In brief, the best time to buy a property is when you’re ready to buy. Ready financially, prepared emotionally and motivated circumstantially. If you are buying a home for the long game, and you have saved the required down payment and can afford the subsequent monthly payments, variables such as current interest rate and fleeting market trends are less of a concern than for someone who plans to buy a property and sell it rapidly.

With the right purchase, your property will inevitably realize increased equity over time. Additionally, you will incur tax deductions that equal big IRS savings to you. If prepared, you will not regret making the decision to buy.

Generally, the alternative is to pay someone else’s monthly mortgage while they earn the equity with your rent payments.

The simple answer is, the time is now. As Southern California residents, we don’t have the same seasonal issues that other areas of the United States deal with. Sure, we have a little rain here and there, but we don’t have ice and snow and brutally cold temperatures like in other regions. Buying and selling season are essentially timeless in SoCal, with the possible exception of Thanksgiving and/or Christmas weeks, listing is an activity that can and does occur any time of the year. 

Yes! Now that interest rates are trending downward, buyers are showing up at open houses and according to recent statistics, prospective buyers are doubling down and pre qualifying for loans in droves once again. This equals “prime time” for sellers.

There are certain steps to consider in an effort to prepare your home for listing and garnering abundant buyer attention. I’ll address those necessary steps in a subsequent posting. Or, as always, please reach out to me at your convenience and we can discuss next steps for listing your property when we talk!

Yes, if you have significant equity in your current property and you wish you purchase a replacement property prior to selling your current home, there are definitely some solid and appealing borrowing options available to you. There are numerous variables when considering this option, please contact me at your convenience and we can begin the conversation.

It depends. If you bought your home less than 2 years ago and made a profit on the sale of the home, then yes, you will have to pay Capitol Gains taxes. If you bought the home as a rental/investment property and never lived in it, you may have options. You can opt to participate in a 1031 exchange to divert taxes if you buy a “like” property or, you can sell outright and pay Capital Gains taxes on the net a profit.

If you bought your primary home sometime within the past 5 years and lived in the home as your primary residence for a at lease a 2-year period of time during the last 5-year period, then odds are you won’t have to pay Capitol Gains Taxes. The 2 years of living in the residence does not have to have been consecutive, it can be cumulative, as long as it was 2 years during the most recent 5-year timespan.

As an individual, you are allowed up to $250,000.00 in untaxed gains if you fall within the aforementioned category. If you are a married couple, and file taxes together, you are allowed up to $500,000.00 in untaxed gains if you meet the (2yr/5yr) criteria. However, if your profits exceed the limits, you will be responsible for Capital Gains taxes on the overage of limits allowed.

Capital Gains tax rates are dependent upon your income bracket. In general, Capital Gains tax rates will be somewhere between 0%-20%, should you owe the tax. The average amount paid is 15%.

Some borrowers can qualify for a loan with as little as a 3.5% down payment. Common down payment amounts are 3.5%, 5%, 10%, 15%, 20%, and so on.

Depending on the amount of money a qualified buyer has saved and/or choses to part with. The smaller the amount of down payment, the more likely the lender will be to impose an additional small monthly fee called a PMI (Private Mortgage Insurance).

A PMI (Private Mortgage Insurance) is a small monthly fee that might be required for a certain period of time during the initial years of a loan, as assurance to the lender that an unpaid default will not occur during the low equity bearing period of the loan. The (PMI) insurance will pay the lender, should the borrower default. With the PMI, the lender therefore minimizes their risk of providing a top-heavy loan on a low equity asset. The lender-imposed PMI can be removed once the property has acquired 20% equity, or more, but not before a 2-year period of time.

I can speak to this more in a future post, or, as always, please feel free to reach out to discuss with me anytime.

Yes! You can purchase an income producing property (up to 4 units) with a conventional/conforming home loan. As a result, a lower (as low as 3.5%) down payment is a possibility and the loan limit for such a loan is available for up to $1,149,825.00. Higher loans (called Jumbo loans) are available, with a higher down payment from the borrower.

PMI’s will (or should) roll off automatically once your mortgage balance reaches 78% of the home balance, or ½ way through the loan term.

There is a way to have a PMI removed sooner than the automatic roll off. It requires a few extra steps to have it removed, but can be well worth the effort if you qualify!

Some of the requirements include: Minimum of 2 years of a Good payment history, No additional liens on the property and proof that the loan is 80% (or less) of the current value. A written request will be required and an appraisal will be ordered by the lender if they agree to review the request.

Exact amounts for property taxes may vary slightly from community to community. This is because different cities, counties, districts may have additional taxes that are specific to the area.

A general rule of thumb that is used for calculation purposes in the SoCal Region for property taxes is 1.25% of the assessed value of a property. If you are purchasing a property, you can assume that the assessed value of that property for that year will be the purchase price you paid when you bought it.

So, for example, let’s say you purchased a property for $1,000,000. Your property taxes for that the year ahead will be calculated at the purchase price of $1M and will be approximately $12,500.00

Property taxes are due annually, in 2 installments, one in December and the next in February. Many homeowners, with a loan, opt to incorporate their estimated property taxes into their monthly mortgage payment. This is called an impound account and the received impound funds are held in a lender escrow account, until the taxes are paid on your behalf at the time they are due.

Typically, if a borrower puts less than 20% down on a home loan, the lender requires this impound method of property tax payments. There are exceptions to this rule of thumb, but generally this is how it’s handled. Property insurance is typically handled the same way as well. By controlling the payments, the lender minimizes their risk of default tax payments and property insurance coverage.

There sure are! It pays to be older, sometimes. ☺ If you are 55 or older, a CA resident and decide to sell your current home in CA and subsequently purchase a replacement home in CA, you will enjoy a property tax transfer benefit.

I will provide an example that should make it somewhat self-explanatory.

Let’s say you bought a home in 2003 for $360,000 and you are selling it today for $1,050,000.00 <<< These numbers are arbitrary and only selected for the sake of an example.

Let’s say you now purchase your new home (within the required 2 year time frame) and you purchase it for $800,000 or $900,000.00 or $1,000,000 or, or, or, or …

Your property tax rate will remain at the same property tax rate that you were paying for the primary home you purchased in 2003 for $360,000.

Each year a property “assessed value” is subject to change slightly, so the tax rate transfer is not as simple as saying you will pay taxes on the original $360,000.00 purchase price you had in 2003. That same $360,000 property may have a current “assessed value” (for tax collector purposes only) of perhaps, $550,000 due to annual incremental government assessed value increases over the years and/or property tax increases that occurred due to property tax reassessments imposed because of permitted construction/home improvements made to the property over the years. Notwithstanding construction/improvement based property tax reassessments, there is a maximum annual property tax increase that can be imposed each year.

First and foremost, finding affordable land anywhere in Los Angeles County is nearly impossible. Even expensive land is difficult to come by. Vacant land is a scarce commodity in Los Angeles County so if you find land you can afford and is available in a location you might want to build on at a later time, snap it up! It won’t be there long if it’s a buildable lot!