yourself about the cost. Make sure that the comparable properties in the area will support the additional square footage, and be sure that the cost to build that extra space will not exceed your return.

2. Creating a duplex out of your property. You can legally turn your property into a duplex as long as you have 5,000 square feet or more. You should check your city’s ordinances and discover what potential setbacks might be entailed.

3. Updating your kitchen, flooring, and paint. These are the easiest and most impactful updates you can make to increase your home’s value. Additionally, removing old or worn carpets and replacing it with something more trendy like laminate can also boost your home’s value.

 

"Be sure that the cost to build that extra square footage will not exceed your return."

 

If you have any questions or have reservations about making large updates to your home, feel free to reach out to me. I’d be glad to help you out.

Posted in Selling Your Home
Jan. 11, 2018

4 Things to Know About Our New Tax Code

                   
 Have you heard about the new tax changes? Here are four of them that will affect homeowners.

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How is the new tax reform going to affect real estate? Here are four changes that you should know about:

 

1. The deduction for your property taxes. You used to be able to deduct all of it. Now, your deductions will be capped at $10,000.

 

2. Mortgage interest. Your interest deductions will be affected as well. You used to be able to write off up to $1 million in mortgage interest. Now, you will only be able to write off $500,000.

 

3. Capital gains taxes. The deduction will be the same ($250,000 for single persons and $500,000 for couples), but going forward you will only be able to claim this deduction if you’ve lived in the home as a primary residence for five of the last eight years. That is a change from the previous rule, which said you only had to live in the home as a primary residence for two of the last five years.

 

4. Moving expenses. You will no longer be able to deduct moving expenses on your federal tax return. Unfortunately, that’s not going to be allowed anymore going forward.

 

"The capital gains deduction will be the same, but the requirements have changed."

 

This tax reform will affect a lot of homeowners and will make homeownership less attractive to some people. It will be very interesting to see how this affects our market, which still has extremely tight inventory.

 

If you have any questions for us about these changes or anything else related to real estate, give me a call or send me an email. I look forward to hearing from you.

Posted in Real Estate News
Dec. 19, 2017

How to Find Flip Properties

                   
 How can you find the best deal for your next flip project? I’ll go over a few tips to help you find a good deal both on and off the market.

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Finding flip properties can be extremely tough. I’ll give you a few tips to help you find flip properties today.

 

Investors are often able to find the best deals off the market. That said, there are a couple of deals available through the MLS. If you wait too long, though, those properties get snatched up by other buyers.

 

If you want to find a house that’s on the market, I recommend setting up an MLS search with certain trigger words, like “fix and save,” “fixer,” “investor special,” “looking for investors,” and things like that. Then if a property comes up with any of those words in the description, the listing gets sent to you the minute the property goes live and you can craft an offer right away.

 

Investors tend to get the best deals off market because they are not competing with other buyers. If you are an investor, here are a few different kinds of off-market properties:

 

1. Look for absentee owners. These owners live out of state. Often, they’ve had tenants that have beat up the property. They are highly motivated to sell and want a cash deal to get rid of the property.

 

2. Look for beat-up homes. Knock on the door and see if the owner will consider a cash offer. My mailman often lets me know about vacant or beat-up homes. He gives me the address and then I look up the phone number or knock on the door to talk to the owner.

 

3. Foreclosures. Foreclosed properties are probably the most popular investment for flippers. You can purchase foreclosed properties from the bank or purchase pre-foreclosures from the owners. The owners are in default, so they are behind on their mortgage payments and they may want to take a cash offer right away.

 

4. Probate properties. These people have to sell the property because a family member has passed away and they need to liquidate the assets ASAP.

 

5. Properties with tax liens. The owner is behind on property taxes and has a penalty or lien on the property, which means they have to sell it.

 

If you are looking for a great deal for a flip property, give me a call with any questions you may have. I would be happy to help you!

Posted in Buying a Home