Have You Ever Heard of Recasting?

Here’s a little secret that could help you save big.

Given the ongoing health crisis and our tight housing market, we have a lot of clients who are ready to make a move but don’t want people tromping through their home while they’re still living there. For these folks who would prefer to move out first, we have a solution: recasting.

In the past, there used to be something called a bridge loan, which allowed you to move into a new home and then sell your old one. For the most part, these loans disappeared back in 2007 and 2008. Recasting, however, is still an option, but lenders don’t really want to talk about it because, frankly, it’s not in their best financial interest.

You can refinance and pay roughly $5,000 in associated fees, or you can keep your current rate and terms and buy down your mortgage with a large lump sum. Here’s how this works:

Let’s say you want to move from one house to the next but don’t want people coming in and out, whether you’re concerned about COVID, have too much stuff lying around, or any other reason. Ideally, you want to be able to move first. Recasting allows you to qualify for both mortgages and purchase the new home with a minimal down payment (5% or maybe even 3.5% down). You will, however, have to use conventional financing; this option doesn’t work for FHA or VA loans.

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    You’ll keep the low interest rate and current terms—you don’t have to start over.

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After you move into your new home, we’ll get your other one on the market and sell it. Presumably, you’ll have a lump sum of equity coming from that other sale; recasting allows you to put this sum toward your next mortgage and pay it off.

The good news is that you’ll keep the low interest rate and current terms—you don’t have to start over. Also, you’ll only be paying a small fee to recast. This option makes the process simpler and a lot less expensive.

So, if you know somebody who’d like to take advantage of this great product, feel free to give me a call. I’m more than happy to explain it in greater detail and field any questions you may have. As always, if you have any other real estate-related questions or needs, don’t hesitate to reach out. I’m here to be a resource for you.

4 Home Improvements With a Great ROI

What can you do around the house to prepare your home for an upcoming sale?

If you’re like many Americans, you’re probably getting (too) used to spending time around the house. Well, if you’re planning to sell your home, this might be a good time to take advantage and prep your house for the market. Here are four simple home improvements that will bring a great return on your investment when you sell:

1. Decluttering. Go through the sundry items you have laying around: If you haven’t used something in a long time and don’t plan to soon, get rid of it by donating it or tossing it out. This will help simplify your upcoming move on top of increasing your return on investment.

2. Painting. If you have peeling paint on the exterior of your home, scuff marks on the interior walls, or visible nail holes, take advantage of the time you have at home to do some quick touch-ups.

3. Gardening and landscaping. Not only would it be good for you to get outside for some vitamin D, but sprucing up your landscaping would also help make your home look better and give you a higher return on investment.

4. Deep cleaning. Clean those baseboards and other often-neglected spaces like those underneath the refrigerator, furniture, and cabinetry.

If you have any questions about preparing your home to sell or what’s happening in the market during these crazy times, feel free to reach out to me. I’d be happy to answer your questions and help you put together a plan for your upcoming sale.

To Sell or Not to Sell

Sellers: Now is a great time to put your home on the market.

What opportunities are there for sellers right now? Here’s what you need to know about our current market.

First, interest rates are as low as they’ve ever been, and these low rates are driving a ton of motivated, qualified buyers to the market. Additionally, inventory is as low as it’s been in a long time. These two factors are ramping up competition among buyers for the limited number of homes for sale and increasing prices.

So if you are considering a move—whether that means upsizing, moving out of state, or cashing out—it’s a great time to sell. We’re seeing high demand for homes in the $500,000 to $850,000 price range. We even had a home that received 50 offers recently! If you plan on upsizing into the higher-end price ranges, the good news is that there is more inventory to choose from above the $1 million price point.

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  Interest rates are as low as they’ve ever been, and these low rates are driving a ton of motivated, qualified 

buyers to the market.
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That being said, there are certain precautions you still need to take while listing your home to maintain your health and safety due to the coronavirus. For example, if you have to buy and sell, our team allows you to recast your loan, wherein you can buy your next home and move into it without having to sell your current one. This way, your original home can be vacant when you put it on the market.

This option doesn’t work for everyone, though, so if you have to live in your current home while putting it on the market, we implement several preventative measures. First, we ensure that all buyers who enter your home are pre-approved. They also need to sign an agreement that verifies their health and prevents them from entering the home if they’ve been around anyone who has COVID-19. Lastly, anyone who attends a showing must wear masks and gloves and use hand sanitizer. In between showings, anything that was touched inside the home gets sanitized.

If you have more questions about our market or you’re ready to sell your home for top dollar right now, don’t hesitate to reach out to me. I’d be happy to help.

Q: Which 3 DIY Projects Will Liven Up Your Property This Summer?

Here are some DIY projects to tackle while you’re stuck at home.

So many of us have been stuck in our homes for the past couple of months, and it looks like that will continue for the rest of the summer, even as things start to reopen. If you’ve been getting cabin fever, it might be a good idea to liven up your space by embarking on some DIY home improvement projects.

This article from Forbes has a detailed list of projects for all experience levels, but three in particular stood out to me:

1. Closet makeover. So many of us have either cleaned our closets out or stuffed them to the brim. If your closet needs to be spruced up, The Container Store’s Elfa system allows you to enter your closet’s dimensions and customize it with shelving, bars, drawers, and more. Once you have the design down, you can order what you need from their store and have it shipped directly to your home. If you don’t know where to start on your design, I'd be happy to refer you to a designer I know at the Container Store.

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    If you’ve been getting cabin fever, it might be a good idea to liven up your space by embarking on some DIY home improvement projects.

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2. Swap out dated hardware. This requires little to no handiness and can be completed in just a few minutes. If the knobs in your bathroom or pulls in your kitchen drawers are outdated, websites like Build.com have tons of different hardware and all sorts of metals, colors, sizes, and finishes. Adding designer knobs and pulls is easy, and it’s a simple way to upgrade inexpensive furniture.

3. Transform a room with paint. Obviously, there are a ton of different traditional paint colors you can choose from, but I found an interesting limewash paint from Portola that’s unique in that it can be applied over many surfaces ranging from stucco to drywall to brick. It can even be applied on cement. It can give a room a sophisticated look that’s reminiscent of a Mediterranean hotel. It also gives you color variations that you can’t get with traditional paint. Again, this is a simple and inexpensive way to completely transform a room.

If you’d like more ideas for DIY home projects, don’t hesitate to reach out to me by phone or email. I’d be happy to share what some of my clients have done to their homes and how you can repeat the process. I look forward to hearing from you.

Mortgage Forbearances in the Wake of COVID-19

Are you having trouble paying your mortgage? You may need a mortgage forbearance.

With so many employees being laid off or furloughed in the wake of the coronavirus pandemic, homeowners who can’t pay their mortgage are looking at their options. The same goes for renters who can’t cover their rent. Today I’ll shine a light on a few of those options.

The first is mortgage forbearance. Mortgage forbearance is a period where you don’t have to make any mortgage payments. However, it doesn't mean you won’t owe that money. You’ll still have to pay that amount eventually, so if you can still make your mortgage payments, I recommend doing so.

In many cases, banks move those suspended payments to the end of the life of the mortgage, which means you’ll pay more in interest in the long run. If you’re unsure whether a mortgage forbearance is right for you, just give your lender a call and talk it over with them.

If you don’t see yourself getting back on your feet anytime soon, call me so we can discuss your other options. Many homeowners have lots of equity in their homes, so we can also explore alternatives like selling or renting out your home.

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If you can still make your mortgage payments, I recommend doing so.

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If you’re a renter, the same principle applies: If you can make your payments, go ahead and do so, because that amount due isn’t going away. Some landlords may cut you a break and offer one month of free residency, but in most cases, they need that money to make their mortgage payments or pay their living expenses. 

Whether you’re unable to pay rent or have tenants who can’t pay rent, those payments usually have to be repaid within the next six months. If you’re the landlord in this case, work with your tenants to see how they can make their payments. If they absolutely can’t, and you depend on that money to pay your mortgage, talk to your mortgage servicer and explain your situation. They know many people are going through a similar situation, and they’ll be willing to work with you. Your tenants may be able to make their payments once they get back to work, so get creative and find a solution that works best for all.

As always, if you have questions about this or any real estate topic, don’t hesitate to reach out to me. I’m happy to help.

Q: How Can I Get the Best ROI When Selling?

Here’s how you can maximize your ROI on a home sale.

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Recently, I’ve had a number of properties that were in some serious need of repairs. These homeowners all asked me what they needed to do to get their homes sold for top dollar.

In most cases, when a seller hasn’t been able to maintain or update their property, they can benefit more from making it look clean, neat, and fresh as opposed to making expensive updates or repairs.

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Kitchen and bathroom remodels are only going to get you 60% to 80% of your money back.

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Something as simple as a fresh coat of paint or new carpet can make a huge difference. Decluttering, depersonalizing, and simplifying what’s in the home to open up the space and make it look as nice as possible will help without spending significant money to do repairs. Many studies have shown that kitchen and bathroom remodels are only going to get you 60% to 80% of your ROI, and that’s a lot of work to put into a property.

I recently sold a property with a bad roof that needed to be completely replaced because it was a rental for 30 years. We were able to get 30 offers for this home without completing any additional work.

We've also sold homes that were in fine condition but were a little dated. Instead of spending money on repairs that you won’t see a return on, cleaning and decluttering is how you maximize the sale price in most cases.

Others may say you need to do a lot of staging and bring in extra furniture, and in some cases that's appropriate. However, for the majority of homes, you can use what's already there for staging.

If you have any questions for me, don’t hesitate to reach out via phone or email. I look forward to hearing from you soon.

How a Reverse Offer Might Help You

In a market where multiple offers are scarce, what can you do to find the right buyer? Consider a reverse offer. 

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In a hot real estate market, it’s very common to get multiple offers. We see homes sell very quickly in this type of market. In a more balanced or a downward trending market, however, one tool we like to utilize is a reverse offer. As a proactive agent, I’m constantly gauging the market temperature and the people who are coming through my homes. When I’m able to get feedback from agents and buyers, I sometimes hear about a buyer who is interested in the home but still on the fence. When buyers have more choices, it is tougher for them to make a final decision.

With a reverse offer, the home seller is in the driver’s seat.

In a case like this where a buyer is hesitant, a reverse offer is a good strategy. Essentially, we go back to the buyer and make an offer to them instead of the other way around. This often gets their attention and allows us to really gauge if they’re interested in the home or just browsing because the market is so active. If they’re really interested, they might just accept the offer outright or come back with a counter. This process helps a home sale move along a lot quicker than just having it sit there, waiting for offers to come in. We are proactive and think outside the box in order to help get our clients’ homes sold. If you have any questions for us about reverse offers or about anything else related to real estate, don’t hesitate to give me a call or send me an email. I look forward to hearing from you soon.

The Cost of Dealing with an iBuyer

Selling your home to an iBuyer would make for a quick, convenient sale, but that convenience comes at a cost. 

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If you’re a home seller, is dealing with an iBuyer a wise decision? First, let’s review what an iBuyer is. An iBuyer is a company or an investor who’s looking to buy a home sight unseen. If you need a quick sale, they can seem like a convenient option because you can skip out on things like showings and close the deal in as little as seven days.

These companies are ultimately looking to buy properties so they can then resell them for a profit.

All that convenience comes at a cost, though. You see, these companies are ultimately looking to buy properties so they can then resell them for a profit, so they’ll typically make offers that are 10% to 15% below your home’s actual market value. It should come as no surprise, then, that a recent study reported that nine out of every 10 sellers reject their iBuyer offers. If you want to sell your home quickly and still get top dollar, there are other options available to you. For example, we recently sold a home sight unseen, but we still listed it on the open market and gave everyone a chance to bid on it. We ended up attracting 16 offers and selling well over list price. If this sounds like something you’re interested in, don’t hesitate to give us a call so we can get started right away. If you have any other real estate questions, feel free to reach out to us as well. We’d love to help you.

Selling Your Home? Don't Settle for a Discount Company

Don’t trust a discount company to buy your home. If you want to earn top dollar, you have better options available to you.

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Recently, a client called and told me they had no choice but to sell to a discount company. When I asked them why, they said they had financing concerns and were afraid they wouldn’t be able to earn top dollar on the open market. At this point I let them know that I would actually be able to get them more for their home than they would get from working with one of those last-resort companies. The fear of not being able to sell on the open market is more common than many might think. It’s one I personally hear all the time.

Most people want to sell for top dollar, and my team and I can help you achieve this.

There’s a variety of reasons people believe this. But regardless of the reason, it’s important to know that these companies buy homes at a deep discount in order to flip them for a profit. I’m pretty sure that most people wouldn’t want to sell their home at a discount. Most people want to sell for top dollar and I’m happy to tell you that my team and I can help you achieve this, regardless of the condition of your home. We can direct you to all kinds of options for whatever your situation may be. 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.

Don’t Wait for Spring to Sell

There are plenty of benefits to selling your home during the winter months. Here are just a few.

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If you’re thinking of waiting until springtime to sell your home, you might want to re-think your decision. Here are just five of the reasons why right now is a great time to get your home listed: 1. Less inventory to compete against. With few homes to satisfy the strong demand in our market, listing your home now will bring it more attention than it will get during other times of year. More attention equals more offers and ultimately, more money. 2. Most job relocations happen in the first quarter. Buyers that are relocating here in the new year are out and about looking for homes now. They are very motivated to get a deal done quickly and will pay what is necessary in order to buy your home. 3. Landscaping isn’t as much of a factor during this time of year. This gives you less work to do on the outside of your home to get it ready for the market.

With less competition, you’ll see more attention.

4. Homes are more festive. This makes buyers more festive and in better moods overall. 5. People have more free time to look at homes at this time of year. There are fewer buyers out there, but the ones that are here are very motivated. If you have any questions for me or want to take advantage of these market conditions before they shift, don’t hesitate to give me a call or send me an email. I look forward to hearing from you.

Are You Missing out on Tax Deductions?

Whether you’re a home buyer or a seller, what are some of the tax deductions you can take advantage of?

When you’re selling a property, all of your fees and costs associated with selling it can be deducted. These can include commission fees, escrow fees, title fees, and any of the costs of fixing it up. You want to keep all of this information and give it to your accountant to make sure you maximize your profit from the home.

If you’re selling your primary residence, you can actually take up to $250,000 (if you’re single), or $500,000 as a deduction off of any gain you make from the sale of the home. People sometimes move every couple of years specifically to take advantage of this deduction. If you turn that property into an investment property, you can also rent it out for two years before selling it. The only caveat is that you must have lived in the property for two out of the last five years overall.

If you’re ever unsure, always check with an accountant.

If you’ve rented out a property for five years and decide at that point that you want to sell it, but you don’t want to pay the capital gains tax, you can do what’s called a 1031 exchange. In this case, you would sell the property and give the profit to an intermediary for them to hold in a qualified intermediary account. From there, you would purchase another property of equal or greater value. This would allow you to defer any capital gains on the first property and put it into a different one. In theory, you could move into the new property after a period of two, three, or four years and it would then be considered your primary residence. 

When you’re purchasing a property, all of the same variables apply. Your escrow fees, title fees, and mortgage interest can be tax write-offs, as well. You can also write off all of your mortgage interest when you’re living in the property year to year.

If you’re ever unsure, always check with an accountant to make sure you’re writing off the right things.

If you have any other questions about tax deductions or other real estate-related topics, feel free to give me a call or send me an email. I'd be happy to help you!

Will Your Home Sell over the Holidays?

Looking to buy or sell a home in South LA County or North Orange County? Click here to perform a full home search, or if you're thinking of selling your home, click here for a FREE Home Price  Evaluation so you know what buyers will pay for your home in today's market. You may also call us at (562) 316-2915 for a FREE home buying or selling advice.

A lot of people think that the real estate market takes a break in between Thanksgiving and New Year's, but that's a very common myth. People are always buying and selling homes, even during the holidays!

We don't get the cold weather that the rest of the country does, and so our market is much better during the holiday season.

Another thing working in your favor as a seller is that buyers, during the holidays, are much more motivated and a lot more serious about finding a home and settling in quickly. This means that you'll get a great price for your home and you'll probably be able to sell it fast, too.

Houses tend to show better during the holidays. Home buyers are more emotionally-driven to buy a home during the holiday season, which means they may be okay with paying you more for your North Orange County property. Buyers also have more time to shop around at the end of the year during the holidays.

Some buyers must purchase homes by the end of the year for tax purposes. January is traditionally a month where we see a lot of job transfers happening, and these people can't wait to buy a home.

You have an opportunity to sell your home for more money right now. So, you can get a great deal from a buyer, and then extend your occupancy so you don't have to move out right in the middle of the holiday season. This also gives you the opportunity to be a non-contingent buyer during the spring, and that will make you stand out to sellers.

If you're thinking about selling your home this winter, please don't hesitate to contact me! It's a great time to get into the real estate market.

How Can Sellers Get Tax Exemptions on Their Home Sale?

Looking to buy or sell a home in South LA County or North Orange County? Click here to perform a full home search, or if you're thinking of selling your home, click here for a FREE Home Price  Evaluation so you know what buyers will pay for your home in today's market. You may also call us at (562) 316-2915 for a FREE home buying or selling consultation to answer any of your real estate questions.

Today I am excited to answer a question from one of you! Kate asked, "If I have recently sold and bought a home, how quickly am I taxed on my earnings from the sale of the home?"

It's a question we get quite frequently. Someone who is selling a primary residence can buy or sell a home every 2 years and get up to $250,000 for an individual, and up to $500,000 for a couple, as a tax-free gain on a property. If your property goes up in value by more than $250,000, you would only be taxed after the $250,000.

Now, you don't have to buy another home right away to take advantage of the tax exemption. If you're selling an investment property, for example, it's a bit of a different situation. If you sell an investment property and take a gain, you will be charged taxes on the capital gains, unless you do a 1031 exchange, which allows you to defer any capital gains into another purchase.

If you have any questions about the specifics or how I can help you take advantage of these breaks, give me a call or send me an email. I look forward to hearing from you!

How Do You Find the True Value of Your Home?

Looking to buy or sell a home in South LA County or North Orange County? Click here to perform a full home search, or if you're thinking of selling your home, click here for a FREE Home Price  Evaluation so you know what buyers will pay for your home in today's market. You may also call us at (562) 316-2915 for a FREE home buying or selling consultation to answer any of your real estate questions.

One of the questions we hear more than any other is, "How do I find the value of my home?" Trulia and Zillow are popular starting points for people looking to find their home value and have now merged in a billion dollar deal. 

What might this mean for you?

The merger won't have much of an effect on you. In North Orange County and South Los Angeles County, there aren't many tract homes and many homes are highly customized. This means that finding a true home value is difficult - Trulia and Zillow often provide data that is 20%-50% off.  That is unlikely to change after the merger.

One option is to get an appraisal. Banks will do this to find a realistic value when deciding on a loan amount. This usually costs between $400 and $500. The problem is that this evaluation is based on recent home sales. They don't look at the trends of the market, such as appreciation and depreciation of home prices. 

Using Zillow and Trulia, or getting your home appraised by the bank, are great if you are just looking for a ballpark value. If you want a true value, you need to talk to a real estate professional - especially if you are thinking of selling your home in the near future. We take into account what's going on in with the current market and have access to resources that banks and websites do not. 

If you want to find your home's true value, give us a call. We would love to provide you with the accurate information you deserve.

New Legislation Allows Short Sale Sellers No Taxation on "Proceeds"

Looking to buy or sell a home in Long Beach, California? Click here to perform a full home search, or if you're thinking of selling your home, click here for a FREE Home Price  Evaluation so you know what buyers will pay for your home in today's market. You may also call us at (562) 316-2915 for a FREE home buying or selling consultation to answer any of your real estate questions.

Since 2007 the Mortgage Debt Relief Act has helped countless homeowners impacted by our housing market crash, allowing them to waive the normal taxation associated from short sale debt write-offs. With the improving marketplace during the past 18 months underwater mortgages were once again threatened with taxation after debate ensued whether the Act would be extended on December 31, 2013.

December 2013 came and went but recently the government announced the program will be retroactively extended once again and sellers can breathe a collective sigh of relief! The State of California Tax Board has also decided to follow suit despite legislation that has been stalled on the state level that would accomplish the same extension.

How Would Sellers Be Impacted If Extension Were Not Granted?
The most significant impact that sellers would feel if the extension not be granted would be a large tax implication on money they would not ever physically receive. Because a short sale occurs when a property is worth less than what is owed on it, in most cases a seller agrees to relinquish all proceeds of the sale to the lender. Without the Mortgage Debt Relief Act, homeowners would be taxed on sale proceeds received regardless of the fact that they never really see the money.

What Can Short Sale Sellers Expect Moving Forward?
With this update, affected sellers can expect to leverage the money saved to move ahead and utilize it toward future financial stability. In fact, banks are now lending again to borrowers with a short sale history quicker than those who have foreclosed on a property.

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Not all real estate agents are qualified or certified in managing short sale or foreclosure properties so If you or someone you know needs that fresh start, we encourage you to contact us today! We look forward to assessing how best we can serve you!

Call Melinda Elmer and her team: 562-316-2915
Call Mike Hernandez of Trilogy Financial Services: 949-221-8105 x 2157

7 Reasons to Sell During the Holiday Season

Welcome back to my video blog! The holidays are going to be here before you know it! I get asked all the time whether now is a good time to sell.  The answer is yes! In fact, I have seven major reasons why the holidays are the prefect time to sell your home!

1. Buyers are more serious - If someone is taking time out of the craziness of the holiday season, you know they need a home.
2. There is less competition - A lot of sellers take their property off the market during that fall and winter months. This means there is less competition and you can get more money for your home.
3. Homes look better - Who doesn’t love seeing a home decorated in holiday lights and decorations? 
4. Buyers are more emotional - The holidays are a time for family, fun and memories. Buyers tend to let their emotions control their buying decisions during the holiday season.
5. Buyers have more time to look - Most people get some extra time off around the holidays. They have more time to look at homes during the week. 
6. Some buyers need to purchase for tax reasons - Some buyers need to buy before the end of year for tax purposes.
7. Short Sale deductions are changing - If you or someone you know is considering a short sale, please call me immediately. The current regulation allows a $250,000 deduction per individual. At the beginning of the year, you will no longer be able to take advantage of that deduction. Not only will you take a hit on your credit, you will also have to pay capital gains tax.

These are seven major reasons you should sell your home now! If you have any questions, please give me a call!

Thanks for watching!