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How Much Mortgage Can You Afford?

 

Are you thinking about buying a home but don’t know how much you should spend? In this video, I’m going to walk you through how to determine a monthly housing payment you’re comfortable with. By breaking down the costs of homeownership, you’ll be able to make the best decision that will be right for you.

Your Monthly Housing Costs

Buying a house can be an emotional decision, and sometimes emotional decisions can be bad ones. If you’re thinking about buying a home soon, the first and most important point to consider is how much you are willing to spend.

The first place we need to start is to break down all the monthly costs associated with homeownership. In addition to your mortgage payment, there are other costs of owning a home every month. You need to find out what your cap of expenses is that you’re willing to pay every month to own a home.

One way to do this is by reverse engineering. This is the word that I like to talk about with my lender all the time. We want to figure out how much you’re willing to spend each month so we can reverse engineer a purchase price.

Mortgage Payment And Taxes

If you’re obtaining a loan to purchase your home, there are going to be two major components of that payment. First, you’re going to have your principal payment plus your interest. This is going to be a fixed amount every month for you. A portion of that fixed amount is going to be applied to your principal, and the other fixed part of that will be applied to your interest. Your mortgage payment will never change, but certain other variables will depending on the property. Every property is going to have a tax bill, and every tax bill is going to be different.

The reason they’re different is that properties are assessed taxes at the time of sale based on the price. That’s why you’re going to see varying property tax amounts as you’re looking around—even within the same neighborhood—because it’s all based on time of purchase at the price of purchase.

To give yourself a pretty clever estimate of what your annual property taxes would be in San Diego County, you can use a simple equation. Take your purchase price, multiply it by 1.25%, and that’s going to give you your annual property tax. Divide that by 12, and that’ll be your monthly taxes. If you purchase a home for $700,000, your property taxes are going to be roughly $8,750 per year. Divided out into a monthly payment, and that would be $729 a month. Pretty good fast math, huh?

Homeowner’s Association Fees

One of the other things you’re going to need to take into consideration when buying a home in San Diego County is HOAs. If you are living in a condo, almost assuredly you have a Homeowners Association fee every month. Additionally, single-family homes are often built in PUDs, or Planned Urban Developments. These also have a monthly fee.

Your homeowner association fees are used for trash, water, sewage, termite protection, and general building and grounds maintenance. If you have common area facilities like a barbecue area, swimming pool, jacuzzi, a training room, or manned security from dusk till dawn, those are what your HOA fees cover.

Private Mortgage Insurance

Another expense you might incur related to getting a loan is PMI, or private mortgage insurance. If you’re using a loan to purchase the property, this is something a lender might tack onto your loan if you don’t put at least 20% down. They think that, if you don’t put at least 20% of your own money into the loan, it’s riskier.

Once you get 20% equity, you can have your PMI removed. You need to be on top of that; when you know that your home has 20% equity, you want to call your lender and ask to have it taken off your loan. This way, you’ll save more money every month.

This is also something that you want to talk with your lender about when you’re getting pre-approved upfront so there are no surprises. You can calculate PMI into your mortgage payment to make sure you’re comfortable with your monthly housing expenses.

Searching Within Your Budget

Before you start looking at properties, we have to take into consideration your budget. Then, we have to set up a search that stays within those parameters. This will allow us to look at the right properties for you and your budget.

The last thing you want to do is fall in love with a property that’s way over your budget. I’ve been there before and trust me—it’s not what you want to do. We want to do all that homework upfront to make sure we’re looking at things that you can afford. We don’t want you to fall in love with that three-million-dollar house. I guarantee you’ll love it, but you won’t love the payment.

I hope this helped you identify the various costs of owning a home to help you get better prepared for the process. If there’s anything that I can do to help, please give me a call at (619) 925-2322. I look forward to hearing from you.

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How To Decide Where To Live In San Diego

Are you thinking of moving but are having trouble figuring out where you want to go? In this video, I’m going to walk you through where, when, why, and what you should buy when looking for a new home. I’ll help you narrow down your options by considering the three most important things to consider when deciding where to live: price, location, and amenities.

Sorting Out Your Needs And Wants

One of the hardest things about moving is figuring out where you want to live. There are so many things to consider, and the process can be overwhelming. Do you need to be near work? Are you looking for a place with the right schools for your kids? Or are you just trying to figure out where in San Diego you can get the biggest bang for your buck? Out of all these questions, trying to decide where to live can be difficult

Buying a new home is like a process of elimination. It’s figuring out your needs versus your wants to decide which way you should go. Are your needs more important or are your wants more important? Do you want that affordable monthly payment or breathtaking view? To narrow it down, we’ll consider the three most important things when it comes to choosing what to buy.

#1: Your total monthly payment. The first thing—and maybe the most important thing—is what your total monthly payment will be. This includes everything associated with the cost of the house, like your principal, interest, taxes, and insurance.

Are there any homeowners association fees? Are there any Mello-Roos fees or other special tax bonds? What are those fees altogether calculated out into a monthly expense? What is that number for you? Where do we need to cap that so that you’re happy? These are all important questions to consider.

#2: Location. The second thing to consider is how important location is to you. Do you need to be really close to work? Do you need to be really close to your kid’s school? Do you need to be within walking distance of grocery stores, the park, bars, or restaurants? Or, is it okay if those things are further away and you don’t mind driving? Do you need to be close to the ocean? Are you a surfer, bro? Do you need to catch some waves in the morning? These can all be deciding factors.

#3: The features of your home. The third thing to consider is what features a home needs to have for you to move forward with it. In other words, does your new home have to have four bedrooms and three bathrooms? Could you settle for less? Do you have to have new construction because you cannot stand the idea of replacing anything? You may want a home to be turnkey and move-in ready. Some people just don’t like shag carpet.

Searching Within Your Budget

The first and most important thing you need to realize is that no one gets everything. You just don’t. It doesn’t matter what your price point is; you’re always going to have to compromise on one of those things. Location, price, and amenities always need to be considered and ranked in their priority order for you.

For example, what if you found a great home with the price that suits you in the neighborhood you want—but the interior needs updating? Or what if you went $20,000 over budget, but you got the house of your dreams in the place that you want and with all your amenities? What if your house came $50,000 under your budget, but you had to sacrifice location?

For most people, the most important factor is going to be price—unless you won the lottery or somebody left you a ton of money and budget is not a factor. If that’s the case, we can go ahead and cross price right off the map. Usually, though, price is the first thing that we have to consider. Once we figure out what your budget is, that will automatically help us with geography. Certain neighborhoods are just going to be exed out because they’re not going to fall within that budget. Conversely, there are going to be a lot of neighborhoods that’ll be put into your search parameters because they’ll fit within your price range.

Amenities And Location

Once we have your budget nailed down, we have to consider amenities and location. It’s up to you to decide what’s most important. Is it the location or is it the amenities that the property is giving to you? For example, if you know you need a fourth bedroom and we’ve already nailed down your budget and monthly payment, that’s going to narrow down the neighborhoods that we can look in for you. It will make your search much easier.

On the other hand, if the location is more important and you are willing to sacrifice some amenities, then we can go ahead and zero in on the location first. For example, maybe you thought you needed a four-bedroom house at first. Now you realize that location is more important, and a two- or three-bedroom will do. That’s going to make our search much easier.

A Process Of Elimination

A good real estate agent is going to help you determine what’s important to you, but fair warning: you may end up with something that was the complete opposite of what you thought you wanted. Sometimes, these things change. In fact, they almost always do.

Finding a new home is really just a process of elimination. The sooner you realize what your needs are, the easier it will become. I hope this helped you understand the most important factors to consider when finding a new home. If you have any questions about buying a house or home here in San Diego, please give me a call. I would love to talk to you and help you narrow down your home search!

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Selling Your Home For Top Dollar With The Right Marketing Plan

Did you know that getting your home sold for top dollar takes more than sticking a “For Sale” sign in the ground? In this video, I’m going to walk you through all the steps that we take to list, market, and expose your home to thousands. While most realtors simply list your home on the MLS and wait for a buyer to come, I’m going to explain my marketing plan that will get your home sold for the most money in the shortest amount of time.

The truth is, there are many ways that you can sell your home today. You might not even need a realtor. If you want to sell your home for top dollar in the fastest way possible, though, then this information is for you.

Professional Pictures And Video

Before we list and market your home, we need to dress it up, declutter it, and depersonalize it.  Once it’s show-ready, we need to get professional photographs and videos done—and I do mean professional. Shots with your cellphone is a big no-no. You need to have it done professionally with professional equipment and professional lighting, showing the highlights of your home in the best possible way.

The reason this is important is that the statistics speak for themselves. Photos with HD enhancement sell for 45% faster and 75% closer to list price. The reason for this is simple. Would you go out and see a home in person that just looked okay online? Of course not; why would you waste your time?

Let’s step outside of the world of real estate for just a second to illustrate. Let’s talk about online dating (of which I know nothing about, but you’ll get the concept). It’s kind of like finding a profile online; it speaks to you or it doesn’t. You’re going to either swipe left or swipe right. It’s the same with house eye candy. We want to take pictures of rooms that trigger emotions like bedrooms, bathrooms, and kitchens. These are the rooms that people fall in love with and the reason people make bookings to see them.

In addition to high-quality pictures, we’re going to take a professional video walkthrough tour of your house. This will give people a sense of actually walking through your home. The one thing that photographs lack is the ability to feel the flow of a house, so live-action video is important. Video helps your home stand out from the herd, especially because not every listing has it. Your home will stick out in people’s minds.

Showcasing Your Home Online

Once we have all the pictures and videos of your home that we need, it’s game time. We want to find the right places online to showcase your home. Since most searches begin on Zillow, Trulia, Redfin, realtor.com, and homes.com, these are the site where we’re going to focus our advertising of your home.

One of the other really important places we’re going to showcase your home with these professional photographs, videos, and descriptions is the MLS. This is because we need to market to the realtor community as well. Since the vast majority of all buyers are represented by realtors, we need to make sure that they get first notice as well. We also want to make sure we have the information in the MLS correctly. The most important features are things like school districts, restaurants, shopping, access to highways, and commute times to downtown. This information needs to be accurate, as it will help people see your home where they’re looking.

Once we’re done with our initial, big online marketing push, we’re going to hit the social media platforms. This includes the sites where people are looking, like Twitter, Instagram, Facebook, LinkedIn, and YouTube. It’s very important to get that social media platform strategy in place, as your video will especially shine there.

The Importance Of Signage And Showings

Signage is also very important. It lets your neighbors know your house is for sale, though they might not be looking on the MLS or anywhere else online. Rather, they might know somebody who would really love being in their neighborhood. Nobody is a bigger cheerleader for your neighborhood than your neighbors. Signs let them help you.

The first two weeks is a crucially important time when we have your home on the market for sale. We need to have events such as virtual tours and open houses, either virtually or safely in-person. To maximize the new-kid-on-the-block energy in the first two weeks, we need to promote your home to the most amount of eyeballs possible.

Your Tailor-Made Marketing Plan

Every home is unique. Your marketing plan is going to be tailor-made to you depending on the needs, benefits, and features of your home and your neighborhood. I hope this gave you an idea of some of the amazing things that we do to get your home sold. We don’t just put a sign on the ground, list it on the MLS, and hope for the best. We create a plan to make sure we maximize your return on investment.

If you have any questions about how I can help you sell your home with my super-duper awesome marketing plan, please reach out to me. I look forward to hearing from you!

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The Pros and Cons of Hiring a Realtor

Are you thinking of selling your home and wondering if you really need to hire a realtor? In this video,  I’m going to walk you through the pros and cons of hiring a realtor so you can make a decision that’s best for you. Because selling a home is one of the largest financial decisions a person will ever make, it’s important to consider if and how hiring a realtor can provide you with any advantages in the home selling process.

The Pros And Cons Of Hiring A Realtor

Because there are many moving parts and behind-the-scenes work that go into selling a house, many people find hiring a realtor necessary to navigate the process. Others wonder if they can simply do it themselves. Here are some factors to take into consideration to help you decide for yourself.

Paperwork And Disclosures

Did you know that in San Diego we have all kinds of local area disclosures that people need to be aware of? For example, military ordinances, earthquake fault lines, and flood zones are a small example of things people should know about—but often don’t. By the time you get finished writing a contract, you’ve probably signed about a hundred documents that all have legal repercussions, liabilities, and responsibilities you may not fully understand.

The purchase agreement alone, for example, is anywhere from 25 to 40 pages—and that’s on the short side. This is only the purchase agreement; you then need to add local air disclosures, natural hazard disclosures, and seller property disclosures for another 800 pages. However, if you’ve recently bought or sold property here in San Diego and have buckets of time, you might not need a realtor.

Facilitating The Transaction

Another pro of hiring a realtor is the facilitation of the transaction. There are so many different aspects that go into selling a house, particularly here in California. Believe it or not, facilitating these kinds of transactions is a full-time job. For example, when you are selling your home on your own, you are responsible for the marketing, the showings, and the feedback. When you get your home into contract, you then have to worry about organizing the inspection and making requests for repairs with different professionals, which can include foundation people, the plumber, the electrician, and the roofer. Next, you have to worry about the appraisal, negotiating any difference between an appraised value and a contract purchase value.

If you know how to do all these things from facilitating the transaction until the end, you probably don’t need a realtor.

Realtor Commission

Aside from the previous two pros of hiring a realtor to sell your home, we do need to mention a con. It’s a common one that most people want to know: what is it going to cost? The real question you should be asking yourself is not what the realtor commission is, but rather if the realtor that’s involved in your transaction is worth the cost. When you hire a realtor and you pay a commission, it’s an investment. If you invest in a realtor, will they give you a return on investment? A good realtor should yield you a much better sales price than you could get on your own, which will cover their commission and then some.

Should You Hire A Realtor?

I hope this gives you some great insights into the pros and cons of whether or not to hire a real estate agent. It really shouldn’t be a question of if you should hire a real estate agent—rather, it should be which one? The first thing you need to do is understand what your realtors’ roles are. The second thing you need to do is find the right one. Hiring the right real estate agent can be one of the best decisions you’ll ever make while hiring the wrong real estate agent can be one of the worst decisions. If you have any additional questions about how to sell your home, I would love to talk to you. Please feel free to reach out to me and I’d be happy to connect!

 

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How To Sell Your House For Top Dollar

Did you know that getting top dollar for your house doesn’t mean starting with the highest price? In this video, I’m going to explain how properly positioning your home will get you the most money on your sale. By starting with the right price, description, and marketing, you’ll sell your house in record time while walking away with the largest profit possible.

How To Sell Your House For Top Dollar

While everyone wants to get the most money for their home, there’s a strategy for making this happen. A common question I get is, “Can we start our price way up here?” While it might seem like the right way to get top dollar, pricing high is not a good idea. When selling a home, it’s important to position the property to target and attract the ideal buyer. We do this by positioning.

Properly Positioning Your Home In 3 Ways

Most people have never heard of positioning their home for sale. What does this entail? Positioning is how we make your home appear to buyers, and having an action plan for this before listing is vital. There are 3 main ways we’ll position your home—the most important of which is price.

Pricing

Pricing your home right the first time is the most important thing that we can do to get the most money. Doing so will minimize your market time, allowing you to have the best chance of getting your desired price. If your house accumulates too much market time, you’re going to end up getting low ball offers. This is a situation that nobody wants.

To better explain, imagine you’re in the position of the buyer. Would you be more likely to give a lowball offer to a brand new property on the market or one sitting on the market for a long time? Too much market time usually means one of two things: either the seller is being unreasonable about price, or there’s something wrong with the house. The buyer may be pricing the property too high, or the house has major issues that are turning buyers off. 

When you’re the new kid on the block, however, everybody is going to rush to see your property. The first few weeks that your house is listed will be critical, and we need to get the most amount of eyes on the property. This will result in more showings and a faster sell time. Since people don’t want to miss out on something new, they’ll be more likely to make an offer before someone else has a chance to take it away from them.

Another thing to consider when pricing your home is the way people search online. Prospective buyers tend to search in price range blocks, usually in increments of $25,000-$50,000. If we think buyers will search up to $400,000, $425,000, or $475,000, we want to make sure we price accordingly to get the most number of eyes on the property. Getting as many buyers as possible to look at your listing during these early weeks is key.

Listing Description

The second way we’re going to position your home properly is through its description. In other words, we want to capture the attention of the ideal buyer for the property. The “remarks” section in the listing is a really important place for advertising your house. It’s where we get to tell your home’s story.

For example, if we were selling an investment property, we would be talking about financial terms—like cash on cash return or net operating income. On the other hand, if we’re marketing a single-family home in a great school district, we’re going to be talking about features that appeal to families who have or are thinking of starting a family. 

Marketing

The third and final piece of proper positioning is marketing. We need to market your home where your buyers are going to be hanging out. An aggressive agent—or politely aggressive Canadian-American agent—is going to go after the buyer actively. They’ll do more than just put a sign in the ground and hope that the buyer comes magically to you.

As you can see, proper positioning is vital to get the most value when we sell your house. Listing your home on the MLS is one thing, but marketing it, positioning it, and getting top dollar for it is another. If you would like to get a politely aggressive marketing plan for your home, please don’t hesitate to reach out to me and I’d be happy to help!

 

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How Much It Really Costs To Sell Your House

Have you decided to sell your house but are wondering how much it’s going to cost you? With all of the packing, moving, and adjusting, selling your house can be stressful. What’s even more stressful, however, is not knowing how much you’re going to pay. In this video, I’m going to walk you through all the costs associated with selling your home. By knowing what your closing costs are upfront, you’ll have the upper hand in negotiations and will know exactly how much you’ll walk away with at the end of your sale.

How Much It Costs To Sell Your House

The most important number you need to know when selling your house is not just what the buyer pays for your home. Surprisingly, its the amount of money you put in your pocket when you walk away from the transaction. To better understand what this number will be, you’ll need to consider some common closing costs.

Title Fees

One of the first closing costs you’re going to see is title fees. These fees are essentially what you’re paying the title company to change the title over to a different name. This includes any fees and taxes associated with that switch, such as unpaid liens. In short, this process changes the name on the property from who used to own it (you) to who’s going to own it now (the buyer). Wherever you buy property in the United States or Canada, there’s going to be title fees. It’s an inescapable part of the process.

Tax Proration Fee

The next fee you’re going to see is a tax proration fee. I personally learned about this the hard way when seeing an unexpected, large fee on my home sale. The tax proration fee is the amount of property taxes that are left during the calendar year period that you, the homeowner, haven’t paid yet. You will be responsible to pay your taxes up until the day you own the property. From that day moving forward, the property taxes will be the burden of the buyer.

The tax proration fee is calculated out daily, and it ensures that you pay up until the day that you close. After that, you’re done. You can walk away, and everyone’s happy.

Transfer Fee

Another fee you’ll be responsible for is the transfer fee. This is a county tax, usually calculated as a certain dollar or percentage per every $1,000 of the purchase price. This fee goes towards a variety of county line items that your taxes pay for—and that comes from property sales. One of the biggest items you’ll see on your closing statement (or prepared seller net sheet) is going to be your loan payoff amount.  If you’re lucky and don’t have much left on your loan, it will be small. If you have more, it will be the amount of your unpaid mortgage balance.

Real Estate Commissions

If you decide to hire a realtor, the next fee you should expect is the commission for your realtor. The seller actually pays for both the buyer’s and seller’s side of commissions. This then gets split evenly between the buyer’s broker and the seller’s broker. When you purchase a property, you don’t have to pay commissions.

Included in the realtor commissions on the seller’s side is everything that’s needed to sell your home. All the activities in the pre-listing stage—including photography, videography, drone photography, print marketing, and internet marketing—will be covered, as well as a portion for the buyer’s agent. The commission fees will be consolidated into a single line item.

Your Total Seller Closing Costs

Once you subtract all seller closing costs, you’ll then have a number that will be your walkaway total profit. From the sale price of your home, you’ll need to account for commissions, tax prorations, and all the other fees we discussed. In real estate, everything is based on a percentage of the sale price. The higher the sale price of the home, the more the closing costs are going to be as well.

If you’d like to get an idea of what it would cost to sell your home, please feel free to contact me. I’ll be happy to give you a seller’s net sheet so you can see what your bottom-line, walkaway take-home figure will look like. This will give you the best idea of how much money you’ll keep in your pocket after you sell your house!

 

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The 3 Stages Of The Home Selling Process

Have you decided to sell your house but don’t know what to expect next? If so, I’m here to help. In this video, I’m going to walk you through the 3 stages of the home-selling process. By understanding everything that the process entails, you’ll be better able to sell your house for top dollar and move on to your next chapter.

 

3 Stages Of The Home-selling Process

#1: Pre-Listing

The first stage of the process is called the pre-listing stage. Before we put the property on the market, we’ve got to make it look great. There are a few different steps that we’ll need to take, which include going through your home, decluttering and depersonalizing.

I’ll also have my stager with me to give us some great ideas that will make your home look as great as it can. Decluttering means getting rid of excess stuff, so whatever you don’t need to live your everyday life will have to go. Whatever you’ll want to save will go in storage, and anything you don’t want to take with you to your next home will be sold or donated.  The primary goal here is to make your house look amazing.

Once there’s less stuff in your house, potential buyers can start envisioning themselves and their stuff in your house. We don’t want them to look at your life and your things. We want them to imagine their lives and their things in this beautiful home. After the decluttering and depersonalization, we’re going to hire a professional photographer and videographer. Depending on the property, we’ll also want to get drone footage and make a 3D photo using a Matterport camera.

The reason photos and videos are so important is that the first showing of your home is going to be online. We want to make it look as enticing as possible, which will draw the most solid buyers in to see your home in person. The video walkthrough tour is going to be very critical, using professional still photographs with the best lighting that shows all the amazing qualities of your house. That’s going to be critical to our success. Have you ever seen something online that you thought was just so awesome that it made you want to see it in person? That’s exactly what we’re aiming for.

 

#2: Active On The Market

Once we’ve completed step 1, we’re ready for your listing to go live on the market! The first two weeks that your home is listed are going to be our most opportune time to get a great offer. You’ll have the highest number of eyeballs on your home with the highest level of interest, making this truly game time. Everybody wants to see the new kid on the block, and your house is going to be the prettiest and shiniest new object. The more people we can get to see your house in these first two weeks, the likelier we are to get the highest offer close to—or even above—asking price.

During this two-week time, it’s also important to be as flexible as possible when showing. By offering as much access to the home as possible, keeping it at its show-ready stage at all times, you’ll get the highest number of potential buyers coming through your house. You want people to be able to quickly and easily come in to get a look at your beautiful home.

While we can’t control when people want to see your house, we can control how it looks when they do see it. Eventually—hopefully sooner rather than later—your home will get an offer and we will go into escrow.

 

#3: In Escrow

The third stage of the home-selling process is accepting an offer and getting your house into escrow. People think that once you get an accepted contract, most of the work is done. In reality, this is when things really start to happen.

The first thing that’s going to happen is the inspection, which the buyer’s agent will set up right away. Additionally, the buyer’s lender is going to send them a bunch of loan disclosures to fill out so the appraisal can be ordered right away. After that, there will probably be a termite inspection just to make sure there are no bad surprises.

After these inspections, there’s more to be done. If there are HOA dues, we’ll need to order those documents. Cleaning and moving will need to be complete, as well as repairs. We’ll also need to transfer utilities to the buyer. If your head is already spinning, don’t worry – we’ve got you covered when it comes to all these details. Our job is to make it as stress-free as possible for you. If you’re not using a realtor, it will be your responsibility to complete all these steps and follow through.

 

I hope you now have a better idea of everything that the home-selling process entails. While this is a general outline of what will happen, every situation is different depending on the market. If you have any questions, please contact me

contact me and I’ll be happy to be a resource for you. I’m always here to help you get your home sold and move forward in the next chapter in your exciting life.

 

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