“Hi Gary. We own a home in Pacific Beach that we’ll be calling you to sell in a couple of months. But for now we just want to find out the value and how much money we’ll net from the sale so we can do some planning. Can you help us with this?”

Answer:
As to the value, you can either invite me by to see your home, or if you just need a rough figure, I may be able to do that over the phone. Call me at (858)457-KENT.

Regarding how much you’ll net, you can typically figure about 93% of the sales price. This covers the escrow fee, real estate fee, title insurance, county transfer tax, and other costs, including a 1% cushion for repairs, etc.

This does NOT cover:

1. Your last mortgage payment
2. Prorated loan interest
3. Any loan prepayment penalty
4. Prorated property tax
5. Excessive repairs for termite or other
6. Any liens or assessments
7. Return of tenant deposit or prorated rent (rentals)
8. Tax on gain, including recaptured depreciation
9. Possible tax withholding on rentals, non-CA residents, or non-citizens

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“We’re looking to buy a house in the I-5 corridor. We either want a view or one where we can build up to get one. How do I know if I can add a 2nd story? What kind of restrictions are there on building up?”

Answer:
Great question. Here are some things you need to look at when determining if you can build up:

1. How much will it cost to make the structure support a 2nd story?

2. Are there CC&Rs (Covenants, conditions, & restrictions) in force in the neighborhood or any kind of easements or deed restrictions limiting your ability to add?

3. Are there city or other governmental restrictions such as “lot coverage ratio”, height limits (usually 30 feet), zoning, or setback requirements that impact an addition.

To be safe, I’d recommend talking with the city, a good architect, and/or a real estate attorney.

Info Most People Will Never Know About Buying a San Diego Home

“Is it possible to buy a property now and get a positive cash flow?”

Answer:
Yes.

Of course, the answer has always been yes…if you put down 40%, 50%, or 100%!

But now you can buy with 20% down (even 10% down on Fannie Mae foreclosures) and get a positive cashflow. It’s even easier to accomplish if you manage the property and make most of the repairs yourself, but that’s not 100% necessary.

It’s also easier to accomplish if you factor in the tax benefits of depreciation, which is available to most people unless they make very high incomes. See your CPA on that one.

We have many properties that would be a positive cashflow. Feel free to call us at (858)457-KENT and we’ll tell you about the latest ones.

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“We’ll be selling our home in University City next year. I’m an honest person and plan to disclose everything, even though I don’t know of anything wrong with our home. But with all the lawyers and litigation in California, I’m afraid of being sued by the buyer for some technicality. What can I do to protect myself?”

Answer:
Here are the “Seven Disclosure Tips To Help Keep You Out Of Court” that I share with my clients and at my homeseller seminars:

1. Never guess! Write, “don’t know” if you don’t know something.
2. Reference the source of anything you were told. Once you take something you were told and say it as fact, you’re liable.
3. Disclose all past or present dampness, leaks, floods, or mold.
4. Disclose any past problem that was “fixed”, in case the fix doesn’t hold. A good example is a “fixed” roof leak.
5. Don’t describe a past problem as “fixed”. (See #4)
6. Avoid subjective adjectives like “normal” and “small”. What’s normal to you may not be normal to someone else.
7. If you have to debate it, disclose it!

More About How to Avoid Being Sued

“I’ve only been looking an homes for a couple of weeks and seen about 25. There’s one I really like, but I’m afraid it’s too soon. I know there’s no magic number, but how many homes do you suggest I see before buying one?”

Answer:
Tough question.

Because it’s very subjective, I’m going to just make up on the spot what I’ll call the “50/20/10 rule”.

You should see at least 50 on the internet, 20 from the outside, and 10 inside.

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