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Bridget Alves                of Valencia

Blog - Full Service Real Estate Group, Inc

HOAs – What you need to know before moving in

Bridget Alves - Monday, February 22, 2016


If you’re moving into a newer neighborhood, odds are good that you’ll be a member of a Home Owner’s Association. These associations were created with the intent to keep one bad neighbor from tanking the property values of the homeowners around them; which isn’t bad, all things considered. After all, who wants to get a significantly lower price for their home just because the guy down the street likes to keep a variety of car parts on his lawn?

 

Know the rules and regulations before you move in

Some HOAs are relatively lenient, with rules and regulations in place that govern what you can and can’t do with your home and still allowing you a decent amount of freedom. Others, though, have very stringent rules that may be more than you can handle. Knowing exactly what you’re going to be dealing with before you move in is absolutely crucial. It’s not unheard of for an HOA to fine a resident because they have too many pets, or the automobile they keep in their driveway isn’t new enough.

 

If you don’t like a rule, try to get it changed

If your children have their hearts set on a jungle gym in the backyard, but your HOA doesn’t allow them, talk to your neighbors. The rule may have been intended to keep people from building structures in their backyards that lend themselves to a lot of outdoor parties that disturbs the peace of the neighborhood. If you speak to your neighbors, it may be possible to change or amend the rule to allow for a swing set and a slide.

 

Do not take personal gripes directly to the HOA

The HOA is designed to keep the neighborhood from changing too much, to keep property values up, and to ensure that everyone living in the neighborhood is able to live peacefully without stepping on each other’s toes. This last bit often ends up with an individual filing a complaint with the HOA for even the most minor of neighborly transgressions. For example, if you have a neighbor who often entertains, and their houseguests are outside late at night making noise, don’t run directly to the HOA. Instead, try talking to your neighbor first. If you approach them respectfully and are willing to compromise, it’s likely you’ll be able to come up with a solution without getting the HOA involved.

 

If you can’t change the rules, follow them anyway
America was founded on rebellion and revolution. It’s in our blood to take a stand against things we see as unfair or unjust. When it comes to the HOA, though, it might not be worth it. When you choose not to follow the rules, regardless of what your feelings are as to their validity, the HOA can, and will, take you to court. Most of the time, they win.

How to buy a home you and your spouse both love

Bridget Alves - Monday, February 15, 2016


Regardless of how similar two people are, or how many interests they share, once they’re married, compromise will come into play on a variety of topics, especially when buying a home. Perhaps one of you is in love with vaulted ceilings and bay windows, while the other prefers a cozier, less open home. With both of you having to live in the home you buy, being able to agree and make compromises will be crucial to your long-term happiness in the home you share.

 

Before you even start looking for homes, make sure to be open about your feelings; what you do/don’t like, and what you can/can’t live without. Knowing what the both of you want beforehand will allow you to look for homes that include some/all of these things. If you don’t communicate what you’re looking for to each other, you may find that the both of you are looking for very different things, which can lead to a lot of headache.

 

If both of you tend to be impulsive, you may be in for trouble. Buying a home is a huge investment, and when you buy based on emotion instead of reason, it can lead to financial difficulties down the road. Be sure to set firm amounts in terms of buying prices and mortgage payments that you know the two of you can afford, especially if you’re living on a single income.

 

Be willing to compromise, and don’t take advantage of your partner’s willingness to do so. If you and your partner find a home and both agree that it’s the home of your dreams, congratulations! Also, be careful not to pinch yourself because, odds are, you may be dreaming. In reality, different people will resonate with different things. As mentioned above, some folks love homes that are illuminated all hours of the day with natural light, while others may prefer a little more control over their surroundings. Either way, if one of you appears to be making more concessions than the other - be careful! Things like that can lead to resentment down the line. Also, living in a home you don’t like could ultimately leave one person feeling depressed.

 

As long as the both of you are able to communicate with one-another effectively and are open with your feelings, odds are you’ll find a home that both of you will be happy with.

Why you shouldn’t set your asking price too high

Bridget Alves - Monday, February 08, 2016


In any purchasing situation in which a price isn’t set in stone, asking for a higher price than the merchandise is worth in order to give you some wiggle-room isn’t the worst strategy one can employ. After all, setting the price high leaves you with a chance to get even more than the home is worth, so why not give it a go? This strategy can sometimes be effective, but it can also be disastrous in a number of ways. Here are a few things to consider before you set the price of your home.

 

Pricing high can lead to a dearth of offers

If you live in a neighborhood with several other homes for sale, you want to be very, very careful with how you set the price of yours. Intentionally setting a high price for your home may well send potential buyers to your neighbors’ homes with prices closer to market value.

 

Potential buyers know what you’re up to

Savvy home buyers are going to do their due-diligence when it comes to looking for a home. As such, most of them are going to have a ballpark figure, at the very least, of the value of the homes in your neighborhood. When they see one home with nothing special to offer that’s priced significantly higher than the surrounding ones, it can be a significant red-flag that sends a message telegraphing your intentions to get as much as possible for the house.

 

Your strategy works against the buyer’s
For every seller looking to get top-dollar for their home, there are at least ten buyers looking to get a great deal. When a seller sets the price of a home high, it usually indicates that they’re looking to get, at minimum, market value, while buyers are hoping to get the home at something below that. If you’re looking to get market value for your home, sometimes it’s just best to set the home at the price you’re asking and remain firm when buyers attempt to lowball you.

Tips for writing a tantalizing offer on a home

Bridget Alves - Monday, February 01, 2016


Finally, after attending open house after open house, cruising myriad online listings and driving around countless neighborhoods, you’ve decided on the home you want to purchase. Congratulations! However, deciding on a home is only the first step. Next, you’ll need to make an offer. While there’s no sure-fire way to ensure that your offer will be accepted, there are a few things you can do to make your offer more attractive to the seller.

 

  • First, consider how you approach the seller. You’ll want to come from a well-informed position of strength, so consult your real estate agent about similar homes and sales in the area. By doing this, you’ll have a better idea of the seller’s asking price in relation to similar homes that were sold in the area and where their asking price sits.
  • Next, if the home is in need of any updates or repairs, take care in deciding whether or not you want to ask for the seller to make these changes or if you’d rather do it yourself. If the home has been on the market only a short while and has garnered a lot of attention, asking the seller to make any repairs might put your offer lower on the list. However, if the home has been on the market awhile, or if it hasn’t gotten much attention from potential buyers, the sellers may be willing to work with you to finally get their home sold.
  • Think with your head, not with your heart. If you’re thinking of bidding on the home of your dreams, your emotions may push you in a direction that your reason would not. If a mortgage is in the cards, it’s likely your lender has a specific ceiling in place in regards to how much they’re willing to lend you, but that doesn’t necessarily mean that you’ll be able to comfortably afford the payments on the maximum amount you’re qualified for. That being said, if you find yourself in a place where you’re starting to think about re-aligning your budget to be able to make a higher monthly payment that you originally expected, then you may well be taking the first steps down the road to financial ruin.

 

Making an offer on a home can be stressful, and as previously mentioned, there’s no guarantee that your offer will be accepted. Be ready to haggle a bit, but make sure that in the end you don’t wind up overpaying because your heart did the thinking for your brain.

Some advice to help sell your home fast

Bridget Alves - Monday, January 25, 2016


The decision on the part of a buyer to purchase a home can depend on a number of things like the home’s location, its relative value, and the phase of the moon (hey, we don’t judge!). With so many things out of your control, there are only so many things that you, as a home seller, can do to speed up the sale of your home. That being said, here are a few things you can do that are designed to help your home sell as fast as possible.

 

Price the house right from the outset

Those who price their homes for more than they’re worth, with the intention of playing the haggling game with prospective buyers are shooting themselves in the foot if they want to sell their home quickly. Savvy buyers (or those with the help of a real estate agent) are going to notice that the home is priced higher than it should be, and be able to see right away what the seller’s strategy is. In cases like this, some buyers will either attempt to lowball the owner, or forego making an offer altogether. When you price your home for what it’s actually worth from the get go, you’re not only offering the home at a fair price, but it creates an air of trust and honesty between you and the would-be buyer.

 

Enhance the curb appeal

The first thing a prospective buyer is going to see is the outside of your home, so make that first impression a good one by giving the lawn a little TLC. Whether you decide go the distance by re-sodding the grass, planting flowers, and adding new paint and fixtures will be up to you, but unless your yard is already immaculate, giving it some attention may go a long way.

 

De-clutter and de-personalize the interior
You don’t necessarily need to get all of your things out of the home before you sell it, but make it a point to get rid of the unnecessary pieces of furniture. Things like end tables, bookshelves, night stands, dressers, etc. All of these can go. Additionally, remove personal items like photographs, paintings or whatever else you have decorating the home. You want to give prospective buyers the opportunity to envision their own items in the home, not yours.
No matter what you do, there’s no guarantee that a home will sell fast, but by following the examples above, you won’t be hurting your chances any. Also, make sure you’re familiar with the local market and speak with a real estate agent if you have any questions.

How to make the most of an open house

Bridget Alves - Monday, January 18, 2016


Despite the increased ability of the internet to assist in home buying, open houses have been, and will continue to be, a widely used and successful tool in the selling of a home. While holding an open house as a seller has one set of rules and practices, what can you do, as a buyer, to maximize your experience when attending an open house?

 

Observe the other attendees

If you want to get a feel for the home, watch what other people are doing before you even enter. Are they quickly walking in and out? If so, that could indicate that the home has some significant issues. Once you enter, take a look around and see how engaged the other buyers are with the agent showing the home. If they’re asking a lot of questions, it could indicate that the home is a popular listing.

 

Ask questions

The real estate agent at the open house is a wellspring of information about the home, neighborhood, and market in general and making use of their knowledge can be of great benefit to you. Some key questions you should ask are: why the seller is selling the home, if there have been a lot of showings, and how long the home has been on the market.

 

Evaluate the agent

Real estate agents help clients both buy and sell homes, and when attending an open house, you’ll have direct access to the agent there. When asking questions, pay attention to the agent’s demeanor, knowledge and personality. If you happen to hit it off, you may be able to begin a working relationship and utilize that agent’s services in finding a home.

Gifting down payments: The nitty-gritty

Bridget Alves - Monday, January 11, 2016


Gifting the down payment of a home is a trend that’s been growing increasingly common. Because it’s a gift, it doesn’t affect a borrower’s interest rate, but it also doesn’t count as income when lenders are determining whether or not an applicant qualifies for a mortgage. That being the case, for those who are in a position to gift the down payment of a home, here are some things you’ll likely want to know before you do it.

 

For starters, lenders are usually more than happy to allow gifting the down payment to a piece of property that is occupied by the owner (i.e. a residence), but usually won’t allow it for investment properties. Also, when a down payment is gifted, additional paperwork will be required on the part of the giver to ensure that the money doesn’t come from illicit sources.

 

The next big hurdle is the gift tax. It’s possible to gift someone up to $14,000, however any higher amount will be taxed by the IRS. There are a few ways to get around the gift tax, though. For one, it’s possible to gift someone up to $56,000 by making four separate gifts of $14,000. Additionally, one parent can gift $28,000 to someone, and then when both parents file their taxes, they agree to split the gift (thereby equaling $14,000 a piece, and not triggering the gift tax).

 

Another thing that needs to be known about giving gifts: they’re permanent. Suppose you give your child $56,000 towards the down payment of their first home and they instead choose to invest that money in a business venture that fails. Tough luck. Once you gift someone money, it’s out of the control of the giver unless alternative arrangements are made in the form of legally binding contracts.

 

No matter what, before gifting any significant amounts of money, always talk to your CPA to find out exactly how it could affect your taxes and finances as a whole.

The hidden costs of home buying

Bridget Alves - Monday, January 04, 2016


When shopping for a home, many would-be buyers make the all-too-easy mistake of looking at the asking price of the home and thinking that’s all they’ll have to pay. Unfortunately, that’s not the case. Whether you give the buyer what they’re asking for the home, or luckily end up getting a lower offer accepted, there are a number of costs and fees that are going to drive up the total cost of the home.

 

The first cost you’ll likely come across is for that of a home inspection. Before a sale closes, some mortgage insurers will require that the home be inspected – a service which usually costs several hundred dollars. If an inspection isn’t required, it might just be worth it to have one done anyway. The hundreds you spend on an inspection can sometimes save you tens of thousands on repairs down the road.

 

According to Benjamin Franklin, the only certainties in life are death and taxes. Nowhere is this more true than when buying a home. Not only will you need to pay taxes on your purchase, but the government would like you to pay those up front – so be prepared to include taxes in the amount of your home loan. Actually, while you’re at it, make sure to include any survey fees and escrow costs into your loan, too, as these are usually required to be paid up front as well.

 

There are a number of fees that will need to be paid at closing, aside from the costs listed above. These fees include government recording charges, appraisal fees, credit report fees, title services, tax service fees, and lenders origination fees. If you’re starting to get worried that the closing costs and fees will price you out of the market – don’t be. Lenders are well-aware of the costs associated with buying a home and will help ensure that your mortgage covers what needs to be covered. However, paying what you can out-of-pocket isn’t always the worst idea, as you can save a significant amount of money over time via paying interest on a smaller loan.

What to do before searching for a new home

Bridget Alves - Monday, December 28, 2015


Do you know why they show so many court scenes on TV shows and in movies involving lawyers? It’s because that aspect of lawyering is the most interesting and dramatic. In reality, being a lawyer usually involves a ton of research and bookwork done in an office setting before a case ends up going to trial; and often times, cases don’t even get that far. The process of buying a home can be similar.

 

When buying a home, the looking at new places and imagining your things in all the nooks and crannies is the part that yields the most fun. But, there’s a lot of work to be done before you get to that point. This point is especially true after the Dodd-Frank Act took effect in 2014 requiring that prospective homeowners provide legitimate proof that they can actually afford the home they’re looking to buy. So, what steps do you have to take before you can start shopping for a new home?

 

File your taxes

Lenders will always want to see your most recent tax returns to verify your income. So, if you’re home shopping in the first quarter of the year, file your taxes first. If you’re planning to file extensions with the IRS, make sure you have alternative (and recent) documents that will verify your income.

 

Get your financial statements in order

W-2s, previous years’ tax returns, and 1099s are going to be needed to verify your income, and it can seriously limit stress levels if you have these things handy before you’re asked for them. If you own a joint business, you’ll need a corporate tax return for the past 2 years.

 

Check your credit!

If you have the luxury of time, check your credit and fix anything you can at least 6-months before buying a home (though a year can be even better). You don’t necessarily have to pay anything off completely, but just make sure everything is current and that there aren’t any errors on your report.

 

Look into the housing market
Once your finances are in order, you’ll want to start your search for a new home by checking out the market. Are home prices rising? Falling? Is now a good time to buy? How easy is it to get a loan? These are all questions you will want answers to before wading into the pool. If you’re not sure how to find answers to these questions, well, a good real estate agent will be more than happy to help you.

How to help your kids buy their first homes

Bridget Alves - Monday, December 21, 2015


With the holiday spirit in the air this time of year, it’s hard not to think of what you can do for people – especially when it’s your own family. Whether it’s a wedding gift or a Christmas present, parents with the funds available are often using them to assist their children with buying their first home. If you yourself have been thinking about doing so, here’s a few ways you can do it.

 

Family loans
Those who have sufficient assets can loan money to relatives for the purchase of a home in lieu of traditional mortgages. Situations like this can be profitable for the lenders because they’ll typically get a better interest rate than they would on a typical investment vehicle from the bank like a CD. On the side of the borrowers, the fact that they answer to mom and dad instead of a financial institution might help should financial difficulties arise. When someone loses a job, the mortgage is still due. If the lender is in the family, though, they might be more willing to negotiate something that will help their relatives out.

 

Though it’s coming from family, the loan will still follow the IRS’s proscribed interest rates based on the term of the loan. If the loan isn’t intended to be an investment, and the lender isn’t interested in earning interest, up to $14,000 in interest can be forgiven each year under gift tax exclusions (or up to $28,000 if gifted as a couple). Any interest earned above this must be reported to the IRS as taxable income.

 

Co-signing the mortgage

If your child or relative’s income is too low to qualify for a mortgage, co-signing can help. When co-signing, the parents’ income will be under just as much scrutiny as their kids’, and in order for a co-signing to be successful the parents must be able to show that they can take on the burden of home payments if the children are unable to. Also, the loan will show up on the credit report of the co-signers as an outstanding debt, making refinancing difficult down the road.

 

The holiday season can bring out the generosity in us all, but before assisting your children or relatives with the purchase of a home, make sure you consult a financial adviser.

Helpful tips & hints

 

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