What is Proposition 13? What is proposition 13 1978? What is proposition 13 2020? In this video, I discuss the difference between the two proposition 13 bills that are on the table in 2020. Proposition 13 1978 has to do with property taxes and Property 13 2020 has to do with school bonds.

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Proposition 13 California

Proposition 13 was approved by California voters in June of 1978 and limits the tax rate for real property (real estate) to 1% of the full cash value of such property. In layman’s terms, this keeps your property taxes from adjusting each year to the value of the home and instead limits the annual increases to a maximum of 2% per year.

Proposition 13 school funding

The Proposition 13 on the March 3 ballot is a $15 billion school construction bond with interest costs that jumps the figure to $27 billion. This is a general obligation bond which will be repaid out of the state’s general fund over 35 years at a cost to taxpayers of $740 million annually. This $740 million must be paid before any other state programs can be funded, including public schools, prisons and Medi-Cal.

Local school districts must pass local school bonds in order to generate the matching funds required to get any of the state bond money. Unlike state bonds, local bonds always come with a tax hike, and, in the case of school bonds, it is always a property tax. This will make home ownership more expensive at a time when only about 25% of Californians can afford a median-priced home.

What is Prop 13 Repeal?

The prop 13 repeal in California would remove the cap of annual increases to your property taxes on commercial and industrial property valued under $3M causing you to pay a tax rate based on the current value of the property and not a tax rate based on when you purchased the property that is currently in place. The prop 13 repeal will NOT affect the property taxes on your current primary residence. This will only affect commercial and industrial properties.

Do you have questions about prop 13, california proposition 13 affects, proposition 13 protection or split roll proposition 13? If so, please comment below or contact me directly.

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Does having an open house help sell your home? Do open houses work? In this video, I give my opinion on open houses and how they can be both beneficial and non-beneficial for sellers.

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Do open houses sell homes?

This is one of those topics I feel like can go either way. I’m a firm believer that exposure drives demand and demand drives price so the more exposure you get on your home, the more likely you are to get the price you want. With that said, I do believe open houses are critical the first few weeks of listing a home for sale but I can’t say that I believe you need to do open houses every weekend thereafter.

Are open houses useful?

Yes, open houses are useful as they give buyers an opportunity to view the home in person versus just looking at photos online. With that said, I think open houses are most useful when the home just comes to the market as that is when the most eyes will be on your home. After the first few weeks, I feel like you can dial back the open houses and approach the home from more of a scheduling basis.

What percentage of homes sell from an open house?

In my career, I have sold homes from open houses but I have also had open houses where I sat for multiple hours on multiple occasions twiddling my thumbs. The buyers who have purchased my homes from open houses are buyers that were planning on seeing the home because they found it online, they didn’t just stumble into the home without any knowledge and then wanted to make an offer. They came with the intent to see if the home was what they thought it would be.

It’s hard to say an exact percentage but I would say that most buyers that are buying from open houses are just as likely to buy that same home if they had to schedule an appointment to view it. The open house isn’t what is selling the home.

Are you considering selling your home? Are you wondering are open houses a good idea? If so, please comment below or contact me directly.

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Looking to purchase a home? How long is a pre approval letter good for? In this video, we discuss the pre approval process and why getting a pre approval is crucial before starting the home buying process. We also answer the question of “How long is a mortgage pre approval letter good for?”.

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How long is a pre approval letter good for? How long does pre approval last?

In most cases a pre approval for buying a home is good for somewhere around 90-120 days due to the time that most lenders want an updated credit report. Most lenders will require an updated credit report after that 90-120 day timeframe to make sure you haven’t acquired any additional debts, inquires and to confirm nothing has changed, that’s why most pre-approvals expire after that initial time frame.

That doesn’t mean that the day the pre-approval expires you need to go out and have your credit rerun. In most cases, I would say that as long as your credit profile hasn’t changed, then you are likely good to extend beyond that timeframe without having your credit report rerun.

Why get a pre approval if it’s going to expire?

When buying a house, the first step is always to get pre approved to make sure that you can actually qualify to purchase a home. This step is critical in the home buying process and will not only confirm that you can purchase a home but it will also let you know how much home you can afford based on your debt to income ratio.

Are you considering buying a home and have questions about the pre approval process or how long is a bank pre approval good for? If so, please comment below or contact me directly.

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What is a pre listing inspection? Should you do a pre listing home inspection prior to listing your home for sale? In this video, we discuss the pre inspection in more detail and why I don’t feel it’s necessary and could end up costing you more money when selling your home.

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What is a pre inspection?

A pre listing home inspection is a home inspection completed prior to listing your home for sale. The idea of a pre inspection is to find out what is going on with the home so that you can make the necessary repairs/improvements prior to it going live on the market?

Benefits of a pre listing home inspection

The main benefit of a pre home inspection is to find out what might show up in a home inspection once your home goes into escrow and it gives you a list of repairs that the buyer may ask for when purchasing your home. Most Sellers get a pre inspection so they can make those repairs before listing the home on the market.

While this make seem like a great idea, I actually recommend against sellers doing a pre-inspection for the following reasons.

1. you are now required to disclose any items that show up in the home inspection report. In my experience, items in the home inspection usually read a lot worse than the actual repair and remember the buyer wasn’t there when the inspection was completed.
2. Even if you repair the items in the home inspection report, who’s to say that the buyer even cared if those items were repaired? Maybe you spend a bunch of money repairing items that make no difference to the buyer.
3. Just because you repaired the items in your inspection doesn’t mean that the buyer isn’t going to come in with their own inspector and find a bunch more items that the initial inspector missed and now maybe they want those items repaired?

It’s impossible to guess how a buyer may respond but in my experience I have found that just letting the buyer do their own inspection ends up working out pretty well for most sellers. If you are a seller who was willing to spend the money to repair the items that showed up on your pre-inspection, wouldn’t you then be willing to spend the same amount if a buyer comes back with a list of repairs? By not doing a pre inspection, you are not only saving the initial cost of the home inspection but you are also not guessing at what may or may not be important to a potential buyer.

If you have questions about home inspections or a selling house inspection, please comment below or contact me directly.

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The best time to sell a house in Southern California is slowly approaching us as we enter the spring selling season. Why is spring the best time of the year to sell your house? In this video, we talk about the spring real estate market and why it’s the best time of year to sell a house.

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When is the best time of the year to sell a home?

Typically the spring market is the best time of the year to sell a home but why? Generally, available homes for sale (inventory) and buyer demand is at its lowest level during the Holiday Season which means there are less homes for sale and less buyers out looking. As the new year starts, normally the inventory levels start to pick up as does the number of buyers out looking and this trend continues to about midsummer where the real estate market historically starts to slow down.

The summer normally gets the credit for the best time of the year because that is when most homes close escrow but remember those homes are going into escrow during the spring market, just closing during the summer months. The summer market tends to be a bit slower than the spring because the kids are out of school and families are going on vacations which means they don’t have the time to go out searching for the perfect home.

The Fall/Holiday market are also slower real estate markets due to kids going back to school and the Holidays approaching. During this real estate market, there are typically less homes one the market and less buyers out looking during this timeframe.

With that said, the spring real estate market typically has the most momentum and it’s generally the best time of year to sell property.

What is the best month to sell your house?

I would say that if you are planning on selling your home in the spring then you want to be on the market no later than March to take full advantage of the spring selling season. This doesn’t mean that you can’t list in April or May and still get full price it just means that in my experience March is a good time to come on the market. As you know the market is always changing but historically speaking by going on in March, you are beating the majority of your “competition” to the market giving you an advantage of having less homes to compete with. Of course, this isn’t always going to be true but right now with low interest rates and high buyer demand, it’s especially true.

Are you thinking of selling your home or wondering the best time to sell a house 2020? If so, please comment below or contact me directly.

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Interviewing a realtor to sell your home is one of the most important interviews of your life. In this video, we discuss how to interview a real estate agent, the questions to ask realtor selling your home and also touch on how many realtors should you interview.

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How to interview a realtor when selling a home

Interviewing realtors is the most important part of selling your home and asking the right questions is as important as the person sitting in front of you. You want to make sure that you are not only hiring a realtor that understands the real estate market but also an agent that has the experience and the marketing know how to help put your home in front of the right buyers.

What to ask a realtor when selling a house?

1. What is my home worth? (have them show you how they came up with the value)
2. What are you going to do to market my home?
3. How long is it going to take to sell my home?

In my experience, those are 3 questions (or a variation of) that every seller wants to know and should be asked but in addition, the seller should also be asking;

1. Do you do Real Estate full time or do you have another job?
2. How long have you been in the business? How long have you been licensed?
3. How many homes did you sell last year?
4. Are you familiar with my neighborhood? Schools? Ask questions they would need to know the area to be able to answer
5. What sets you apart from your competition?
6. Can you provide me names/numbers for the last 3 houses you’ve sold?
7. Who will I be talking to when I call to ask questions or get an update?
8. How do you plan on keeping me in the loop through the process?

I could keep going with questions but you get the idea. You want to make sure you are hiring a full time professional Realtor, someone that not only knows the business but understands the current market and how to set you up for success and isn’t just going along with what you say to get the listing.

Selling a home is more than just putting a real estate sign in the yard and putting it on the mls. You want to hire a real estate agent who is leaving no stone unturned by doing marketing through all channels like Social Media, Print in addition to TV advertising. Someone that is giving you advice to help you maximize the exposure.

How many realtors should you interview?

This is a hard question to answer but I believe you should always interview at least 2 real estate agents just to give you some comparison on price and what they are offering with regards to marketing and experience.

If you only interview 1 real estate agent then you don’t have any comparison and will always second guess your decision if something isn’t going how you think it should go. It’s important to trust your real estate agent and by interviewing multiple realtors and seeing how each does business, it will give you more confidence in that decision.

Are you in the process of selling your home and looking to interview realtors? I’d love the opportunity to interview for the job. If you have questions, please comment below or contact me directly.

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Are you in the process of buying a home and wondering, do lenders require home inspections in order to get a mortgage on a property? Do you need a home inspection for fha loan? Is a home inspection required for a conventional loan? In this video, we answer those questions and discuss why it’s critical that you get a home inspection when buying a home.

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Do mortgage lenders require a home inspection?

No, conventional, fha and VA lenders do NOT require a home inspection but that doesn’t mean that you shouldn’t get one. As a real estate professional who has been in the business over 15 years, I would always suggest a home inspection even if it’s on a new construction property. Home inspectors are paid to find problems whether it be cosmetic or something more serious and knowing this before you purchase the home could help you make a logical decision in deciding on whether or not to move forward with your real estate purchase.

While mortgage lenders do NOT require home inspections, they will still be inspected by the appraiser when the appraisal is completed on the property. That means that the property has to be in livable and habitable condition. If your purpose of avoiding the home inspection is to try and get around the fact that the home is in need of a lot of work or not livable avoiding the home inspection is not going to help you in securing a mortgage on the property as it will likely be pointed out in the appraisal. Keep in mind that there are loans like the FHA 203K loan that allow you to buy a home and then do work on it by financing the upgrades. For more information on that, see the video below.

Is a home inspection required?

As I mentioned above, No, mortgage lenders do not require a home inspection but my question to you is why don’t you want to do a home inspection? Is it because you don’t have the additional funds to pay for the home inspection? If that’s the case, then you probably shouldn’t be buying a home. Is it because the home looks great and was just remodeled or flipped? Even more of a reason to get a home inspection.

I have never come across a case in my career where I didn’t think a home inspection was necessary. Doing a home inspection could likely save you way more money in the long run that it would cost you to have it performed upfront.

Are you in the process of buying a home and have questions about home inspections? If so, please comment below or contact me directly.

Thank you for watching.

Connect with me:

B L O G ➳ http://www.jebsmith.net/blog
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How is the current real estate market? Is it a buyers or sellers market? How is real estate doing? In this video, I discuss all of these questions and give you my current real estate market analysis in addition to my residential property market report.

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Orange County real estate market report

As we move into February 2020, I expect that the local real estate market will continue to thrive with more inventory coming on the market along with a surge in buyer demand. Traditionally this trend starts right after the superbowl and I expect 2020 to be very similar. The biggest difference in this year over the past few years is that the real estate market is already moving along at a pretty good pace.

As 2019 ended,inventory tightened to its lowest level of the year which is completely normal but normally buyer demand also slows down the Holidays but this year buyer demand stayed strong and continued as we moved into January 2020. What I mean is that there are still a lot of buyers out there looking for the perfect home. When that home comes on the market and it’s priced right, it usually has multiple offers and sells within a few days. This isn’t true in all price points but the under $1M price point still has a lot of momentum and I expect that to continue through the spring of 2020.

What are current interest rates?

Interest rates are currently in the mid to high 3% range which is helping fuel the real estate market. I expect interest rates to remain low in 2020 based on comments by the federal reserve and looking at the key fundamentals of the economy. Low interest rates will keep buyers out looking which in turn will continue to push our real estate market higher for the foreseeable future.

Real estate inventory data

Another reason the real estate market continues to push higher is because of the lack of supply of available homes for sale. While I do expect to see more inventory come to the market over the next few months, I don’t expect it to solve our inventory problem. The lack of available housing for sale is a problem that will take years to fix which means that the balance current favors sellers in this market as long as they are priced at fair market value.

Are you buying a home or selling a home in 2020 and have questions about the process? If so, please comment below or contact me directly.

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Are you currently purchasing a home or starting the process and wondering, Can I back out of Home Purchase after Inspection? In this video, I discuss backing out after home inspection and why your home inspection should be completed during your contingency period so you don’t risk losing your earnest money deposit if you decide to cancel escrow.

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What is a home inspection?

The home inspection is a thorough review of the property and all of its major systems including electrical, plumbing, HVAC, pool, spa, roof and much more performed by a home inspector.. The inspection is completed early in the escrow period while the buyer is within their contractually agreed contingency period (typically the first 17 days of escrow in California). The home inspection is not required but is highly recommended to anyone buying a home.

Can I back out of buying a house after inspection?

Yes in most cases as long as you performed your inspection during your contingency period and still have those contingencies in place. It’s extremely important that you do your home inspection during your inspection period in the real estate purchase agreement so that you don’t risk losing your earnest money deposit (emd) if you cancel escrow after doing the home inspection.

In California, the Real Estate Purchase Agreement is written to allow you 17 days to do all of your inspections during the home buying process. As long as you perform your home inspection during this period then you should have no issues backing out of a home purchase after inspection.

In fact, a buyer can back out back out for any reason during that 17 day contingency period and no risk losing their deposit as long as your contingencies are still in place.

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When buying a home, are buyers present for home inspection? Should you be present for home inspection? In this video, I discuss the home inspection in more detail as well as who goes to a home inspection.

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What is a home inspection?

The home inspector is a 3rd party hired by the buyer to complete a thorough review of the property and all of its major systems including electrical, plumbing, HVAC, pool, spa, roof and much more.. The inspection is completed early in the escrow period while the buyer is within their contractually agreed contingency period (typically the first 17 days of escrow in California). The home inspection is not required but is highly recommended to anyone buying a home.

Are buyers present for home inspection?

When buying a home, should you be present for a home inspection? In my opinion the answer is Yes you should definitely be at the home inspection if at all possible. While it’s not mandatory to be at the home inspection, I believe that it’s important because reading a home inspection by itself can be a scary and daunting task when you haven’t seen the items first hand.

Most home inspectors will do a walk through with the buyer after the home inspection to show them each item first hand that will show up in the home inspection report. This is helpful because seeing something in person is completely different than reading it and looking at a picture in the home inspection report. Little items can seem like really big problems when reading about them in a report.

Keep in mind that it’s the home inspectors job to find problems with the house and it doesn’t matter if it’s new construction or a house that is 100 years old, there will be items that show up in the home inspection report. In my experience, most of the items that show up are not “major” items but often times they read like major items in the report due to the language used by the inspector.

Who goes to a home inspection?

Traditionally, the Realtor as well as the buyer will go to the home inspection. Generally speaking the listing agent and the Seller of the property are not at the home during the home inspection.

Are you buying a home and have questions about home inspections or home inspectors? Please comment below or contact me directly.

Thanks for watching.

Connect with me:

B L O G ➳ http://www.jebsmith.net/blog
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