South Bay Realty Blog

I've got a friend who refuses to upgrade his 7 year old computer; he's waiting for the latest technology and for prices to come down. This also happens to be the same guy who didn't buy a house 7 years ago, even though he had the income status, money in the bank for the down payment and the deposit. At that time, he told me he was waiting to see what the market does. Meanwhile he's been paying rent religiously. Does this sound familiar?

Now, I'm not telling you that this is the best time to buy a home, but when is it ever the best time? My point is, if you're NOT in the game, how can you play? If you're serious about becoming a home owner some day and are still currently renting then you need to ask yourself some questions.

If you wait to buy, you'll still need to pay rent in the meantime, so holding off will cost you too. Meanwhile, a buyer's market gives you leverage to get the most out of your offer. Sellers are more willing to make repairs, leave newer appliances and amenities to help seal the deal. The seller may even carry back a portion of the loan that you need to buy the house.

Of course, in any market, it pays not to get in over your head. If you have to get a really short-term adjustable-rate mortgage in order to afford a home, you could run into trouble if interest rates rise as your mortgage adjusts and house prices fall.

Bottom line, if you can afford to make the purchase now and you're planning to be in the house for at least five years, I wouldn't be worried about buying a house in today's market. After all, you need to get "in" at some point, take the plunge!

Written by Greg Hetrick, REALTOR®
Wednesday, March 14, 2007

Warning: Drink some coffee before you read this boring entry...

Two important tax dates are quickly approaching! But there are also two important tax deductions that may help you feel a little better when it comes to paying taxes.

Your income taxes this year are due by Tuesday, April 17, 2007. And the 2nd installment of the dreaded Los Angeles County Property taxes become delinquent after 5pm on April 10, 2007. At least we don't have to pay the Easter bunny on April 8th. Well, actually you should probably go to church and pay tithings. But let's not confuse church and state.

The good news, as home owners we can deduct mortgage interest (not principal) that you pay on a loan secured by your primary residence or a second home. Also note that most Recreational Vehicles, "RV's" are considered a 2nd home. To claim the deduction, you must be obligated to pay the debt and you must actually make the payments on this mortgage.

You can even deduct taxes you pay on real estate you own that is not used for business. If you have a mortgage on the property, the annual mortgage statement (Form 1098) you receive from the bank should include both the amount you paid in real estate taxes for the year and the interest and points you paid for the year (your mortgage interest deduction).

Lastly, if you use a portion of your home exclusively for business purposes, you may be able to deduct home costs related to that portion, such as a percentage of your insurance and repair costs, your mortgage or rent and depreciation.

I'm no professional when it comes to tax counseling, so please consult with your CPA, Tax Man or Woman and all tax laws for further information! And if you need a recommendation or have a referral, I'm always here to talk. So please give me a call or send me an email. Hey, ever wonder why our streets are not paved in gold with all these taxes we pay?

Written by Greg Hetrick, REALTOR®
Wednesday, March 21, 2007

Southern California: Who Wouldn't Want to Live Own Here?

If you're a first-time buyer you are not alone. But you're no dummy; I don't have to tell you something you already know. Just drive through any South Bay neighborhood on a sunny weekend afternoon and you'll find many open houses packed with young couples and families seeking to buy the American dream. I know first hand, I use to be one of them not long ago. You're tired of your tiny apartment, or sick of paying rent on a highly valued ocean view condo, or maybe it's your parents wondering when you'll ever move out and take your newlywed with you!

Don't be discouraged by your "competition", meaning those other buyers who are anxiously browsing a house that maybe you are already picturing yourself living in. You know... the one with the white picket fence, the new paver driveway, a bright green lawn, the sparkling remodeled kitchen with stainless steel appliances and granite counters, a park-sized backyard and a spare room that looks perfect for the expecting baby.

Maybe you are approached by a real estate agent who asks if you are pre-qualified, and you stumble to answer, "Pre-what", you ask. The real estate agent rudely replies, “qualified!”, you know pre-qualified. Or, sometimes you can't find the sales agent because there are so many people viewing the open house it looks like a party without a keg. Wait, I know, you're embarrassed to ask the sales price, assuming the sales agent will think you can't afford because of the way you are dressed, or the car you pulled up in when approaching this house.

If you are serious about buying your first home, then you need not to worry. You'll do what it takes and it'll happen when you've found the right person to work with and have educated yourself on the steps-to-owning. Understand that many of the people you see viewing an "Open House", on a Saturday afternoon are often the neighbors, financially under qualified dreamers, friends of the sellers, other real estate agents and many people just like you (but are they serious and educated about what they are doing?). You can be!

According to the California Association of Realtors (C.A.R.), only 25 percent of households could actually afford to buy an entry-level home in California during the last three months of 2006. Not to mention it takes some financial backing to make such a purchase. Here are the facts from C.A.R.:

"The minimum household income needed to purchase an entry-level home at $477,400 in California in the fourth quarter of 2006 was $96,760, based on an adjustable interest rate of 6.36 percent and assuming a 10 percent down payment. First-time buyers typically purchase a home equal to 85 percent of the prevailing median price. The monthly payment including taxes and insurance was $3,230 for the fourth quarter of 2006."

If you've read the above and can relate, then you're probably seeking to buy a home in the near future. Be sure to check out the information found within my website. It's packed with tips for the first-time buyer. If you have any questions, please feel free to contact me.

Written by Greg Hetrick, REALTOR®
Wednesday, March 07, 2007