Did you know that the current tax cuts are set to expire at the end of this year? What does that mean? Well, taxes are going up as of January 1, 2013 because the current tax cuts are set to expire. Ordinary income tax rates and capital gains rates are going up. The good news is that you can plan ahead.
For those who are considering whether or not to sell their home this year or next year, this impending increase in the capital gains rate could be of interest to you because the current federal capital gains rate on real estate is only 15% (which is expected to increase to 20% or more in 2013).
Sellers on the Westside and in beach communities throughout LA county are becoming aware of this tax increase and planning ahead. They understand that the market has shifted to become a Sellers' market and that a number of buyers lost in the bidding wars over the summer. So what does that mean? It means that Sellers still have a substantial amount of negotiating power during the third and fourth quarters of 2012. It is also good news for buyers because it means that there will be homes on the market during the Autumn and Winter months.
If this is the first time you're hearing about this tax increase, do not fret. The immediate impact will be on individual homeowners who will earn more than $250K in capital gains or married couple homeowners who earn more than $500K in capital gains from their sale. (Sidebar: This tax increase more often than not will affect those who are retiring and downsizing and/or those who are great real estate investors.) If you fall into this category of sellers, do not fret because there is still time to plan ahead. (www.marcel.kwrealty.com)
For more info about these tax increases, check out this article:
http://www.inman.com/news/2012/08/8/high-end-homeowners-rushing-beat-2013-tax-increase
Tuesday, August 28, 2012
Monday, August 20, 2012
Thinking of Buying a Fixer Upper?
Some of my clients have expressed interest in buying a "fixer upper". Often times, buying the "ugly duckling" in a nice neighborhood is a great investment because you get to buy a home that is priced well below what the house will sell for after the renovations. One hurdle with a "fixer upper" can be the cost of renovation.
Did you know that there is financing available to assist you with the renovations whether you plan to live in the house or just be an investor? I'm talking about a financing that could be less expensive than a home equity line of credit (HELOC) on the acquired property. With some loan programs, the renovation costs can be rolled into the loan you use to acquire the property.
Have you heard of any of the Renovation Loan programs?
1) Homestyle Renovation Mortgage allows you to make renovations, repairs and improvements totaling up to 50% of the as-completed value of the property with a first mortgage rather than a second mortgage, home equity line of credit and other more costly financing. The funds can be used for any repairs or renovations that are permanently affixed and add value to the property. Your lender must be approved by Fannie Mae to offer this product, and there are some major players, such as Wells Fargo, that still offer it.
2) There's also the FHA 203K loan. This program is great because it could allow you a maximum mortgage amount of $729,750 with only having to put 3.5% down and possibly roll in your closing costs and repair costs. The loan cannot exceed 110% of the "as-improved" value of the property. Up to 6 months of the mortgage payments can be financed while the home is renovated and uninhabitable
If you'd like to find out more about either of these programs, I am more than happy to connect you with some of my preferred lenders. I also can help you with some of the other nuances of buying a "fixer upper". Feel free to call (310.482.2414) or email me (marcelanderson@kw.com) for more information.
Did you know that there is financing available to assist you with the renovations whether you plan to live in the house or just be an investor? I'm talking about a financing that could be less expensive than a home equity line of credit (HELOC) on the acquired property. With some loan programs, the renovation costs can be rolled into the loan you use to acquire the property.
Have you heard of any of the Renovation Loan programs?
1) Homestyle Renovation Mortgage allows you to make renovations, repairs and improvements totaling up to 50% of the as-completed value of the property with a first mortgage rather than a second mortgage, home equity line of credit and other more costly financing. The funds can be used for any repairs or renovations that are permanently affixed and add value to the property. Your lender must be approved by Fannie Mae to offer this product, and there are some major players, such as Wells Fargo, that still offer it.
2) There's also the FHA 203K loan. This program is great because it could allow you a maximum mortgage amount of $729,750 with only having to put 3.5% down and possibly roll in your closing costs and repair costs. The loan cannot exceed 110% of the "as-improved" value of the property. Up to 6 months of the mortgage payments can be financed while the home is renovated and uninhabitable
If you'd like to find out more about either of these programs, I am more than happy to connect you with some of my preferred lenders. I also can help you with some of the other nuances of buying a "fixer upper". Feel free to call (310.482.2414) or email me (marcelanderson@kw.com) for more information.
Monday, August 6, 2012
Shrinking Supply of Homes: Sellers & Buyers Are Happier!
This likely comes as no surprise to those of you who are out there as buyers, but homes throughout Los Angeles are being sold through bidding wars.
The bidding wars for the best homes often lead to the home selling for much more than its initial list price. A recent LA Times article discusses how the inventory of homes on the market this summer in Los Angeles is much less (i.e. about 49% lower) than it was last summer, while 24% fewer homes are listed across the nation this summer when compared to last summer. This may seem odd to you because most would agree that the fundamentals in the economy were not stronger than today.
http://www.latimes.com/business/realestate/la-fi-harney-20120729,0,308220.story
This is good news for both Sellers and successful Buyers in today's market. Sellers are happier because this means that their homes are appreciating in value. Successful Buyers are happy for the same reason. Given the strict underwriting standards of Lenders, the fundamentals for your home's appreciation are real.
As we go into the final stretch of the summer, feel free to contact me if you want to sell your home or if you want to win a bidding war for your dream home. marcelanderson@kw.com and 310-482-2414.
The bidding wars for the best homes often lead to the home selling for much more than its initial list price. A recent LA Times article discusses how the inventory of homes on the market this summer in Los Angeles is much less (i.e. about 49% lower) than it was last summer, while 24% fewer homes are listed across the nation this summer when compared to last summer. This may seem odd to you because most would agree that the fundamentals in the economy were not stronger than today.
http://www.latimes.com/business/realestate/la-fi-harney-20120729,0,308220.story
This is good news for both Sellers and successful Buyers in today's market. Sellers are happier because this means that their homes are appreciating in value. Successful Buyers are happy for the same reason. Given the strict underwriting standards of Lenders, the fundamentals for your home's appreciation are real.
As we go into the final stretch of the summer, feel free to contact me if you want to sell your home or if you want to win a bidding war for your dream home. marcelanderson@kw.com and 310-482-2414.
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