Submitted an Offer on Your Dream Home.. Now What?

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Time for nervous Anticipation. You’ve found the home you want, and you are excited. Yet you want to be calm and objective as possible. Be prepared for counter offers. Don’t let the pressure get to you. Remain patient Let your Realtor® act as your liaison with the seller and their Realtor®. Keep in mind, you may need to be flexible on price, closing date, appliances and repairs. Beware of putting contingencies in your purchase agreement. They weaken your offer. However, if you currently own a home your offer may need to be contingent on it selling first. Or if you’re uncertain about the structural integrity of the home, you may want a have a home inspection contingency. Keep in mind any contingency could take you out of the running if a non-contingent offer is also presented.
Once your offer is accepted, be prepared to open escrow and seal the deal with some earnest money. Earnest money is usually a percentage of the homes’ purchase price that indicates you’re serious about the purchase and indicates your good faith. It’s generally applied to the purchase price when you complete the purchase, but may be forfeited to the seller, if you fail to complete the purchase. Many first-time buyers may be taken by surprise when it comes to earnest money, especially if they have to make a fast offer. Check with your Realtor® for the appropriate amount to have, at the ready in your checking account.
Now that you have a fully executed purchase contract, know that there will be more than 50 tasks and deadline deliveries that will need to be completed within a “normal” residential real estate transaction. It will be your Realtor® responsibility to make sure the processing of all documents are complete and all deadlines are met.
The process of taking a signed purchase contract through to closing involves a great many details, deliveries, and document submissions. Coordination of this process is of critical important and involves several other professionals besides your Realtor® as stated herewith, to make sure that all phases of the escrow closing process moves along smoothly.

1. Title – A title company is needed to make sure that all documents and deliveries are processed in a timely manner. Your Realtor® will examine all of their title and recorded documents to uncover all material defects and items of importance. This is normally more concern to the buyer, but sellers must be prepared to respond to their objections, so it’s important to know what’s in all recorded documents. Example:  while there are normally a few items in a title binder that can be corrected as they’re recorded and pass with the property, sometimes there are requirements or exceptions that weren’t expected but must be addressed.  With the more careful lending environment, perhaps you have a previous divorce and the lender wants better protection against claims and will require additional documentation from a former spouse.

2. Inspections, Survey & Appraisal – A Realtor’s® job is also to coordinate access for inspectors and the appraiser, and to accept deliveries of reports as well as any objections or correction requirements from the buyers.  Every instance of delivery of an inspection and/or buyer objections requires a response in most cases, and there are deadlines. It is very important to stay on top of these deadlines, make sure reports are delivered on time or extensions are put into place, and that all respond within required time lines. Failure to do so could obligate you to repairs or other corrections or kill the deal.

3. Repair Negotiations – If the buyer submits requirements for corrective actions to items on reports, it is critical to all parties to determine the cost of those requirements and the appropriate response necessary to keep the deal going in a way beneficial to both the buyer and seller. Should one agree to make certain repairs, there will be deadlines associated with completion, and possibly requirements for the buyer’s inspector to return and re-inspect for completion and repair quality. A good Realtor® will keep all of this on track for you, and can recommend contractors who do quality work at fair prices.

4. Lender Document Coordination – One of the leading causes of delayed closings can be a problem with funding due to lender last minute requirements or other document demands. Monitoring all document flows to make sure this doesn’t happen is also just as critical.  It’s not the seller, that is getting a mortgage, but a seller will be very concerned with the buyer’s ability to do so and their lender’s process and ability to meet deadlines and fund at closing. Mortgage problems kill a lot of deals. A good Realtor® is going to be involved in the buyer’s process and will make sure all goes as planned to a successful close. It is the goal of every good Realtor® to exceed the expectations of all involved.
Call us today at (951) 296-8887 and get the information you need enabling you to make an informed, educated decision.
Questions regarding available inventory and/or other real estate matters please contact, Mike@GoTakeAction.com. Mike Mason, Realtor® & Broker/Owner of MASON Real Estate. LIC: 01483044, Temecula Valley resident for 30+ years, Board of Director (since 2011) Southwest Riverside County Association of Realtors® (SRCAR).

MOVING UP OR DOWN? DO YOU SELL FIRST OR BUY FIRST? BEST STRATEGIES…

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Today’s Temecula – Murrieta Move-Up/Move-Down Buyers face many challenges in an ever evolving real estate market.  It doesn’t matter if you are looking for a larger home for your family with more yard for the kids and dogs to play or downsizing to a smaller home with less maintenance…the challenges are all the same, juggling two real estate transactions at once.   Not an easy task for even the most diligent.

Since many of our Temecula – Murrieta neighbors once again have equity in their homes, many are planning on selling one home and buying another, as the local real estate market continues to appreciate.

The local Temecula – Murrieta market conditions can be both a blessing and a curse to the move-up buyer.  While the thought of limited inventory to select a new home from is not something to look forward to, yet when selling your current home you’ll welcome the bidding war that buyers will generate for the right home in the right neighborhood.

The trick, of course, is in managing and even juggling simultaneous transactions – a task that can be both frenzied and daunting to even the most experienced homeowner.  In the worst case scenario not only can the dream home be lost…but the earnest money deposit as well.

While every seller-buyer is different and each have their own personal scenario, unique to them they still must answer the all-important universal question, “Can I afford to pay two mortgages at once if I buy before I sell?  Or do I prepare to move twice, if I sell before I buy?”

SHOULD I STAY OR SHOULD I GO?

The biggest issue about buying before you sell of course, is financing.  With the newest provision of the Dodd-Frank Act that took effect in 2014, even today lenders interpret differently these new federal laws aimed at protecting consumers while maintaining the integrity of federally insured mortgages.  Now more than ever, it’s critical to speak with your lender and investigate how a ‘Qualified Mortgage’ effects your personal situation.

Some move-up buyers will decide to NOT pay two mortgage payments and just go ahead and move in with friends or family…or perhaps rent an apartment or other temporary housing giving them more time to find and buy their new home.

In a “Seller’s Market” like Temecula-Murrieta real estate is currently experiencing, most sellers will not accept an offer contingent on the buyer selling their current home.  However, a good REALTOR® will have some creative options from their tool box of experience to make for a smoother move-up transaction.

THERE IS MORE CONTROL ON THE SELLING SIDE

As a seller, you have two tools that can be used to make the process run smoother.  First, when you list your home, have your agent report to the MLS that the sale of your home is contingent on you being able to find your new dream home.  This will allow escrow to coordinate a dual simultaneous closings.

The other option, when an offer comes in on the sale of your home, a good REALTOR® can negotiate a seller rent-back agreement.  This allows the buyer to close escrow on your home and take title while allowing you to remain in the home until you can move into your new home.

It is fairly common to allow the seller to remain in possession of the property for up to 3 days after the close of escrow without any financial consideration.  More than 3 days, a rent-back should be negotiated.  While the amount of the rent is always negotiable it’s typical to consider the buyers payment and add in a pro-rated share of property taxes, home-owners insurance and HOA dues, if any.   A rent-back payment is intended to keep the buyer whole and not create a profit center.  The buyer’s lender may allow up to 60 days of rent-back; anything more and the buyer’s lender may consider the loan to be for investment property, not allowing owner-occupied financing.  In today’s competitive Seller’s Market most buyers will be willing to cooperate allowing you to find your new home and close your own escrow if the home is priced right and in great condition.

BUYING TECHNIQUES

As a move-up buyer with a house to sell a smart move is to limit your search to homes that have been on the market or 30 days or more.  While this is not a long time in a ‘normal’ market, the seller will no doubt be feeling anxious and probably more willing to negotiate a contingency allowing the buyer to sell their home.  The object will be to convince the seller to believe they are better off accepting your contingent offer than waiting for another buyer to come along.  It should go without saying that a full price offer should be made with few other contingencies and if you want a long escrow, perhaps sweeten the pot with a little extra purchase price.  By having your financing locked in, removing a loan contingency is another strong move that can work in your favor.

A seller may accept your contingent offer with a ‘kick-out clause’ that will enable them to keep their home on the market and if a better offer comes in, they can ‘kick’ your contract with an appropriate notice, giving you the opportunity to move forward with your contract.

As the buyer, having more flexibility in location may work for you as well.  While certain local neighborhoods turn homes quicker than others, there really are NO bad Temecula – Murrieta neighborhoods.  Allowing for some flexibility in location and even features can prove advantageous – without settling of course.

THE DEVIL IS IN THE DETAILS

The most important thing a move-up buyer can do is be prepared…on every level.  As we discussed above, having your financing in place is critical. 

Make sure that the home you’re selling is in the best possible condition, staged to appeal to the widest audience and priced for a quick sale.

The final consideration every move-up buyer needs to focus on is a back-up plan. Always keep in mind the infamous Murphy’s Law, “If anything can go wrong, it will”.  Sometimes ‘Plan B’ turns out to be the best plan, especially if it works out!

Call us today at (951) 296-8887, and get educated! 

For questions regarding available inventory and/or other real estate matters please contact, Mike@GoTakeAction.com.  Mike Mason, Broker/Owner of MASON Real Estate Cal. BRE: 01483044, Temecula Valley resident for 30+ years, Board of Director (since 2011) Southwest Riverside County Association of Realtors® (SRCAR).

IMPROVE THE ODDS OF A GOOD FIRST TIME HOMEBUYING EXPERIENCE

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Preparing to purchase a home can be a period of nerve-racking anxiety for any homebuyer.  As a first time homebuyer you have a course in front of you that is sure to include uncertainty, excitement, confusion and frustration – at times all in the same day, maybe even in the same hour.

By arming yourself with preparation and knowledge you’ll have a much better chance of having a positive home buying experience by ultimately reaching your goal of fulfilling ‘The American Dream’ owning your own home.   

Follow these 7 steps and you’ll be well on your way to owning your own home.

1) KNOW YOUR CREDIT:  The first and perhaps the most important step of preparing to buy your first home is to know and understand your credit.  Reach out to the three big credit bureaus (TranUnion, Experian, Equifax) for a free copy of your credit report, which you’re entitled to, for free, once a year.

First, familiarize yourself with your credit history and make certain that everything is reported thoroughly and accurately.  This should be an ongoing responsibility that you start well before you even think you’re ready to buy a home.  By starting early, you’ll be able to take the time to make any corrections and continue to improve your credit score.

2) TEAMWORK:  Buying a home requires a team of dedicated professionals.  Perhaps the two most important are the REALTOR® you’ll choose and the Lender.

REALTOR®:  Choosing the right professionals is critical.  Certainly an inexperienced first time home buyer should not have an inexperienced agent helping them through the process.  Look for an individual that is imbedded in the local community where you want to live.  He should have professional designations that indicate a pursuit for higher professional standards.  Your REALTOR® should be respected within the local real estate community as most transactions require the cooperation of at least two REALTORS®.

Friends and Relatives DO NOT make the best agent.  Sure there is a loyalty factor that needs to be considered as commissions are in the thousands of dollars.   Some of the worst transactions I have ever witnessed have had emotional attachments of an agent that was too close to the transaction.  It’s personal enough for the buyer and seller, your professionals should not be emotionally attached as well.

Remember, ALL real estate is local, and you’re REALTOR® should be too…for sooooo many reasons.

LENDER:  There are a number of good ways to find a good lender.  You’re Bank or Credit Union probably offer a home purchase loan.  There are lots of discount guys that advertise on the radio and TV and then there are those who come recommend by your REALTOR®.

A successful real estate transaction requires a lot of behind-the-scenes communication and coordination between the REALTOR® and Loan Officer so it may be best to consider your REALTORS® advice and check out one of their lenders of choice.  The lender will value the relationship with the REALTOR® and go above and beyond to make certain the REALTOR® is happy with their performance so they continue to receive referrals.  When you find a lender on your own, you are a one shot commission and may not receive the same level of service.

3) PREAPPROVAL:  The actual process of buying your first home DOES NOT start with searching for your dream home…unless you have the cash to buy outright.  Experience tells us though that most first time home buyers will require a home loan to complete the transaction.

It’s important to be ‘Pre-Approved’ by a lender before you start house-hunting.  The worst thing any home buyer can do is look at the ‘perfect’ home that they believe they can afford only to find out that the bank won’t loan them that much, for one reason or another.

The difference between a ‘Pre-Qualification’ and a ‘Pre-Approval is huge.  A ‘Pre-Approval’ is the process of the lender gathering all necessary documentation and verifying all aspects of the credit application.  This will allow the home buyer and REALTOR® to focus on homes they know they can afford.

4)  BUDGET:  Just because you’re approved for one amount does not mean you have to spend every dime you’re approved for.  Perhaps, with your credit score, income, down payment and debt to income ratio has you qualified for one amount that stretches your budget.  Find a payment that makes you comfortable and stick with it.

Remember, the cost of paying for your new home is not just the principal and interest mortgage payment there will be property taxes and insurance and maybe even Private Mortgage Insurance (PMI).

5)  YOUR LEASE:  Are you currently leasing a house or apartment?  Know when your lease expires and what the penalties are if you broke the lease.  Buying a home is stressful enough and not having to worry about your current living arrangement is priceless.

Have the conversation with your landlord that you are in the process of shopping for and wanting to buy your own home.  Perhaps, your landlord may be willing to sell you the home you are currently renting.

6)  DOWN PAYMENT ASSISTANCE (DPA):  Many perceive these programs to only be available to low income buyers, but many are available for the mid-level income buyers as well through local and state housing authorities.

Some programs offer no-interest loans or grants, with a few conditions attached. When researching the various programs, be sure to ask for a list of lenders who will participate in the programs, as not all lenders will.

7)  INSPECT EVERYTHING:  When you make the commitment to buy a home there is typically an inspection contingency that allows you to inspect every aspect of the home.

You’ll want to know that the roof is good, the plumbing and electric systems are all to code and functioning properly.  Check the foundation for cracks and leaks.  Mold is a big issue, look for any signs of water damage where mold may be growing behind the walls.  Appliances and fixtures all need to be in working order.  So many variables with any home, it’s important that you take the time and invest in good inspectors who will give you an unbiased opinion of the condition of the home you now have in escrow, because of all of your hard work in getting here.

Take the time to plan your purchase and you should be very happy with the outcome.  Rush any of the steps and you’re certain to have regrets.

Call us today at (951) 296-8887, and get educated! 

For questions regarding available inventory and/or other real estate matters please contact, Mike@GoTakeAction.com.  Mike Mason, Broker/Owner of MASON Real Estate Cal. BRE: 01483044, Temecula Valley resident for 30+ years, Board of Director (since 2011) Southwest Riverside County Association of Realtors® (SRCAR).

What Your Realtor® Should Tell You When Listing Your Home!

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Many homeowners today are optimistic about the potential profit they will realize when they sell their home.  Headlines have reported market improvements to the housing market for some time, and sellers are gearing up to cash in on those increases.

The downside is these expectations may lead to a major disappointment.  It’s more critical than ever to have a local agent that understands the local real estate market and can educate their clients on the following six very important topics.

1. THE MARKET DICTATES THE PRICE – NOT THE SELLER AND NOT THE REALTOR®

Nearly every homeowner believes that their home is special and one of the best in the entire neighborhood, and should therefore be priced higher than other comparable homes currently being sold.  Knowing the competition is critical to effectively pricing a home.  Your agent should be able to show you on paper where your home stacks up to the completion.  However, not everyone really gets it by looking at values on a spreadsheet.  If this is you, then have your agent take you on a tour of the neighborhood and pre view each comparative home on the market. 

Once you, as the seller, have a chance to see what money will buy in the current market, you should have a better idea of where your home should be priced. 

2. SET THE STAGE – STAGING MATTERS

Sure, you live in a beautiful home and everyone compliments you on your decorating skills.  This does not give you a pass at staging.  Bring in an independent 3rd party who will depersonalize and declutter the living space so that it shows its best under the brightest of lights.

Have you ever toured model homes?  They all look inviting and lived in yet there is never any personal items that will identify the occupants of the home other than a boys or girls room. 

Create a plan with a checklist so that for every open house or showing you can go through the home and create the desired image.  You have to remember the entire purpose of staging is to allow the potential buyer to see themselves living in your home and call it theirs.

Don’t forget that staging includes Curb Appeal too.

3. FIX IT BEFORE YOU LIST IT!

Any home repairs that have been on the ‘Honey Do’ list need to be done before you ever allow any prospective buyer in for a preview.  Nearly all home repairs have a minimal cost that a potential home buyer will perceive as much more expensive and inconvenient if not taken care of first.  A buyer will typically compute the cost as a negative which will be deducted from the asking price when structuring an offer.  Therefore, it is much more cost effective to take care of these minor issues up front.

There are a number of renovations that can be made that will add even more value to your home and increase the desirability of it to even more buyers.  For starters, consider adding a fresh coat of paint inside and/or outside.  New flooring.  Consider replacing the windows and exterior doors.

4. INCENTIVES ARE A GREAT MOTIVATOR

There are a number of ways to offer an incentive to the buyer.  Perhaps one of the most common that is almost taken for granted today is offering a 1 year home warranty.  This takes the concern of any hidden expenses for deferred maintenance that may go uncovered during inspections.  No one likes those kind of surprises.

Other incentives that will help differentiate your listing from others on the market is to offer to pay some of the buyers closing costs, HOA fees for a year or even to buy down their interest rate on their home loan.

While technically not a buyers incentive, many sellers will offer a brokers incentive of extra cash above the commission if they can bring a buyer who can close be a specified date.  Realize that brokers and agents sift through hundreds, if not thousands, of listings and finding the ones that pay the most just may end up on the short list of homes to show.

5. SERIOUS BUYERS ARE SHOPPING 365 DAYS A YEAR

Don’t fall into the trap thinking that buyers are only ‘out there’ on certain days of the week and only during certain seasons of the year.  Escrows are opened and closed every day – including some holidays.

Your agent should have a marketing plan that covers all of the holidays for the next 6 months, if they want a 6 month listing.  While Spring and Summer are traditionally the hottest selling seasons locally, they also have the most competition with lots of inventory for sale, which means lots of options for the buyers who are shopping for homes.

6. NEVER FORGET THAT ALL REAL ESTATE IS LOCAL AND YOUR REALTOR® SHOULD BE TOO!

The news is full of headlines reporting on the real estate market, as a whole.  But who really knows what’s going on in your neighborhood?  Is it an agent from San Diego? Los Angeles? Orange County?  I think not – it’s an agent who lives locally and works locally.  It’s a REALTOR® who has a vested interest in the community and understands its quality of life and everything about the community.

There are many common misconceptions about real estate and market trends.  To start yourself on a path to a successful sale, make sure that your local REALTOR® understands and explains to you what you need to know when listing your home for sale.

Call us today at (951) 296-8887, and get educated! 

For questions regarding available inventory and/or other real estate matters please contact, Mike@GoTakeAction.com.  Mike Mason, Broker/Owner of MASON Real Estate Cal. BRE: 01483044, Temecula Valley resident for 30+ years, Board of Director (since 2011) Southwest Riverside County Association of Realtors® (SRCAR).

HOW YOU CAN BEST STAGE YOUR HOME FOR SALE

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Simply put, the spring/summer home retail buying season is over.  Kids are back in school, our focus now is toward family, upcoming political elections, and don’t forget the holidays will be here before you know it.  Purchasing that dream home before the kids start school is no longer an option.  The trend now until the end of the year will be an increase in the number of homes for sale creating even more options for buyers.  This is not the real estate market where you can mow the lawn, list the home for sale and open escrow all in the same week.  Today, qualified and approved buyers have options and are not feeling the pressure to jump at every house they think will meet their needs.

In order to separate your home from the competition, it’s important that your home shows well.  Sure, the granite counter tops in the kitchen and the subway tiles in the bathroom look great and go a long way…but showing well is so much more than a few upgrades.  Showing well is allowing the prospective buyer to visualize themselves moving into your home and making it their own – turn-key.

Full Price Buyers don’t want to think about tearing out carpet or repainting walls. They sure won’t be able to visualize themselves living in your home with dated wallpaper or borders adoring every wall. 

FOCUS ON LIVING SPACES

Do you have a home office?  If not you need to create one.  Ten years ago, perhaps a home office was considered a trend – today they are a necessity and if your potential buyer cannot visualize where they will set up their home office they will probably be passing and not making an offer on your home.  You may have to set up the spare bedroom as the home office or just carve out a corner or a quiet place in the home.  I’ve seen them, successfully installed in a walk-in closet.  When designing your home office space, make sure that there is ample electricity, telephone lines, lighting (natural is best) as well as adequate ventilation and heat/air conditioning.

What area of the house will the prospective buyer visualize themselves spending the majority of their time?  Put a lamp next to a comfortable chair and establish a reading corner.  Pull the sofa away from the wall and float them in the room, creating a designer look.  Don’t forget to use area rugs over tile or wood floors to create furniture groupings. 

It’s very important to eliminate personal memorabilia from the entire home.  If you are planning on moving, start packing now – starting with the items that make this house your home.  You never know when something is going to trigger a negative or painful emotion in a prospective buyer

The Kitchen is the center of the home and the most important space every prospective home buyer will analyze.  Put away the dishtowels, eliminate recipe boxes and cookbooks, clear the counters of excessive kitchen appliances and accessories.  Clean your windows and windowsills so that any buyer who is interested can see out of the window and into the yard.  Take down those curtains and install new wood or faux wood blinds. Remove throw rugs and update the kitchen hardware for a fresh clean contemporary look. 

Take the time to organize your cabinets.  If a prospective buyer cannot see the back of your cabinets, they’ll think there is not enough adequate cabinet space.  It’s a good idea to start packing the non-essentials to free up the room. 

THE TAX BENEFITS OF HOME OWNERSHIP

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Everyone knows that there are tax benefits to owning a home, yet very few first time home buyers understand the significance of home ownership…for that matter, many move-p buyers don’t really understand the tax benefits of home ownership.

Taxes, of course, are unique to every tax payer.  There are many tax laws that are constantly changing.  You should not rely on this article as advice or your authority to make any decision regarding real estate and tax planning strategies.   What this column offers, is insight for when you meet with your tax professional, you’ll be better equipped to ask the right questions and plan the right strategy that works for you.

CAPITAL GAINS

As a homeowner, it’s nice to know the most substantial tax benefit will occur upon the sale of your home, assuming it’s for a profit.  When you sell, as a married couple, you’ll be able to pocket tax free up to $500,000 in profit from the sale; $250,000 for a single home owner.

If you consider selling just about any other type of investment, you’ll be taxed on every dollar of profit – typically around 15%.  The theory behind this exclusion is that most people when they sell one home reinvest the profits into another home. 

MORTGAGE INTEREST

When you take out a mortgage, you’ll be spending a considerable amount each month on the interest of that loan.  The way an amortized loan works is that you’ll be spending more in interest and less on principal during the early years of the loan. This means that most of your payment will be going to interest each month.  Most home loan monthly payments are initially more than two-thirds interest – even with a great interest rate the interest on hundreds of thousands of dollars for a home add up very quickly.

Both the Federal and California tax laws allow you to deduct all of the interest you pay on your home loan.  There are some details to check out, that may change from year to year, such as the total amount of interest that may be deducted (currently $1,000,000 for married home owners).  For most of us, we’ll be able to deduct all of the interest we pay on our home, every year from our federal and state taxes.

For example, if you borrow $300,000 for a home with a 4% interest rate you can expect to pay somewhere around $11,000 your first year toward interest.  If you’re in the 25% tax bracket you can then deduct about $2,750 off of your taxes.  Wow, $2,750 – that might represent a month or two in rent you’ve been paying!

HOME EQUITY LOANS

A Home Equity Loan, a Line of Credit, a Home Improvement Loan, a Second (or Third) Home loan all have the same benefits as an initial purchase loan.  The interest paid is tax deductible.

DICOUNT POINTS

Discount Points are a fee you may have payed to get the loan you got.  A point represents 1% of the loan amount.  Many times, a buyer who is planning on staying in the home for a longer time may ‘pay points’ to ‘Buy-Down’ the interest rate on a loan.  In other words, using the $300,000 loan example above, you may have initially qualified for a 5% loan but by paying a point in advance ($3,000) you were able to ‘Buy-Down’ or lower your interest to only 4%.

Buying Down a loan is a great strategy if you are planning on staying in the home for an extended period – typically it balances out in less than 5 years.  However, if the idea is to resell within a couple of years before moving up, then spending the money to buy-down the loan may not be money well spent.  Consult with your REALTOR® and Mortgage Professional to help figure out what is best in your situation.

The good news is that Discount Points are tax deductible just like your mortgage interest.  One point could save you and extra $500 or more off of next year’s tax bill.

PROPERTY TAXES

Property Taxes are the taxes that are paid to your County/State based on the assessed value of your real estate.  While there is much to cover in a discussion about Property Taxes, suffice it to say that regardless of where you live you can expect to pay property taxes.  In California your taxed based on the assessed value.  The rates can vary from city to city and neighborhood to neighborhood, so understand this when you purchase your new home.  Rates can be as low as 1% and in some cases as high as 3%. 

Using the $300,000 home example, this could be a $3,000 annual property tax bill ($250 a month liability) up to a $9,000 annual property tax bill ($750 a month liability).  Property taxes are a tax deduction.  Another $3,000 to $9,000 tax deduction is something everyone can appreciate. 

MORTGAGE INSURANCE

Unless you put 20% or more down on a new home, you can expect to pay Mortgage Insurance on your home loan amount.

The good news is the money you spend every year on mortgage insurance will be deductible; although there are income restrictions for this deduction, so again check with your tax professional before you start depending on this added deduction that will average around another $1,000 annually.

HOME IMPROVEMENTS

Home Improvements add value to your home and also give you the ability to be added to the purchase price of your home for determining capital gains.

Home improvements and repairs are two different things.  Replacing a roof, adding a swimming pool, or resurfacing your driveway can all be considered improvements.  Fixing a broken window, stopping a leaky faucet or any regular maintenance is not considered a home improvement and is not added to the purchase value of your home.

If you are looking to add value to your home, it’s critical that you have access to all of your receipts.  Once again, the advice of your tax professional is important here.

HOME OFFICE DEDUCTION

Depending on your line of work, it may be possible to deduct for a home office off of your taxes.  There are some pretty stringent requirements for this deduction and carries a high audit rate among those who do claim it. If your home is your principal place of your business and you meet all of the IRS guidelines, you just may get yourself yet another great tax deduction – all because you own your own home!

Call us today at (951) 296-8887 and get the information you need to make the right decision.

For questions regarding available inventory and/or other real estate matters please contact, Mike@GoTakeAction.com.  Mike Mason, Broker/Owner of MASON Real Estate Cal. BRE: 01483044, Board of Director of your Southwest Riverside County Association of Realtors® (SRCAR).