San Jose Real Estate Podcast with Linda Chu Linda Chu

The capital gains tax and property taxes both have a large impact on real estate transactions. Here’s what you need to know about them. Want to sell your home? Get a FREE home value report.  Want to buy a home? Search all homes for sale. When it comes to a real estate transaction, there are two major types of taxes you need to know about: the capital gains tax and property taxes. A capital gains tax is levied on the profit you receive from selling a property, while property taxes are based on the value of the property itself.  People often assume if they’re selling their house and that house is their primary residence that they’ll have to buy a new house to avoid getting taxed, so here’s how each tax applies to a real estate transaction and how you can take advantage of them. Regarding the capital gains tax, if you have lived in a house you’re selling for two out of the last five years, the IRS considers that house your primary residence. If you’re a single person and have a gain of up to $250,000 on your sale, that $250,000 sum is tax-free. Anything above that and you will have to pay whatever your capital gains tax rate is. If you’re married, you can keep up to $500,000 of your capital gain on the sale. If you’re afraid of moving because of how taxes will impact you, don’t be. When it comes to property taxes, we have many people living in our area who’ve lived in their house for a long time who don’t want to move because they don’t want to lose their low tax base. For example, let’s say you paid $200,000 for your house and the property tax was 1% per year, which means you paid roughly $2,000 a year. If you want to sell the house now for $1.5 million and buy your next house for $1.6 million, your new property tax will be based on that $1.6 million price tag. That means you’d go from paying $2,000 a year to paying $16,000 a year. There is a solution for this dilemma, and it’s called Proposition 60. This proposition allows you to move your tax base to another property. If you sell for $1.5 million and you buy another house of equal or less value, you can simply transfer that tax base and continue paying $2,000 a year. The primary purpose of this proposition is to allow couples who’ve lived in their house for a long time and don’t have kids around anymore to sell that house and buy a smaller one without getting burdened with a higher property tax. If you have any questions about these two types of taxes or are looking to buy or sell a house, don’t hesitate to reach out to me. I’d be happy to help you!

Today I’ll go over how you can determine the value of your home in today’s market. Want to sell your home? Get a FREE home value report.  Want to buy a home? Search all homes for sale. How do you determine value in real estate? The first thing we do to determine the value of your home is compare the features and benefits of your property with the features and benefits of similar homes that are currently on the market or have recently sold. For example, does your home feature a popular floor plan? Does it have easy access to a backyard? Does it have a view? Is it a one-story or a two-story home? All of those things affect the value of your home. The value of your home will also depend on who you are competing with in the market. If there are 20 buyers that are looking and there is only one property available, that home’s price will increase. If there are more homes on the market than there are buyers, you might not get top dollar for your home. There are a lot of factors that determine the value of a home. Before I meet with homeowners, I pull a list of homes that are in escrow to find out if they got a good price, multiple offers, or if they had any challenges. This helps me prepare to sell your home. If you have any other questions about determining value, or if you have any other real estate questions, please feel free to give me a call or send me an email. I look forward to hearing from you!

Why do some real estate transactions fall apart? There are many factors in the real estate process, but there are three main ones that cause transactions to fail. Want to sell your home? Get a FREE home value report.  Want to buy a home? Search all homes for sale. Sometimes, real estate transactions can fall apart. It’s unfortunate, but it happens. One of the biggest things you have to understand is that your agent’s job is to make the process as seamless as possible. When nothing goes wrong, that is when the agent has done their job for you. After all, the best way to prevent any obstacle is to get in front of it. That said, there are three common reasons why real estate deals fail: 1. The home inspection. Sometimes, buyers look at the inspection and ask the seller to make thousands of repairs, which is not a good strategy. Instead, make sure that major items like the roof or HVAC system get taken care of. Smaller, cosmetic issues don’t need to be fixed by the seller. Don’t get emotionally involved in the negotiation process. 2. Real estate agents. Too often, I see real estate agents become emotionally involved and get in the way of their clients' best interest. It’s important to hire the right agent to take care of your needs. 3. Negotiations. I have seen buyers send in lowball offers many times. If you are selling a home for $1 million and the buyer sends in an offer that’s $60,000 below market value, it’s easy to get upset. As your fiduciary, I recommend that you make a counteroffer. It’s easy to get offended and dismiss an offer, but you never know what will happen. I want to get you the highest profit so that you can get the greatest return from the value of your house. Let me be your third-party negotiator; whether you are buying or selling, don’t get emotionally involved during negotiations. If you want to have a successful real estate transaction, it’s important to be aware of these mistakes so that you can avoid them. If you have any other questions about buying or selling a home, just give me a call or send me an email. I would be happy to help you!

You can sell faster and for more money than your neighbor. Here’s how. Want to sell your home? Get a FREE home value report.  Want to buy a home? Search all homes for sale. How can you sell your home faster and for more money than any other homes in your neighborhood? I’ve got four tips to share with you today that will help you do just that: 1. Landscaping and curb appeal. It’s important to update your landscaping, and curb appeal is huge. If buyers don’t like the outside of the home, they may never come in and see the inside. Trim your shrubs, get rid of weeds, and put a fresh layer of mulch down to make the landscaping look new again. 2. Consider new paint. Nothing will make a home feel brand new like new paint on the walls. In the grand scheme of things, it’s relatively inexpensive but can pay huge dividends when it’s time for buyers to make an offer. We have some great painters that our team works with and we can set you up with one that is fair and reasonably priced. New paint makes a home feel brand new. 3. “Move out” and clear the home of clutter. If you are able to move out of your home to get it ready, you should. If you can’t, you should do all you can to make it look like you are moved out. This means getting rid of all the clutter in every single one of your rooms. The more things you have, the more clutter buyers feel. The more clutter there is, the smaller the home feels. If you can declutter well, the home will show well. Those type of homes get higher offers than most. 4. Price it right. To help price homes, we use a software that I don’t know any other company in the Bay Area is using. We are able to look at a ton of information, including data about whether homes that had a price change or multiple price changes sold for a higher amount than homes that sold at their list price. We found that a home that's priced correctly from the beginning sells quicker and for more money than the homes that reduce their price. A home that is priced correctly will net you more money on that bottom line. If you have any questions or want any more tips, don’t hesitate to reach out and give me a call or send me an email. I would love to hear from you.

When beginning a home search, you wanna narrow down what you’re looking for. Here are six things to determine before buying. Want to sell your home? Get a FREE home value report.  Want to buy a home? Search all homes for sale. Before you buy a home, there are a number of questions you should answer about the type of home you want to buy and where you want to buy it. Here are the riddles we recommend you solve first: 1. The neighborhood and surrounding area. What kind of place do you want to live in? Do you want to be within walking distance of amenities like restaurants or stores, or more spread out in a quiet area? 2. Is there new construction going on? If you’re buying a new home, that’s great. However, if it’s a newer neighborhood, you should know if there is any new construction ongoing in your neighborhood and how long it will be that way. 3. Do you want to live in a certain school district? If you’d like to live in an area with good schools for your children to attend, we’d be happy to provide you with a list of the best schools in the area. Even if you don’t have children, living in an area like this can have a significant impact on your home’s resale value. It’s not always about just the house itself. 4. Meet with your lender and talk about payments. You should also discuss your utility bills and how much those are. There are a lot of different factors to look at when determining the affordability of the home. 5. What is the condition of the major systems in the home? There will be a lot of maintenance tests going on during the buying process. You want to set aside some money for repairs, or better yet, ask the seller to include a home warranty with the sale. 6. Look at the comparable homes. If a lot of homes in the area are selling quickly, it’s a good indication of positive resale value. Sometimes it’s not just about the house itself, it's about the lifestyle you want to live and how the neighborhood affects those things. Regardless of when you plan on buying, make sure you pair up with the right Realtor so you can have a professional on your side to help you along. If you have any questions for us, don’t hesitate to give us a call or send us an email. We look forward to hearing from you.

When selling your house, there are a number of ways you can save money during the process. Want to sell your home? Get a FREE home value report.  Want to buy a home? Search all homes for sale. If you're selling your home, there are a number of ways you can save money before the sale. One trend we see a lot now is buyers really scrutinizing homes during the inspection period. Sellers can save time and money by hiring an inspector of their own before selling. We call this a pre-inspection. This will help sellers find issues before buyers or their inspectors have the chance to find them and mitigate any surprises before buyers see them. With a pre-inspection, sellers can save money by making repairs on their own terms. Get a pre-inspection so you can make repairs on your own terms, not the buyer's. You can also save up to 50% of the cost by telling the inspector that you don't need a report, which can be time-consuming. Instead, just ask to walk through the property with the inspector so they can point out where issues might arise. No two inspectors are the same, but it's worth the investment. If you have any more questions about saving money before selling your home, you can always call us or shoot me a text or email. We'd be happy to help!