“I’m negotiating to buy a bank foreclosure and just got an addendum form saying the bank can cancel at any time. Do I have to sign that?”
***ANSWER:
Only if you want to buy the home.
But let me put your mind at ease. After selling 500+ foreclosures the past 2 ½ years, I’ve yet to see a bank cancel once they sign the contract as long as the buyer is performing.
Search Homes For Sale in the San Diego MLS
“If I am a first time homebuyer, can I qualify for down payment assistance in the form of grants or “silent second” loans?”
***ANSWER:
Perhaps. The few available programs have certain requirements, such as:
- Buying in certain targeted neighborhoods OR
- Income limits OR
- Having 3% for the down payment OR
- Having a particular occupation, such as a policeman or teacher (and perhaps teaching at a “targeted school”) OR
- …who knows what
If you’re interested in such a program, call my office at (858)457-KENT and we’ll put you in touch with our preferred lender.
Seven Simple Ways to Beat Competing Offers
“We’re thinking of moving some time this year. When’s the best time of year to sell? I’ve always heard it’s the summer, but I value your opinion… ”
***ANSWER:
Except for late December, it seems it’s always a good time to sell a home here. But all other things being equal, the very best time to sell in San Diego tends to be February through May.
That’s probably for two reasons:
#1: There’s a double time lag from when a home goes INTO escrow…to when it closes…to when the media reports on local market activity. A home that goes into escrow in April typically closes May or June. Then in July the papers or news reports market activity.
#2: Unlike San Diego, most of the country actually has four seasons, some with cold snowy winters. In those areas, real estate activity is lowest in winter and highest in summer.
A Free Guide on How to Sell Your San Diego Home
“Will banks charge me a per diem penalty if escrow closes late due to them or the escrow company’s fault?”
***ANSWER:
No. Occasionally some overworked people at banks lose track of whose fault it was and try to charge it, but we talk them out of it.
Hidden Traps in the Contract’s Small Print
“One of my new year’s resolutions is to start investing. Do you recommend stocks or bonds?”
***ANSWER:
With both markets being so hammered, either may be good to invest in. Not being a stock expert, you don’t really want me advising you about stocks.
But I can share with you 5 advantages that real estate has over stocks:
1. You can personally impact the value of your real estate. In other words, you can fix it up or raise the rents, and your value will go up. I don’t care how often you shop at Wal-Mart, you’re not going to increase the value of Wal-Mart stock
2. Real estate isn’t an “efficient market” like stocks. Unless you’re a stock wiz or well-connected (Martha Stewart), 99% of the info out there is already factored into stock prices. By the time you hear news that will impact a stock’s value, it already has. But luck, hard work, smart negotiation, &/or the right connections can get you a “better deal” on a piece of real estate
3. To receive income from stocks (other than a small amount from dividends), you have to sell and pay taxes. But with real estate you can receive a positive cashflow. Even if your cashflow starts off negative, over time you can pay down the mortgage and raise the rents and get a positive cashflow.
4. You can “change horses” in real estate without paying taxes on your gain. Via a “1031 exchange”, you can sell one property and buy another without paying a nickel in taxes. I’ve personally done them and hundreds of my clients have too. You can’t do that with stocks unless you’re trading inside your IRA.
5. There are other creative ways to avoid taxes. Under current tax laws, you can move into your rental property for 2 years, converting it into your personal residence, and then sell it and likely pay very little taxes.
Of course, real estate has its downsides, such as the hassle or expense of managing rentals. And many people have made a fortune in stocks. You need to invest in ways that fit your needs. And it probably makes sense to diversify.
Good luck.
How to Trade Up Your Investment Or Rental Real Estate & Pay ZERO Taxes
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