Category: home buying

4 Reasons Why Buying A Home Is Right Decision

The majority of people buy homes to build wealth. In fact, there’s a saying: “Why pay someone else’s mortgage and contribute to their equity when you can spend the same amount of money or less and reap the same rewards?”

Yet still, many buyers are scared by today’s high-priced market, and some feel that renting in Orange County is better than buying. However, this couldn’t be further from the truth in many cases. So, today we’ll discuss 4 reasons why buying a home in Orange County is still affordable.

1. Appreciation

Unlike vehicles that depreciate in value, homes consistently increase even though real estate values tend to move in cycles. There’s a common misconception among first-time buyers where they think that the home’s physical characteristics will increase the value.

But the truth is that the physical structure usually depreciates over time, whereas the land the house sits on increases in value. Either way, most people consider their home investment to be their best defense against inflation. Since 2000, home prices in Orange County have appreciated 173% according to data from Neighborhood Scout.

2. Property Tax Deductions

Another reason buying a home is still affordable is because there are various ways it helps with taxes, with some of these deductions coming in the form of property tax.

Before 2018, homeowners could deduct all state income and local property taxes on federal returns. Before that year, the average state and local tax deductions (SALT) in California was more than $18,400.

Once the federal cap on SALT deductions of $10,000 is removed, ownership becomes even more beneficial. First-time home buyers can find a wealth of tax information in IRS Publication 530.

Just keep in mind that if you want to take advantage of the property tax and interest deductions, you have to itemize the deductions.

3. Mortgage Interest Deductions

As we mentioned, owning a home is an excellent tax shelter because tax rates usually favor homeowners. And if you ask most homeowners, they’ll agree that the most significant advantage of owning a home is the tax deductions.

With that being said, if your mortgage balance is lower than the cost of your home, then you can fully deduct mortgage interest from your tax returns. And this is great because, as most of you know, interest is one of the biggest components of your monthly payment.

4. Preferential Tax Treatment

If you own a home for longer than one year, upon the sale, if you make more in profit than the allowable exclusion, the profit is considered capital gains. In terms of income taxes, capital gains receive preferential treatment, which means that even when sale profit surpasses the exclusion, your taxable portion will be far lower than you think.

The average income tax rate for most taxpayers is about 22%. Considering that capital gains taxes will range from 15% to 20%, the savings can be significant.

Once you’re ready to buy a home, it is worth it.
Purchasing a home is a serious commitment to that location and community lifestyle, yet the financial benefits are well worth it in the long run. Real estate ownership is certainly one of the most rewarding investments available.

How to Choose the Best Offer and Close the First Time

Congratulations on taking the leap and placing an offer on your dream home! After some time looking, you’ve finally found the perfect house for you and your family and are willing to pay the list price. So, it’s a done deal, right? Sometimes, it’s not that simple.

Today’s market is known as a seller’s market, which means there are more buyers than homes for sale, which can mean that a full-price offer isn’t enough. But, keep reading because we’re going to discuss how to make your offer stand out in a competitive market. If you follow these tips, it just may push your name up on the seller’s list of potential buyers!

Seek Full Pre Approval

Most home sales fall through due to financing issues. To ensure your offer stands out among the crowd, be sure to point out the fact that you are fully pre-approved. To make this clear to the seller, you should include a copy of the lender’s offer and not just send the basic pre-approval that’s dependent on other conditions.

Hire A Great Agent

Good realtors have a solid understanding of how the market works; they are proactive and communicate clearly. Don’t settle for the first agent that’s recommended. Instead, meet with several and choose the person who seems most informed and someone whom you are comfortable around.

Start With Your Highest Offer

The majority of sellers choose the highest offering price over all other factors. Remember to shop only homes that are in your price range, and don’t let your emotions take over. Regardless of how much you love a property, you need to be prepared to walk away from it so that you don’t end up with a monthly payment you cannot afford.

But at the same time, don’t undersell yourself. If there’s a house you really want and can afford to pay a little extra, this can be a deciding factor to close in a competitive market.

Offer a Larger Down Payment

No matter what type of home loan you plan to obtain, offering more money down is a sign of good faith for the seller. Anytime you can prove that you are in good financial standings is a benefit, and being in a competitive market is not an exception to the rule. Offering a higher down payment shows the seller that you’re serious about the property and can meet all financial obligations.

Ensure Your Offer is Complete

Obviously, you want to pay attention to every detail when it comes to completing an offer, but mistakes do happen. These types of issues can include missing EMD, disclosures, and other important information regarding the purchase agreement. Anytime you’re in a competitive market, any such mistake can make your offer get pushed to the side.

And, even worse, if the seller receives numerous incomplete submissions, yours may never get a second thought. So, if you want to solidify your chance, be sure to dot every I and cross every T. Check and recheck!

The bottom line is that buying a home can be daunting, and there are many factors when it comes to writing contracts. If you pay close attention to each of the tips above, then you are on your way to scoring your dream home, even in a competitive market!

Mission Viejo vs. Rancho Santa Margarita – Where is Better to Live

With the relentless demand for housing in both Mission Viejo and Rancho Santa Margarita, people often ask how the cities compare with each other. Especially after the pandemic subsides and normalcy returns, you may be thinking about a move or want to review the advantages and disadvantages of both areas.

Both Mission Viejo and Rancho Santa Margarita (RSM) share some traits where they both provide comfortable temperature ranges in the winter, a lower cost of living when compared with Newport Beach, Laguna Beach, Irvine or other major cities like L.A., and San Diego, and other characteristics. Nevertheless, there are obviously a number of differences too.

In terms of space, Mission Viejo is larger than RSM, measuring out at 18.03 square miles compared to RSM’s 12.94 square miles. Due to this fact, Mission Viejo has a larger population than RSM, totaling about 95,516 people, while RSM’s population is roughly fifty percent less at 48,500 residents.

Education
Both Mission Viejo and RSM offer a well-educated population, with around 57.5 percent of those in RSM have a four-year college degree and about 53.9 percent in Misson Viejo. Corresponding graduation rates for both cities are included in the chart below:

Mission Viejo, CA                Rancho Santa Margarita, CA

High School Graduation Rate     94.4%                                    95.9%
College graduation rate               43%                                       32%
Grad school graduation rate       15%                                      16.4%

Politics
Both Mission Viejo and RSM are slightly democratic based on the 2020 presidential election, 53.5% of people in Orange County voted Democrat, 44.4% voted Republican, and the remaining 2.1% voted Independent.

In Mission Viejo, where they voted Republican in 2016, they switched in 2020 to Democrat. 62.3% voted Democrat in the 2016 presidential election, 32.9% voted Republican, and the remaining 4.8% voted Independent.

Cost of Living – Which Is More Expensive?
The cost of living in Mission Viejo is higher than in RSM. AreaVibe’s cost of living index evaluates the cost of living differences between Mission Viejo and RSM according to ten categories: goods and services, grocery, healthcare, housing, crime, employment, schools, transportation, and utilities.

It is worthwhile to keep in mind that a score of 100 means the average cost of that category in the United States. If it is higher than 100, then it is cost above average.

Cost of Living Index:

Expense:                     Mission Viejo, CA                  Ranch Santa Margarita, CA Groceries                             114                                                  114
Healthcare                           105                                                 105
Housing                               294                                                  276
Schools                                 120                                                  130
Transportation                    136                                                 136
Utilities                                  89                                                   89

OVERALL                            167                                                 162

Based on this analysis, Rancho Santa Margarita is a little bit more affordable than Mission Viejo, providing slightly less costly housing and better schools. Both Mission Viejo and RSM provide residents a much higher cost of living. But if you’re a long time resident of California or relocating with a good paying job you are paying for convenience and a comfortable lifestyle without all the weather problems of the mid-west and east coast each year.

It’s complicated to discover a place that provides a good quality of life, convenience, and affordability – and Mission Viejo and RSM provide all of that and more.

Real Estate
The annual median price of a home in Mission Viejo is $867,800. This is less expensive than the median home price in RSM, which is $755,500. Rent in RSM is usually less expensive as well, with average rent in RSM around $2,054 per month compared to $2,119 in Mission Viejo.

If you are seeking an experienced real estate agent in Orange County to help you with your search, contact us to speak with local and state licensed experts.

In regards to architectural style, features mostly modern Spanish colonial, Ranch, Mission Revival and Western Craftsman style homes. There is one neighborhood with Mello Roos taxes.  That would be Dove Canyon in Rancho Santa Margarita.

Both Mission Viejo and RSM offer a vibrant community of forward-thinking, hard-working, and well-educated individuals.  There are so many reasons to love both cities; it’s hard to go wrong with either choice. Don’t hesitate to reach out if you are contemplating moving and have any questions!

4 Great Rules for Home Buyers to Follow

#1 – Check out the surrounding community not only the home
If you have to commute everyday or have daily errands outside of home it is a wise move to feel comfortable with your immediate neighborhood, instead of focusing on just the home.

This can be a really important factor to keep in mind for people relocating to a brand new city, because these buyers are privy to all that goes on aside from any friends they know. It is important to figure out the parts of the city that are ideal, and to start thinking about things such as distance from your job and local shopping options.

This just reinforces the slogan that real estate is all about location, location, location, and that is definitely the situation here.  Going through the home buying process and becoming a homeowner in a bad area can be a huge mistake that can take years to correct.  Prospective home buyers can get a sense of the community just by driving around at different times of the day and early evening.

Rule #2 – Be reasonable with your offer
If you ever want to make the seller not negotiate with you, just make a deceptively low offer. Keep in mind that you can effectively change your purchase price after the inspection.

One way to do that is after your professional home inspection you can request the seller to credit you a certain amount for whatever repairs are necessary now or in the near future.  Who knows the seller may credit you $15,000-$50,000 because they are under time constraints to buy their next home and need this home to sell.

In addition, you could simply ask later for something you just thought about or overlooked that could use some upgrading like the flooring, roof, cabinets, etc.  It is also important before you make an offer to diligently assess the local real estate market and review comparable homes and what these similar homes in the neighborhood were sold for.

Reviewing comps is without a doubt the leading method to determine what the fair value is and to make a respectable offer so you are not wasting the seller or agent’s time.

Rule #3 – Always get a home inspection
As mentioned above the home inspection help you in negotiating a lower effective price. Just like buying a car you want to discover if the home has any current problems or small issues that can lead to future issues prior to putting in an offer.  The cost of a home inspection by a licensed professional is paltry compared to the cost to buy the average home.

Therefore, do not overlook the value of a home inspection prior to buying it unless you have extensive knowledge about homes.  It is a smart choice to use word of mouth referrals because a lot of the best home inspectors get their business from referrals.

Rule #4 – Never become unfriendly with the sellers
Lots of real estate transactions are cancelled by the buyer or seller due to increasing hostility between the parties.  It is important to avoid alienating the seller of the home during the process and to finding faults for every little aspect throughout the contract process.

Putting the seller in good spirits gives them confidence about you completing the purchase. It also can make the transaction finish without problems or delays, and provide the ideal atmosphere for both the seller and buyer.

How to Ensure a Smooth Homebuyer Experience

There is a proper etiquette for doing many things in our everyday lives and that also includes buying or selling a home. When going out to view Orange County homes for sale as a buyer, there are some behavioral constraints to do that will help provide a simple and beneficial experience, regardless if you’re the buyer or seller.

The following are home buyer manner’s and guidelines:
1. Pre-Approval – Get your financing pre-approved before going to search for a home. It can be a tremendous waste of time to view homes you may not qualify for. The seller, including any family members, their listing agent blocked out some time to show the home and have a justifiable reason that the prospective buyer(s) entering their home are qualified to buy it.

2. Scheduling – Consult with your agent to establish a reasonable schedule of homes to view during the day. If you are the kind of person who prefers to take their time when viewing a home, tell your agent from the start so they don’t try to jam in a lot of showings in a couple of hours. Conversely, if you prefer to walk through properties fairly quick, tell them that as well.

Be respectful of time schedules and the procedure to look at homes during a pandemic. Each home you see is unique. Some homes are occupied by the owners or tenants, have children or pets, some sellers work flexible hours from home, and so forth. Developing an acceptable schedule for showings can be accomplished by your agent who’s aim is to work through a variety of unique situations and showing instructions.

Some home showings require 2 or 4-days advance notice than other properties, important instructions to follow, and more. Making an appointment to see homes results in agents and offices communicating with each other to coordinate all details.

If you drive up then decide the home is no good before ever setting foot inside is not a good method. Give the chosen properties an opportunity to win you over.

Keep in mind, there is a seller that blocked out some time to let you see the inside of their house. You can never be 100-percent sure until you see the home’s interior and you may not have a lot to see in a low inventory market.

3. Viewings – How long should you view the home? Although there is no official rule, anywhere from 15-30 minutes at maximum for a first showing is regarded as appropriate.

If you only have a handful of homes to see, taking longer may be acceptable. However, if you are scheduled to see 10 properties, viewing every house for 30 minutes will become a very long day and you may not have time to fit them all in your allotted time.

The ones you like can always be viewed again. Before you make an offer on a home visit the home twice if possible. Don’t forget you will have a physical inspection in the beginning if it’s in the contract so you’ll have the opportunity to see the home again at that time.

The important things to bring with you are a tape measure to see if your furniture will fit or if the room has enough space for a dining table, couches, wall units, custom bedroom furniture, and your things for other rooms in the house.

4. Personal Opinions – Avoid talking about the property in the open while in the home or nearby outside. Talk it over in your vehicle or somewhere else private. The sellers or the neighbors may be able to hear your conversation.

It is the sellers property and they likely can hide a audio recorder somewhere inside and outside the home during your scheduled time! Many sellers already have video surveillance equipment to catch house thieves so audio recording is not off limits.

5. Groups – Try to reduce the field trip effect of inviting your friends, relatives, or associates trampling through a home showing. It is best advised that relatives and friends that are real estate experts are better served to tag along once you have made a decision on two or three homes. Keep in mind it is essentially your choice and your mortgage payment unless someone in your group will be co-borrower or invest in the property.