Friday, December 28, 2012

Buyer or Seller: Home Prices in Your Local Market Matter

Whether you're interested in buying or selling a home, it's a good idea to watch the home prices in your local market. There are several places you can go to get the statistics on real estate sales in your area, such as If you're a real estate geek, the information is just plain interesting. Otherwise, it can be a good marker by which to base decisions about your own real estate future.

What local housing prices mean for the buyer

If you're looking to buy a new home, there are several ways you can use median home prices to guide you along your real estate Yellow Brick Road:

. Depending on your budget, and what you are looking for, the median home price for your local area can give you a target range for your mortgage pre-qualification letter. Looking for a fixer upper? The median price should be a sufficient target because most homes you'll be considering will be marketed slightly below that price. If you know you are interested in new construction real estate or more luxurious homes, it's probably worth it to get pre-qualified for a significantly larger figure just to see where you are at.

Are you for real? It's hard to put a price on a home you love. This especially true if you're selling a home that was worth $200K (or more!) just a handful of years ago. Some sellers plug their ears to realtors' suggestions and stick a price tag on their home that's just too high. If you fall in love with the house, or are swayed by the homeowners' passion, you might find yourself with an inflated mortgage. Having a solid knowledge of what houses are truly valued at in the current market will make you a firm negotiator if the house you want has an unrealistic price tag.

What local housing prices mean for the seller

Are you for real? Just as the above scenario for the buyer, you might be shocked at how much (or how little) your house is worth, depending on when you purchased it. By familiarizing yourself with the local market, you'll learn which price range will help your house to sell the fastest.
Do we need improvements here? Take a walk though some homes for sale in your area. You will get an idea of what sells for what - in other words, do you find yourself thinking, "wow! This place is pretty nice compared to our house..." or do you smile and say, "our house is awesome compared to these outdated disasters." This can give you an indication of whether or not you should sink some money into minor - or major - upgrades to bring your house up to par - or not. You might find that a few little staging improvements will be all that is necessary.

Keep in touch with the local real estate market and you will find yourself to be a much more savvy member of the local real estate community.

Thursday, December 27, 2012

How To Buy Your First Investment Property

The time has come. You've been a homeowner for years, you have some money tucked away, and you're ready to purchase your first investment property. Now what? Do you buy a turn-key home and aim for higher rents? Are you planning on flipping it? Have you considered the idea of a vacation home? What happens after the purchase? These are all questions that should be answered before you actually purchase a property.

How to Buy Your First Investment Property

Time is of the essence

So the Mayans were wrong, the world is still intact, the earth's axis seems to be functioning, and the economy is holding relatively steady, the median housing prices will probably continue to rise. This means the sooner you are able to get pre-approved for a loan and begin investment house hunting the better. No reason to spend more money next year for the same piece of property, especially if you end up going with a fixer-upper.

What will you do with the house?

There are several options for the home after your purchase it.

Flipping it. You may decide to purchase a home, fix it up, and flip it - banking on the aforementioned median housing price increases - to make a little money. Unless you are particularly construction/real estate savvy, or have a close member of the family who is an experienced real estate flipper, this might not be the best idea for your first investment property. Real estate flipping is a gamble, and if you don't come out on top...well, it can be a deflating experience.

Rent it. The rental market is still pretty hot right now. Do take into consideration that as more home owners are back on the market, the balance could tip and rents could potentially dip over the next couple of years. Keeping that in mind, a rental can be a way to pay your mortgage, and potentially sock away a little extra cash. Things to note:
  • Finding tenants can be a laborious process
  • You are responsible for most of the maintenance issues
  • Older homes (more affordable) come with more inherent maintenance issues (not so affordable)
  • A good reputable property management company could be your best friend
If you have considered all of these statements, and feel good about them, a career as a landlord might be a good fit for you. Make sure you talk to you CPA about how becoming a real estate investor will affect your overall financial picture.

Did you say vacation home?
One of best win-win options might be to select a favorite destination, one which you know you will return to on a regular basis, and begin looking for a vacation home/investment property. This option can provide the best of both worlds. You will have a more affordable annual vacation and you may even turn it into a profitable experience by renting it when you aren't there.

The answers to these questions can help you to create a solid "Investment Property Business Plan". Once you have a solid plan, you'll be on your way towards further financial stability. Considering moving forward on property investments in 2013? Speak with Sequoia Realty for some advice today.

Friday, December 21, 2012

Does It Make Sense to Buy a Vacation Home?

As airfares continue to rise, vacations continue to get more and more expensive. Once you add up the costs of transportation, paying for a space that accommodates your family comfortably, and all of the meals out, your vacation tab can be significantly higher than you budgeted for. Purchasing a vacation home might actually save your family money each year when you consider tax incentives and potential rental income should you choose the rent the home when you're not there.

Does it Make Sense to Buy a Vacation Home?
Everyone's situation is different, but for my husband and I the decision to buy a second home, to use as a vacation home, was one of the best decisions we ever made. Here's why:

A truly comfortable budget. In the good old days, we schlepped young kids hither and yon, crammed into hotel rooms that weren't as "suite" as originally anticipated, and stared at each other with blood-shot eyes over miscellaneous restaurant tables as our kids drove us crazy. Then we wised up and started renting houses and condos. We loved that! They were more affordable in the long-run, we could rent the same ones year after year so they truly felt like home, and one grocery shopping trip meant we didn't have to eat out unless we really wanted to. Heaven!

Extra Income. After a decade of renting the same home on our visits to Sonoma County, we finally woke up and said, "why the heck are we pouring money into someone else's investment when we could be creating our own?". We immediately went house hunting with a local real estate agent. Within three months were were the proud owners of a second home, had a "free" place to stay on our annual summer vacation, and had it listed with a local vacation property management firm. The first check made payable to us came just a little while later. And then, there are the tax incentives.

Tax Incentives. It's a good idea to check in with your CPA to determine it/how you want to structure your second home as a vacation rental for tax purposes. All we can say is that when we add up mortgage interest and property tax deductions, maintenance costs ("losses") and our overall rental income, we are completely satisfied. Not to mention the absolute delight of having a home that is "ours" and truly is a home away from home when we're on our favorite vacation. Keep in mind that your maintenance costs can require diligent paperwork skills but we have managed to spend time in the home as "fix-up" days (never to be called "vacation days") and still have a good deal of time left over to enjoy Sonoma County Wine country...

Keep in mind that your tax bracket may change whether or not you want to purchase a second home. Tax legislation will be changing for real estate investors. Fortunately for us, our second home has been a wonderful addition to our life and we have never looked back.

Tuesday, December 18, 2012

Local Historic Buildings In Redwood City

Now that fall has settled in, and winter is almost upon us, temperatures have dropped and you might find yourself getting cabin fever on the weekends. This is a great time of year to visit the historical buildings, landmarks, and sites that you think about but never get around to. Plus, many of them are beautifully decorated for the holidays, which means your family can enjoy capturing a little more holiday spirit and the essence of times gone by.

Local Historic Buildings In Redwood City

Redwood City has a rich history, beginning with the indigenous Ohlone people, continuing with the Spanish settlement period, and then the westward movement of white settlers. Our town has preserved many elements of this rich history.
  1. San Mateo Courthouse. Redwood City was considered the "County Seat" beginning in 1957. This is one of the reasons we have such well preserved buildings and historical data. The San Mateo Courthouse, now the home of the San Mateo County Museum, was built in 1910 and is listed on the National Registry of Historic Places. This is a perfect one-stop-shop to view fascinating evidence of the past, from Ohlone artifacts, information about native flora and fauna, and extensive historical archives, there are activities for the whole family to enjoy. They are open Tuesdays-Sunday from 10 a.m. - 4 p.m.
  2. The Sanchez Adobe. Between 1842-46, Don Francisco Sanchez built the Sanchez Adobe as a residence. Over the years it was used as a Roadhouse and an Artichoke packing warehouse. Now the Sanchez Adobe is preserved by the San Mateo County Parks system and is furnished from the original period. You can visit the home and take a tour, or keep yourself updated on a variety of activities you can participate in through the year.
  3. Redwood City Public Library. Our own Redwood City Public Library is also a historic site. Built in 1921, it was originally the Redwood City Fire Station No. 1. Here you can find a an extensive archive of Redwood City's history.
  4. Lathrop House. The Lathrop house was built by Benjamin and Mary Lathrop in the early 1860s. Mr Lathrop was the first County assessor-clerk recorder. He was also one of the founders of the Southern Pacific Railroad. The Lathrop's moved in in 1863 and named the house "Lora Mundi". In 1870 it was sold to General Patrick Edward Conner, and had several other owners throughout the ensuing decades. You can visit the Lathrop House and tour this beautiful historic home which paints a picture of the lifestyle of some of our earliest ancestors. Because it is run completely by volunteers, you may want to call and make a reservation to ensure the house will be open.
  5. Union Cemetery. While not exactly a building, the Union Cemetery does have several large monuments, and you can walk the gravestones and markers which indicate the final resting place for some of Redwood City's earliest residents.
Enjoy a trip through time the next time you have a chance to visit some of Redwood City's historical buildings and landmarks.

Monday, December 17, 2012

The Parks of Redwood City

Feeling cramped with all the holiday guests and indoor parties and festivities? Then take the time to get outside and visit some of this area's beautiful parks. We are fortunate to have so many open spaces at our disposal, allowing us to get out of the concrete mentality and reconnect with Mother Nature.

Take Time to Visit Redwood City's Local Parks

Redwood city has more than 30 parks. Some are less than an acre, others are 400+ acre multi-use parks. There are parks for dogs and skaters too. Here's an overview of some of the most popular.
  1. Neighborhood parks. Don't forget to take advantage of your neighborhood park. Whether you give the kids a much needed 30-minute play break amidst running errands, or lay on the grass and enjoy a picnic lunch or dinner, neighborhood parks are a place where you can enjoy being outside and meeting some of your other community members. Here is a map of the parks west of 101. Here is a map of parks to the east of 101.
  2. Hoover Park. Although also considered a neighborhood park, Hoover Park is one of the largest at just over 10 acres. It is a multi-use park that provides a dog park, summer swim facilities, and three large picnic areas which don't get reserved as often as some of Redwood City's other public park facilities. It also has basketball courts and ball fields if you want to get a group together for an organized sporting event. This park makes a great place for a family reunion as there is a little something for everyone.
  3. Wunderlich Park. If you have something larger than a neighborhood park in mind, head over to Wunderlich Park. Maintained by the San Mateo County park's system, Wuderlich offers a beautiful trail system which will take you through Redwoods, Oaks, Madrones, and open meadow spaces. It is also the home of this historic Folger Family Ranch.
  4. Huddart Park. Huddart Park is another place to feel "off-the-beaten-path" while it's actually just a short distance from Highway 84. It offers BBQ pits, sheltered group picnic areas, ample playgrounds, and trails for hiking and/or riding. You and/or your family will enjoy the transitions from dense Redwood forests to open grassy meadows.
  5. Edgewood Park and Natural Preserve. If the flower-less winter months get you down, just hold out until spring and clear a full calendar day to visit the Edgewood Park and Natural Preserve. It is famous for its spring wildflower displays, although it's a fantastic place to visit year-round. in fact, the winter months can be some of the best if you want a quiet get away without the presence of a lot of people. There are more than 467 acres of woodlands to hike, explore, and provide a gorgeous feast for your eyes.
Edgewood Park

We're so fortunate to live in an area with so many beautiful well maintained parks and open spaces. Make sure you make the effort and visit at least a few of them with friends and family this next year! Also, don't forget to keep an eye on happenings hosted by the Redwood City Parks department on their website here or on their Facebook page.

Do you have a favorite RWC park or a favorite spot in one you'd like to share with us? Let us know in the comments below!

Thursday, December 13, 2012

Redwood City Police Chief a Premier IT Leader

We wanted to take a moment and highlight one of our very own community members' accomplishments.  Every year, Computerworld magazine honors 100 individuals as, "Premier IT Leaders." This year, our own Redwood City Police Chief JR Gamez was named as an honoree. These 100 honorees are designated for their innovative use of technology to solve problems within their business, organization, or community.

Scot Finney, editor-in-chief at Computerworld, states, "the Premier 100 awards program showcases the exceptional work of a dedicated group of senior IT leaders who are driving huge change in their organization." He continued, "every day, these exemplary business leaders make strategic technology decisions that track to their organizations' top priorities. These men and women keep a keen eye on the changing landscape of political, economic, regulatory and technology trends that are driving significant shifts in IT."

We are proud to have a Police Chief and staff who think outside the box and use ever more accessible technology to reach out to community members. This year, the Redwood City Police Department launched Netop's Live Guide communication technology. This revolutionary system allows community members to chat online with police department officers and staff. Citizens can log-in and ask legal questions, get to know their police officers, or make inquiries about tickets or violations they feel were issued erroneously. It is a transformative step in Police Department-Community relations.

Netop's CEO Kurt Bager issued this statement, "The innovative use of Netop's Live Guide communication technology by the Redwood City Police Department shows how committed they are to making their website a place for meaningful, real-time citizen engagement."  He also mentioned that by going live and being willing to chat with community members in real time, the department is, "setting a new standard for online service."

Netop is an organization based in Denmark. They offer the online chat service to public agencies for just $91 per month. The department is using the system on a 3-month basis. Community members can contact the department via live online chats between 9 a.m. and 5 p.m., Monday through Thursday. Depending on community demand, the department will consider expanding the service into the weekends. The online chat service is run by officers who have been injured in the line of duty and have been removed from field for the time being.

Netop's Live Guide communication technology helps to cut down on service calls, allowing more officers to be out in the field where they can provide the most assistance and protection. Chief Gamez stresses the fact that this program is not a substitution for service calls. Redwood City police officers will always make house calls when the situation calls for it. It should be noted that the online chat service is not a substitution for 911 calls. If there is an emergency, citizens should call 911. The department's Online Reporting Service is still available as well.

Thank you Chief Gamez, and members of the Redwood City police department for working creatively to facilitate communication with our community.

Wednesday, December 12, 2012

Are You a Real Estate Investor? Consider How Obama Care Will Affect 2013 Taxes

What do real estate and Obama Care have in common? Tax brackets, that's what. Even if your Adjusted Gross Income Tax (AGI) is consistently under the $250,000 threshold, it only takes one small real estate deal to change everything by altering your net investment income tax (NIIT) figures. If you have considerable real estate holdings, you should consult a professional to see if there is anything you can do to avoid the 3.8% Obama Care Tax.

Things to Consider for the 2013 Tax Year

Activity Loss Rules (Code Section 469)

These tax rules were set in place in order to cut down on superfluous tax shelters. Although the regulations were complicated, in most cases they were applicable to real estate losses rather than real estate gains. However, all that has changed. Under the new rules, real estate profit that is a gain will be considered subject to NIIT. An exception would be if it is subject to self-employment taxes. Unless you are a real estate professional, rents will also be considered subject to NIIT.

What Properties are Exempt for Real Estate Professionals?

For this one, we will give the direct tax code lingo so there's no confusion:

Section 469(c)(7) and Sec.  1.469-9 provide special rules for certain individual taxpayers involved in the conduct of real property trades or businesses (real estate professionals). If a taxpayer meets the requirements to be a real estate professional in section 469(c)(7)(B), the taxpayer’s interests in rental real estate are no longer subject to section 469(c)(2), and the rental real estate activities of the taxpayer will not be passive activities if the taxpayer materially participates in each of those activities.

Can I Qualify as a Real Estate Professional to Avoid Obama Care Taxes?

Probably not. There is a 750-hour annual standard, which seems fairly easy to get around except that hourly total comes with the caveat that you have to spend more time on your real estate activities than any other professional activity. That is going to be a hard one to prove if you work full-time in another profession, or even part-time if you work an average of 14-hours or more per week at another job.

It also requires that you keep meticulous records of how you spend your time. We can assume that these new changes will keep IRS Auditors on the look out. If you are not a real estate professional by trade, then make sure your time keeping records are impeccable in case your 2013 Tax Forms have to run the proverbial audit gauntlet.

If you are a property owner with a consistent history of profitable rental properties, and you handle your own property management for the most part, then you should begin keeping records of your time and discuss the idea of stating yourself a "real estate professional" with your CPA. You might find out it is worth it.

Please Note: This blog is for informational purposes only. You should always speak with a professional tax accountant before making any significant changes on tax forms.

Monday, December 10, 2012

Should You Put Your House On The Market During the Holidays?

Contrary to what you might think, the holidays are actually a great time to put your house on the market. Your instincts might say, "but things are so crazy! Who has time to look? Don't more homes sell during the spring and summer?"  While there are some conflicting messages about whether or not the holidays are a good time to buy/sell real estate, we think the pros outweigh the cons.

Why Put Your House on the Market During the Holidays?

The perfect staging opportunity. If you have been looking at homes, or have been considering selling yours for a while, you probably already understand the importance of properly staging a home for sale. Potential buyers want to be able to envision themselves feeling at home if they purchase your house. Nothing says, Home like one that is decorated for the holidays. In fact, holiday decorating is probably one of the most affordable ways to stage a home and show it off at its best. Pack up your clutter and personalized items and use holiday decorations to showcase your home's best features.

Time to house hunt
. Kids are off on winter break, employees are using up the last of this year's vacation and sick time, and people need something to do with their relatives when sitting around the house gets old. Is there a better opportunity for house hunting? You will probably be amazed at the level of foot traffic your home receives during the weeks surrounding the holidays.

Low competition. Because selling real estate over the holidays seems counterintuitive, many people wait for spring or summer. That means your home has less competition for those who are in the market and need - or want - to buy sooner rather than later. Remember, although the bulk of home sales may happen during the spring and summer months, real estate transactions are occurring everyday, 12-months out of the year. By being a bigger fish in a little pond, you have the advantage in terms of a quick sale without a lot of haggling which can happen when things return to more of a buyer's market.

Interest rates. This holiday season provides a unique window of opportunity; interest rates are still low and an inauguration is just around the corner. Real estate experts all agree that hedging on what the market may or may not do can cost you thousands of dollars. The best strategy is to put your house for sale in a market you are sure about. Buyers who are unsure of what interest rates will do next presidential term might be more antsy to purchase a home before January 20th (or the 21st as far as 2013's public ceremony is concerned). If your house is up for sale, it's more likely it will be snatch up by buyers who want to make sure they benefit from the low interest rates.

This holiday season could be your best opportunity for celebrating a quick and painless real estate transaction. Merry House Selling!

Friday, December 7, 2012

Selling A Home: Staging Your Home

Visiting model homes can become addictive. Even when you aren't in the market to buy a house, visiting a model home can be a quiet, peaceful, and fantasy-driven escape from the real world. The homes are always clean, tastefully decorated, and inviting. You may even find yourself fantasizing about ways to hide until the unit's closet just so you can escape there overnight. This is the exact sentiment you want to invoke in potential buyers of your home. Staging a home properly can be a key component in a fast sale at a desirable selling price.

There are simple ways to stage a home for sale without spending a ton of money or hiring a personal designer. Here are five steps to get you started.

Five Steps to Stage a Home Properly
  1. Remove the clutter. If you are like most Americans, the TV show Hoarders is fascinating and horrifying at the same time. There is a stressful, anxious, and unsettling feeling when we spend time in cluttered spaces; there is certainly nothing peaceful about them. So removing your clutter will help to make sure the first impression home buyers have is not the urge to submit your name and address for upcoming Hoarder seasons.
  2. De-Personalize. The idea is that you want to make people feel like the home you are selling has the ability to become their home. It's hard to do that if your pictures and personal items are everywhere. Try to de-personalize your home as much as possible, creating a neutral space where home buyers have the opportunity to imagine themselves living there. Remove the family photos, trophies, and your collection of 10,000 teaspoons. Meanwhile, just think of all the pre-packing you are accomplishing...
  3. Color. It's wonderful that you let the kids choose their own bedroom colors, or that you were able to make peace with the "totally-wrong-shade-of-red" you painted the dining room walls. But now that you are trying to sell the house, it might be worth it to grab some cheap, neutral paint, and start covering them over. Muted and natural paint colors make a better impression, and (see above) create a less-personalized atmosphere.
  4. Create an invitation. Part of feeling at home in someone else's house is looking around and seeing attractive flower arrangements, fruit in a fruit bowl, and other homey touches that enhance a space. Cleanliness, fresh air, and good smells are other ways to make your home feel like a positive space to spend time. Baking cookies before the Open House, or making sure the home has been aired out before it is shown, can help welcome potential buyers in.
  5. Here comes the sun. Natural light is proven to have a positive effect on humans. Open window coverings, blinds and shades. This will also create a feeling of spaciousness and will force you to clean the space thoroughly - another key element to an inviting home.
These five steps can help you to stage your house and sell it to the first people who can easily imagine calling it Home.

Tuesday, December 4, 2012

Curb Appeal Matters!

If you are putting your home on the market, one of the most important things you can do is to put yourself in the buyer's shoes. If your home has seen better days, it may be more difficult to sell than you would think - even with a reduced price tag. Unless the prospective buyer is an investor, he or she might have a challenging time seeing the house "as it could be." This is why curb appeal is so important.

Why does curb appeal matter?

Forget for a moment that you are selling a house. Instead, imagine you are selling a product. There is a reason why corporate America spends billions of dollars every year on advertising and packaging. Heck! Pepsi spent a cool million on their newest logo re-design. That's because humans are visual creatures and we have a much easier time buying "what is", rather than buying "potential". Most people these days are too busy to buy fixer uppers. They want a property that is relatively, "turn key," meaning they can move in and don't have a whole lot of work to do in order to be comfortable and feel like they can call their new structure home.

Your job as the seller is to package your home in the most attractive way possible so that prospective buyers pull up and have a sense of, "ah..." or at least, "hmmmm...," and not, "Eeeeew!" You want their first impression to be as positive as possible. There are a few things you can do to make your home present itself as an inviting place to live.

It doesn't matter what it looks like on the inside if the outside looks like this!

Simple Steps to Create Curb Appeal
  • Yard. Remove weeds, patch the lawn, and trim/prune plants and shrubs to make them as neat as possible. If the lawn is dead, and you don't want to plant a new one, consider rototilling to give it a more neat appearance. You can use potted plants around the porch and walkways. They will look attractive and you can take them with you when you go.

  • Front Porch. A good cleaning can work wonders for a dingy or cobweb infested porch. Hang a wreath on the front door, polish the door fixtures, and use affordable fabric to cover dingy patio furniture.

  • The little things. There are other things you can do to improve curb appeal:
    • Pressure wash the outside - touch up or repaint trim/doors/or smaller items if they really need it.
    • Re-paint/replace the mailbox and/or exterior light fixtures
    • Repair or replace the house numbers if they are missing, faded, or askew
    • Clean the windows both outside and in
    • Remove any clutter and keep leaves raked up
Many of these items take very little to no money at all. Even if you have to spend a few hundred dollars, it will be well worth your time and money. The way your house is packaged can mean the difference a long drawn out wait for the right buyer to come along or a brief real estate transaction at a higher price.