Dear Michael: I am trying to purchase a home but I keep on facing multiple offers and losing out. Is there anything I can do to better my chances?
Answer: Southern California is encountering a “red hot” real estate market. After five years of a slow market, prices started their increase in 2012 and have reached a 35 percent increase since. Prices in most areas have surpassed the last high of 2007. If you are a buyer looking for a home in our current market you will need to get creative.
- A) Your offer will probably need to be higher than the asking price. If you don’t step-up, someone else will!
- B) Be creative; write a personal letter to the seller. Emotions can run high and your letter could make the difference.
- C) If you have more cash as down payment you will stand a better chance. Minimize the seller’s risk by applying a higher down payment. This will give you a better chance if your competition has limited funds.
- D) Submit a “clean offer.” Make your offer attractive by letting the seller select services (escrow and title). This is a seller’s market; seller’s wants to feel in control of the transaction. I am not implying that you should cave-in to the transaction, but what I am saying is that you may have to make some sacrifices in order to close the transaction.
Dear Michael: We are getting ready to close escrow on our new home. At closing does the seller or buyer pay the property taxes?
Answer: Property taxes are pro-rated from the date of closing: that is, the seller pays the days that he or she owned the house until closing, and the buyer pays any remaining days left for the current tax bill, as well as any supplemental bill that is due within 60 days of the closing. Property tax bill is from July 1 to June 31. All taxes may be negotiated as part of the purchase agreement: If the seller’s agreement to pay the upcoming tax bill is enough to make a price agreeable to both parties, there is nothing stopping the parties from making this agreement before a purchase contract is executed.
Dear Michael: We are in escrow on a new home. The seller has asked if he can store his belongings in the garage for a period of two weeks after the close of escrow. We don’t mind if he does but would like to know if there is any risk involved.
Answer: if you don’t need the garage and you trust that your seller will move his belongings out two weeks after the home is sold to you, then I don’t see any problems with allowing it. Make sure the terms of the garage rent-back and move-out date are defined in writing in an addendum. You may also want to consider charging the seller a refundable deposit for the garage if you are worried that he seller will not have his belongings out of the garage on time.
Dear Michael: I am filing my tax returns. What can I claim as a tax deduction when buying a home?
Answer: This is really a question you should ask your CPA or whoever does your taxes. I encourage you to follow up with a professional tax advisor as I am not qualified to give advice in two areas – legal matters and tax matters. Briefly put, providing you itemize deductions, own and occupy your home, you can deduct both property taxes paid on your home and interest paid on your mortgage. You can deduct the points and prepaid interest you make during the actual purchase, whether you pay them or the seller pays them on your behalf. Gets a copy of your escrow closing statement, as your tax preparer will need it. If you don’t have a copy, contact your escrow company or your real estate agent they can email you a copy.
Michael Kayem is a Realtor with Re/max Estate Properties serving Culver City and the Westside since 2001. You can contact Michael with your questions at 310-390-3337 or e-mail them to him at: homes@agentmichael.com.
