Picture Perfect
By marionduffy | January 21, 2010
Earlier today I was searching the MLS looking for condos to show a client. I came across one that looked particularly nice and, from the photos, appeared to have a very spacious living room. But as I looked closer, I realized that I have seen this floor plan many times and the living room isn’t that large. In fact, it is rather small. But the picture had been taken in such a way that it made the room look much bigger than it really is. Had I not been familiar with that particular floor plan, I would have wasted my buyers’ time showing them this unit. I know they want a bigger living room.
Another time I was looking for a house for a family who wanted a large kitchen and family room. I pulled up one listing that in the photos looked like it had a huge kitchen. It was quite believable as this was a fairly large home, almost 4000 square feet. Fortunately, I previewed the home before taking my buyers out and found that the kitchen really wasn’t all that big. Other photos of the same home made the entry hall look spacious and very elegant when it actually wasn’t anything to write home about. So, needless to say, I did not show this home to my buyers.
Having pictures of your home is a must when you list it for sale. Most potential buyers searching the Internet will just skip over listings that do not have photos. But be careful not to make your house look better than it really is. If so, when buyers actually come to see the home, they will be upset and disappointed that the house isn’t what they thought. It is hard to get an offer from an upset and disappointed buyer.
Make sure your pictures look like what the buyers will see when they view your home. For example, my backyard is really pretty (at least in my opinion) and this could be a plus if I ever decide to sell my house. I have a beautiful picture of the yard that was taken from just outside the dog-run at the side of the house. But how many buyers are going to look at the yard from the dog-run? My back porch looks really nice when you stand at the back fence, but again, are buyers really going to stand at the back fence when they are considering my house? No. Buyers are going to first look at the yard while standing in the house looking out a window.
The point is, don’t let your photos mislead buyers because you will lose buyers. Try to reach a happy medium. Have photos that will entice buyers to want to see your home but not disappoint them when they get there.
Topics: Selling a house, Buyers | No Comments »
Free Foreclosure Workshop
By marionduffy | January 13, 2010
There are two upcoming workshops for people who are worried about foreclosure or are going through the foreclosure process. The event is presented by OC HOPE (Orange County Home Ownership Preservation Collaborative) and sponsored by the Orange County Association of REALTORS. The workshops are free and will be in both English and Spanish. You will have an opportunity to speak to lenders and housing counselors in a confidential one-on-one meeting.
Please refer to the event notice to see what documents you should bring to the workshop. Also, please note that they will only assist the homeowner whose name is on the loan. Therefore, please do not send someone else in your place.
The workshops are open to Orange County homeowners and reservations are recommended. RSVP by emailing myhousingforall@aol.com.
Topics: Foreclosures, Orange County Real Estate, Distressed Properties, Loan approval | No Comments »
Divorce and Filing Your Income Tax
By marionduffy | November 9, 2009
I met an income tax specialist at a recent networking event. We discussed real estate and divorce and taxes. Later in the day I received an email from him that I copied and pasted below. It just goes to show the importance of consulting qualified professionals during the divorce process.
Hi Marion,
As we left breakfast, I realized I did not mention one of the most important tax issues for couples pre-divorce.
If they plan to file taxes separately, they may be advised that they must file “Married filing separately.” This is the most penalized way to file. If they have been living separately for the last six months of the tax year including December 31, there are better alternatives. I have a Chamber member in this situation and her CPA, who she had been using for many years, told her she must file “Married filling separately.” I had to PROVE to the CPA that that was not the case. She saved over $1,000 in taxes. She is now my client and I can give you her reference if you wish.
If I can assist you, I would be most pleased to do so.
Phil
–
Philip Nathan, Enrolled AgentTaxXpert@cox.net
Direct: 949.241.6598
Fax: 949.951.9491
It’s not how much you get —
it’s how much you get to keep.
Topics: Divorce | No Comments »
You Can Quitclaim Title But Not The Loan
By marionduffy | November 6, 2009
Common divorce scenarios:
- A couple is going through a divorce. One spouse wants to keep the house and agrees to make the payments. The other spouse wants to rid himself or herself of the house all together.
or
- Due to the recent decline in the market, the house has lost value and there is little or no equity. Even worse, the house may be worth less than the loan balance. One spouse wants to sell the house even if they have to do a short sale. The other wants to keep it until the market turns around.
So the “out spouse” says, “OK, if you want to keep the house, I will quitclaim title and then it will be all your responsibility. I will not have to deal with it any longer.
Seems like a simple solution, but there is a major problem with it if both husband and wife are on title and both are on the loan. While you may be able to quitclaim title (take your name off the Grant Deed), you can not arbitrarily take your name off the loan (Deed of Trust). Anyone on the loan is individually 100% responsible for the loan. If you quitclaim title but remain on the loan, you are then responsible for a loan on a property in which you no longer have any interest. Not a good thing.
Even if it is agreed that your spouse will make the payments, you are at risk. If for some reason your ex is late or behind on the payments, your credit score will suffer. In addition, the loan will be included in your debt to income ratio which could impact your ability to purchase another home in the future.
Laurel Starks does an excellent job of explaining this issue in her article Divorce & Your House: Leaving your ex-spouse in control of the house….and what else?
I think the main point here is the importance of making informed decisions during the divorce process so you can move on with peace of mind after it is settled.
Topics: Selling a house, Distressed Properties, Divorce | No Comments »
Investors Beware
By marionduffy | November 2, 2009
Many savvy investors buy and sell real estate by doing 1031 exchanges. With the decline in real estate prices over the last few years, some investors may think they are selling a property at a loss and therefore do not need to do another 1031 exchange. But before you do anything, be sure and consult a tax professional because you may have a taxable event. If you acquired the property through a 1031 exchange and are now selling the property for a lower price than you paid for it, you may actually have a gain instead of a loss. The key to remember is that with a 1031 exchange you carry the adjusted cost basis from one property to the next.
Consider this scenario. Let’s say that several years ago you sold a rental property for $350,000. The adjusted cost basis of that property was $100,000 so you had a gain of $250,000. Rather than pay the taxes on the $250,000 gain, you deferred the taxes and bought another property through a 1031 exchange. You paid $350,000 for the new property.
Now in 2009, the property you purchased for $350,000 is only worth $250,000. Even though this is $100,000 less than you paid for it, you still have a gain of $150,000. Remember that you transferred the $250,000 gain from the first property to this property. After you deduct the $100,000 loss, you are left with a taxable gain of $150,000.
This is a very over simplified example, but the point is that if you have bought or sold, or plan to buy or sell through a 1031 exchange, consult a good tax professional first.
Topics: Selling a house, Real Estate Prices, Investment Property, Distressed Properties, Short Sales | No Comments »
A Tough Thing for Many Sellers
By marionduffy | October 15, 2009
In his book, Duct Tape Marketing(Chapter 1, page 10), John Jantsch writes “A tough thing for some small business owners to swallow is that it doesn’t really matter what you like or dislike, what matters is what your target market likes or dislikes”.
When I read this, the first thing I thought was that this also applies to real estate. I thought to myself “A tough thing for many sellers to swallow is that it doesn’t really matter what they like or dislike about their house; it matters what their target buyers like or dislike”. It is especially hard when you are selling your primary residence. This house has been your home, your personal place for as long as you have lived there. It is hard to imagine it as anything but your home.
However, when you list your home for sale, you have to think of your “target” buyers. Those would be the buyers who are looking in the price range of your house. You have to stop thinking about what you like in your home and more about what your buyers like and what will attract buyers to your house.
And, this is where staging comes in. Staging is marketing your house. Staging is bringing attention to those feature that buyers in this price range like. There are a lot of misconceptions about staging. Some people think it is cleaning the house and making minor repairs. While it is absolutely necessary to have the house really clean and make needed repairs, that is not staging. Some people confuse decorating with staging. Decorating is personalizing a home. Staging is “depersonalizing” a house.
When you are trying to sell your house, it is best to think of it more as product or business than as a home. Think of the pool of buyers looking in your price range. What appeals to those buyers? What are buyers in that price range typically looking for? How can we make our house appeal to the greatest number of buyers in that pool? What can we do to our house to make it really stand out over and above the other homes currently on the market? Think marketing, think staging.
Topics: Staging, Selling a house, Preparing Your Home for Sale | No Comments »
Get a C.L.U.E. Report
By marionduffy | August 18, 2009
When you make an offer on a house, make it contingent on the seller providing a C.L.U.E. report. Comprehensive Loss Underwriting Exchange, hence the name C.L.U.E. report, is an information exchange insurance companies use to obtain prior claim history of personal property as well as automobiles.
Why is the claim history on the house important to a buyer? For one, it will give you an idea of past damage to the home and the probability of it occurring again. If the insurance company paid on a claim, you should check with the seller to be sure the repairs were actually made and the homeowner didn’t just pocket the money.
Another very important reason for getting a C.L.U.E. report is that it will help you determine if you, as the new homeowner, will be able to get insurance on the house. Even though past claims were submitted by the previous owner or owners, the damage was to the house. So when you are applying for insurance on that house, the property’s claim history is what the insurance company will look at. The claim history could affect the cost of the insurance or even if you will be able to get coverage at all.
It is really important that you get the C.L.U.E. report during your contingency period because if for some reason you are not able to get insurance on the house, you will also not be able to get financing. The lender will not fund without confirmation of insurance. You do not want to find out a day or two before escrow is suppose close that you have lost your financing because you can’t get insurance. The C.L.U.E. report is easy for the seller to get through Choicetrust.com and it can save you as the buyer a lot of headaches.
Topics: Selling a house, Buyers, Escrow, Disclosures, Loan approval | No Comments »
Keeping the Divorce House
By marionduffy | August 11, 2009
Many divorce specialists say that it is “never” a good idea for one spouse to keep the marital house. I disagree. As they say, “you should never say never”. While in many cases, it is best to sell the house when you get a divorce, sometimes it actually make sense for one spouse to keep the house.
I think what we would all agree on is that if you keep the house, know what you are doing. Make an informed decision. Too often the decision to keep the house is an emotional decision and this is the root of a lot of problems that occur after the divorce.
As real estate professionals representing buyers, we guide buyers through the due diligence necessary when purchasing a property. We advise all buyers to get property inspections, termite inspections, insurance reports, etc. However, when one spouse keeps the house in a divorce settlement, this process is rarely done. The result is that the spouse keeping the house is getting less protection than someone buying the house. It is important to note that just because you live in the house does not mean that you know what you are getting.
For instance, even though you live in the house, it is still very wise to get an home inspection. We all get accustomed to little quirks in our homes, but some of these things may need to be repaired in the near future. Are these costly repairs? What about termites? And how long are the appliances likely to last? While it is impossible for an inspector to guarantee nothing will break, a home inspection will give you a very good idea about the condition of the house.
It is also important to consult a loan officer during the divorce process. Are both spouses on the loan? If the spouse keeping the house agrees to individually refinance the house, can that spouse qualify for a loan?
There are other areas in which you need to be knowledgeable, such as title and tax issues. The point is that if you want to keep the house, it is imperative that you put your emotions aside and actually treat the house as a business transaction. A real estate divorce specialist can help you with this process and assist you with your property due diligence. Then you can make an informed decision that you will be able to live with after the divorce is settled.
Topics: Divorce | No Comments »
Really Successful People Are “Go-Givers”
By marionduffy | August 2, 2009
At the beginning of a seminar I recently attended, the presenter held up a thin little red book and highly recommended that everyone read it. The next day I bought the book and read it immediately. Now I am recommending it to you. The book is The Go-Giver by Bob Burg and John David Mann. It is a great book for anyone in business and even those who are not.
It can be compared to Who Moved My Cheese? by Spencer Johnson, MD in that it is a skinny little book with a huge message. Both books use a parable to make the point, although the story in The Go-Giver is more realistic. Both are the kind of books you read and hold onto and then read again a few years down the line.
The Go-Giver is quick easy reading and very inspirational. I highly recommend it. By the way, if you haven’t read Who Moved My Cheese?, read that one too. We all need to be reminded of the lesson in that story once in a while.
Topics: Life | 2 Comments »
Help For Divorcing Homeowners
By marionduffy | July 30, 2009
Going through a divorce is a very tough and emotional experience. Decisions regarding your house are part of this emotional upheaval. Typically your equity is calculated using appraised value less the outstanding loan balance. However, if one spouse decides to keep the house, appraisal minus mortgage does not equal equity. I have heard horror stories of damaged credit, default, foreclosure, and bankruptcy after the divorce that resulted from decisions made regarding the marital house. Many of these problems could have been prevented during the divorce, but can’t be fixed after the divorce. Even though the family home is often a couple’s most valuable asset, many divorcing couples are not doing their due diligence when it comes to determining its value. They are overlooking factors that can cause serious problems for both spouses after the divorce.
I recently completed the course work to earn the RCS-D designation as a Real Estate Collaborative Specialist - Divorce™. My intention is to assist couples during the divorce process with the necessary due diligence regarding their house. They will then be able to make an informed decision and avoid problems that could haunt them for years after the divorce.
Topics: Orange County Real Estate, Divorce | No Comments »
« Previous Entries