I want to buy, what's my first step?
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Get Pre-qualified. Even better, get pre-approved. Your lender will help you determine how much you can afford. Don’t waste time and become frustrated looking at homes that are out of your price range. When you find your home and an offer is presented, the sellers will consider your offer more seriously if you are pre-qualified or pre-approved. |
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Hire a reputable and experienced agent to assist your research. We search for properties for you after getting to know your needs and wants. We will email, fax, call or mail you the information, show you the home, write up the offer, present it and once under contract coordinate the escrow. |
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Be prepared to write up a non-contingent offer. If you have a property that you need to sell, it should be in escrow waiting to close or already sold and closed (See below I’m afraid to sell my house first). |
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Be available AT ANY TIME to look at properties. Hot properties will not wait until the weekend before they sell. They sometimes sell in less than 24 hours, especially bank owned properties.
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How do I get Pre-Qualified?
It is easy to get pre-qualified. Best of all, it doesn’t cost you a dime. Use a lender (like a bank) or a Mortgage Broker. The difference? A bank is a single lender institution. A mortgage broker will take your loan application and farm it out to several lending institutions for approval and shop for the best interest rate for you.
How are Agents Paid?
In the state of California, sellers normally pay commissions. This covers both the buyer’s and seller’s Brokers. Your agent should diligently work for you and search for properties with the agreement that you will allow him/her to write up an offer and negotiate on your behalf. An accepted offer by the seller of a listed property pretty much ensures your agent will get paid. But your agent does not get paid if you do not buy with them. All the work they do prior to you buying,is done for free! They don't get paid unless you buy, so be loyal to your agent, don't call or use other agents, once you have chosen a dedicated professional who is working for you for free. You should feel comfortable and informed with the agent you are using, if not, explain this to them, if they don't make you feel right, tell them and get a new, professional agent you feel is working for you. But be fair, let the agents know if you aren't happy, most agents will immediately fix whatever is bothering you.
Should I use several agents to help me find a home?
Excellent question! I don’t recommend it. All agents have access to the same multiple listing information. Using multiple agents causes unnecessary overlaps of information and creates confusion as to who is representing you (and who gets paid!) This makes agents less committed to you. Hire an agent you know who will diligently search for your new home and get information to you promptly. Good negotiating skills are vital too when you select an agent. Ask for references and call them, ask about awards they have won, find out how successful they are. Although new agents can also be very good, experienced agents will know more tricks and skills to ensure a successful escrow.
I'm not sure what I want to buy? What do I do?
Create a wants/needs list. If you’re looking for the absolute perfect house, the chances of finding it are slim and you will be setting yourself up for disappointment. By developing a practical list, you increase your chances of finding several homes that meet your needs. Remember, a home is an investment in your future…you’ve got to start somewhere. Get the most you can afford now. It will appreciate over time and you can always move up as your financial ability grows. A real estate professional can further assist you in determining your personal and financial needs.
What are the Tax Laws on capital gains?
 Tax Free Capital Gains
In sales of principal residence, gains up to $500,000 for married couples ($250,000 for singles and married couples filing separately) are tax-free. This generous break can be "recycled" every two years. You must have owned the home and used it as your primary residence for at least two of the five years preceding the sale.
Buy A Fixer And Sell It For Profit
Now is the time to do it! You can profit and live in the house for two years, do repairs and then pay no federal taxes on profits up to $500,000 ($250,000 for singles.) Like the profit? Buy another house and do it again!
Exclude Gains Under The New Rule
Are you sitting on a hefty gain that could be excluded under the new rules? Think seriously about selling. Replace the house with a less expensive one and invest the leftover cash. Don’t waste time. This rule is so favorable, it’s almost too good to be true!
Hint: On expensive properties, another option is to sell now and pay gains on the profit above $500,000 ($250,000 for singles.) Then, repurchase and watch your tax free equity grow (the repurchase adjusts your basic back down) because you fall under the $500,000 ceiling again. Always consult your accountant or tax attorney prior to buying.
- What qualities should I look for in an agent?
- Look for an agent with at least 3 years of experience and sells a minimum of $4 million per year. This minimum standard suggests an agent is experienced in negotiations and understands the closing process. Agents who do more business have more "pocket listings" not yet on the market. You might get first chance at purchasing.
- Ask what technology they use to find homes for you? Good agents use a variety of resources, such as multiple listing, direct prospecting and in-house matching to ensure you write up an offer quickly, before it’s sold to your competition!
- What systems or programs do they provide for buyers? What systems keep you on track toward a successful purchase? What technology do they have to search for new properties? What options do they offer for receiving daily updates…fax, call, email or mail?
- Ask for a reference list of past clients and review their list of testimonials Although a track record doesn’t guarantee future performance, I can’t think of a more meaningful measure of a qualified professional.
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