Los Angeles and South Bay Real Estate Video Blog with Lenny LaRocca

What Does the LaRocca Real Estate Group Do Differently?

Lenny@LaRoccaRealEstate.com (Lenny LaRocca) — Tue, 27 Feb 2018 13:14:00 -0800

What does our team do differently when we represent our clients? Today, let me explain.

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All of us at the LaRocca Real Estate Group feel very fortunate to have the opportunity to serve all of you.

Today, I’d like to talk about how our service differs from that of others in our industry. First of all, communication is a No.1 priority for our team. Whether it be in real estate, family, or friendships, communication is important. For us, quality communication means being timely and direct.

But there are a number of other things we do differently. We’re also a very structured group. Every member of our team is professionally coached, and we have a specific plan of action we follow for every one of our transactions.

This plan isn’t new, though. It has been used in the real estate industry for more than 40 years. The difference our team brings to this plan is the people we have executing it.

Of course, before we can execute this plan, we have to generate buyer leads. One question we frequently hear from sellers is how we generate these leads. They want to know where our buyers come from.

What does our team do differently when we represent our clients? Today, let me explain.

About 40% of buyers may come from another agent or broker in the community a listing is in. Buyers also come to us after having seen signs outside of properties. Many people think that buyers come from open houses, but this isn’t typically the case.

Because our market is so competitive right now, buyers really need to be prepared ahead of time if they want to be successful. The most important thing a buyer can do is to get pre-approved with a reputable lender.

If you have any other questions, would like more information, or are interested in letting us represent you during your real estate transaction, feel free to give me a call or send me an email. I look forward to hearing from you soon.

How Is the 2018 Real Estate Market?

Lenny@LaRoccaRealEstate.com (Lenny LaRocca) — Wed, 14 Feb 2018 12:12:00 -0800

The 2018 real estate market started out with a bang. How are market conditions for buyers and sellers right now?

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What’s happening in the February real estate market? The new year started out with a bang. Historically, the market is slow at the start of the year and picks up towards the end of January or February. Right after January 1, 2018, we saw an increase in the number of homes for sale and the number of properties going under contract. All in all, the market remains strong. The economy continues to roar. However, the Feds are going to increase interest rates over the course of 2018, which will impact buyers and sellers. There are still a few favorable elements in our market for sellers. We are currently running around 18% less inventory for sale compared to this time last year, and we know that 2017 had even less inventory than the year before that. As a result, prices will remain high and strong, which is great news for sellers. Additionally, millennials are starting to enter the market, which is a strong element for our economy. That said, it looks like 2018 will continue in a seller’s market.

All in all, the market remains strong.

If you are a buyer, the good news is that interest rates remain low at around 4.25%. The bad news is that limited inventory leads to more competition, so you need to have all your ducks in a row when you enter the market. The other bad news for buyers is that the Fed has announced that they will increase rates again in 2018. Rates are expected to go up three to four times between now and the end of the year. Because we are running low inventory and buyers are having a hard time finding properties, we are starting to see more activity with pocket listings. By definition, a pocket listing is when a seller wants to sell but doesn’t want to go through the rigamarole of putting their house on the MLS and dealing with showings. We are definitely seeing an increase in pocket listings in the immediate market. In 2017, 15+% of homes sold were pocket listings. That means if you’re not working with a real estate professional who’s tapped into the real estate community, you will probably not know about these opportunities to buy a home. If you have any other questions about buying or selling a home in 2018, just give me a call or send me an email. I would be happy to help you!

What Do the Latest Stats Tell Us About Our 2018 Market?

Lenny@LaRoccaRealEstate.com (Lenny LaRocca) — Fri, 19 Jan 2018 10:28:00 -0800

According to the latest statistics, it’s a seller’s market in LA County as we begin 2018, but there is good news for buyers as well.

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As we head through January 2018, the latest statistics tell us we’re in a seller’s market.

There were 818 homes sold in December 2017, which was a decrease of 18% compared to both November 2017 and December 2016. The total number of homes closed in December 2017 was 701 units, which was down 4.5% compared to November 2017 and 8.2% compared to December 2016.

There were 530 homes placed under contract in December 2017, which was a staggering drop of 23.7% compared to November 2017 but an increase of 4.5% compared to December 2016.

Most of these statistics were taken from South LA County and, specifically, the South Bay. These numbers lead me to believe that we’ll continue to have a shortage of inventory and have a very active market as long as interest rates cooperate.

In December 2017, the average price per square foot continued to appreciate and settled at $549. The average days on market in December 2017 was 35 days, which was a 2.8% drop compared to November 2017 and a 23.9% drop compared to last year.

The average list price for homes in December 2017 was $1,755,000, but the average sold price was $929,000. That average sold price dropped 1.1% compared to November 2017 but increased 8.3% compared to December 2016.

Lastly, our average inventory for December 2017 was 1.2 months, which was a 14.6% drop compared to November 2017 and a 7.7% drop compared to December 2016.

2018 will be a fantastic year for buyers and sellers.

According to a five-year study comparing the homes for sale versus the homes that have sold and those that are pending, we started and ended each year between 2012 and 2017 with a low level of inventory. In December of those years, we had between 600 and 800 homes listed for sale. As those years progressed, we usually saw a 20% to 25% increase in inventory.

All in all, 2018 will be a fantastic year whether you’re a buyer or a seller. Prices will continue to remain strong for sellers, and buyers can still take advantage of interest rates near the 4% mark.

If you have any more questions about our current market or you’re thinking of buying or selling a home soon, don’t hesitate to call or email me. I’d love to help you.

3 Things That Can Dramatically Affect Your Home Sale

Lenny@LaRoccaRealEstate.com (Lenny LaRocca) — Tue, 2 Jan 2018 10:21:00 -0800

If you have to relist your home because your previous transaction fell out of escrow, there are three things that can dramatically affect its sale.

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We are in a highly competitive seller’s market right now. The ball is in the seller’s court, which means that most of the time they can choose which offer to accept, the closing date to settle on, and which improvements will be made to the house prior to the sale. However, it’s important to remember as a seller that you don’t go too far and cross the line. There are many factors that can affect the sale of a home while in escrow. For one thing, interest rates can change and bump the buyer out of contract. The buyer’s financing may also fall through due to a financial hardship or a loss of employment. The appraisal could also not come in as high as the agreed-upon price. All of these examples are good reasons that sellers and buyers work together to make sure the sale is completed. Be advised that though the market is good, inventory levels have risen a little bit. Part of that can be attributed to the end-of-year holiday cycle, but buyer demand is still high and sellers can still negotiate the best deal for them.

A buyer in hand is worth two in the bush.

Should a transaction fall out of escrow, though, there are three factors that can dramatically affect your ability to resell your property: 1. Because the property was in escrow and off the market for two to six weeks, it’s not

considered “fresh” in the eyes of buyers.

2. Statistically, the next offer you get will probably be lower than your original offer.

3. A new buyer means you have a whole new set of circumstances and a new inspector
who may recommend different repairs on top of the ones you already made for the
previous buyer.
Even though we’re in a strong market, we like to remind our sellers of the following adage: A buyer in hand is worth two in the bush. Even though the adage doesn’t quite apply, the message is clear. If you have any questions about things that can affect your home sale or you have any other real estate needs, don’t hesitate to reach out to me. I’d be glad to help you.

Is a Market Shift on the Horizon in South Bay?

Lenny@LaRoccaRealEstate.com (Lenny LaRocca) — Mon, 27 Nov 2017 12:34:00 -0800

According to the latest statistics, we may be on the verge of a market shift. However, it’s still a great time to both buy and sell in the South Bay marketplace.

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My team and I believe we’re seeing the signs of an early market shift, and I have the numbers to prove it. If you follow along in the video above, you’ll see several graphics with statistics that reflect the year-to-date results of our market through September 2017. Let’s start with home sales. There were 1,360 homes for sale in September 2017, which was a decrease of 1% compared to August 2017 and an 11% decrease compared to September 2016. The number of homes closed in September 2017 totaled 861 units, which was an 11.2% decrease compared to August 2017 but a 3.6% increase compared to September 2016. There were 883 homes placed under contract in September 2017, which was a 3.6% decrease compared August 2017 but an 11% increase compared to September 2016. The average price per square foot in September 2017 was $525, which was a 1.1% drop from August 2017 but an 11% rise compared to September 2016. We’ve had a shortage of inventory throughout most of 2017, so that 11% year over year increase shows that buyers are more active and paying a premium for available homes. The average days on market for September 2017 was 33 days, which was a 6.5% rise compared to August 2017 but a 29.8% drop compared to September 2016. Buyers are more active than they were a year ago, but because we’re seeing a month-to-month slowdown, I believe that slowdown will continue. Properties in September 2017 sold at about 97% of their list price, but that number had been dropping over the last month or two, which is another indicator of a market slowdown.

We’re still in a seller’s market, but now is a great time to buy or sell.

The average active sales price per square foot for September 2017 was $1,654, which represents a 1% drop compared to August 2017 but a 10.6% spike compared to September 2016. The average sold price per square foot for September 2017 was $922, which was a decrease of 3.5% compared to August 2017 and 14.5% increase compared to September 2016. These statistics explain why whenever my clients ask me how much our market has appreciated from 2016 to 2017, I say a fair answer is about 10% to 11%. Lastly, we’re averaging about 1.6 months’ worth of inventory for September 2017, which is up 14.4% compared to August 2017 but down 11% compared to September 2016. As these numbers show, we’re still in a seller’s market, but now is a great time to buy or sell. Mortgage rates are still hovering around 4%, and our economy is still robust. If you’re a seller or an investor who wants to lock down your gain from the past three, five, or seven years of appreciation, this is without a doubt the market to do that. If you have any other questions about our market or you’re thinking of buying or selling in the Los Angeles County/South Bay marketplace, don’t hesitate to reach out to me. I’d love to help you.

Explaining the Difference Between FHA and Conventional Loans

Lenny@LaRoccaRealEstate.com (Lenny LaRocca) — Fri, 10 Nov 2017 13:19:00 -0800

Each of these loans are geared toward helping first-time homebuyers achieve the American dream.

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What is the primary difference between FHA and conventional loans? It actually comes down to a few key factors. First is the down payment amount. FHA loans are convenient and a little more lenient than a conventional loan, but can be a little riskier than a conventional loan. I’ll explain what I mean by that a little later on. With an FHA loan, you can make a down payment of as little as 3.5%. Even if you don’t have this 3.5% on your own, you can absolutely have the down payment gifted to you by a family member, employer, or another third party. The only condition is that the lender can trace where the gift came from. Conventional loans are actually even more aggressive. You can qualify for a conventional loan with as little as 3% down. What each of these loans is geared toward is helping first-time homebuyers achieve the American dream. The second difference between these loan types has to do with qualifying factors and credit score. For an FHA loan, you only need a FICO score of 580 or more. This is a fairly low score, and therefore is something most people could achieve.

Each of these loans is geared toward helping first-time homebuyers achieve the American dream.

For a conventional loan, you’ll need a minimum FICO score of 620. So, why is this important? As I mentioned earlier, FHA loans are considered a little riskier than conventional loans. With an FHA loan, there is a mortgage insurance premium. Any time that a buyer purchases a home with less than 10% down, they are required to pay this premium. Here’s the catch on an FHA loan: The mortgage insurance premium will stay with the loan for its entire duration. Even if you go above 10% of the loan-to-home value ratio, you’ll still have to pay the premium. Conventional loans have a premium mortgage insurance, which is typically less costly than the FHA version of mortgage insurance. This premium mortgage insurance will fall off from the loan once the homeowner owns 22% of equity in the home. If you have any other questions or would like more information, feel free to give me a call or send me an email. I look forward to hearing from you soon.

Can You Define These 7 Real Estate Terms?

Lenny@LaRoccaRealEstate.com (Lenny LaRocca) — Mon, 9 Oct 2017 12:10:00 -0700

Some real estate terms can be daunting to buyers. My goal is to help you understand them better, so you can navigate the process more comfortably.

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Searching for a home can be an intimidating process, especially with regards to the language that comes up during a real estate transaction. For today’s topic, I’ll be providing a short glossary of key real estate terms you should know as a homebuyer. My goal is to make you feel more comfortable with some of the basic terminology.

Closing costs: The cost to complete the real estate transaction. These costs are in addition to the price of your home. Some examples could be your loan, the closing cost points on your loan, transaction fees, escrow costs, etc.

Appraisal: A professional analysis used by your bank to estimate the value of your property. This includes examples of similar homes that sold in your immediate market.

Credit score: A number ranging from 350 to 850 that is based on an analysis of your credit history. Your credit history plays a significant part in securing a home mortgage; it helps the lenders determine how much of a loan you would qualify for. Many buyers believe you need a score over 780 in order to get a good home loan, but in fact, over 55% of all the home loans are done with buyers with FICO scores less than 750.

Down payment: A portion of the cost of the home paid up front to secure the purchase of the property. A down payment varies widely depending on where you are in the US, and how competitive you want to be in your presentation of your offer to buy a home. I’d love to elaborate more on that specifically with you, so give me a call.

Escrow: The holding of money or documents by a neutral third party for closing.

Mortgage interest rate: The interest rate you pay to borrow the money you need to buy your home.

Pre-approval letter: A letter from a mortgage lender indicating you qualify for a loan for a specific amount and that your income and assets have been verified. This letter is a must-have in the highly competitive market we’re in.

We as real estate agents want to help you get through this sometimes confusing process. The negotiation of the transaction can also be overwhelming, but we’re here to help you. If we can assist you in any way regarding buying or selling a home, please reach out to me and I’d love to help you out.

Why Is the Average Length of Homeownership Rising?

Lenny@LaRoccaRealEstate.com (Lenny LaRocca) — Mon, 25 Sep 2017 11:30:00 -0700

The length of homeownership is rising both here in California and across the United States. So, why is this happening and what does it mean for the real estate market?

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Length of homeownership has increased not only here in California, but nationwide. A recent study conducted by the Adam Data Solutions Group collected information from 11 major metropolitan cities in California, and it found that the typical length of homeownership is almost two years longer than the previous average of five to seven years. Nationally, the length of homeownership has increased by about a year and a half. Today, I’d like to take a look at some of our nearby counties. In Los Angeles and Orange County, the average length of homeownership in 2012 was 7.11 years. As of March of this year, the average length of homeownership in those same counties is now at 9.59 years. So, why has this change taken place? Many people believe the recent recession has a lot to do with it. As I like to say, many homeowners may not love their home, but they do love their mortgage. Other areas saw similar changes. San Francisco went from 7.72 years of ownership in 2012 to 9.95 years today. Also, Silicon Valley went from 5.75 years in 2012 to 9.79 years in 2017. This shows us a fairly consistent trend across many major cities in California. Let’s also take a look at San Diego. In 2012, the average length of homeownership in San Diego was 7.3 years. Now, the average length of homeownership in San Diego is up to 9.43 years.

We’re seeing a very healthy market, so now is the time to make your move.

One of the things this trend tells me is that now is the time to sell. This is something I advise strongly to my sellers, since today’s inventory is low and demand is strong. Low interest rates are also playing a key role in buyer appetites on the market. At the beginning of 2017, we predicted that a lot of buyer consumption on the market would be coming from millennials. This has happened to a degree, but not yet to the extent that many assumed would be the case. All this just goes to show that you shouldn’t wait around on what you expect might happen from the market. For example, a lot of my buyers have been asking me if I think they should wait for prices to drop. However, my advice to buyers is not to wait. You never know where interest rates or the economy will be tomorrow. Now is the time to make your move. We’re seeing a very healthy market with great interest rates. If you have any other questions or would like more information, feel free to give me a call or send me an email. I look forward to hearing from you soon.

When Should You Hire a Probate Expert?

Lenny@LaRoccaRealEstate.com (Lenny LaRocca) — Mon, 11 Sep 2017 10:34:00 -0700

If you need help sorting out what to do with a deceased one’s property and possessions, consult a probate expert.

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Welcome back, everyone! Today’s topic: When should you hire a probate expert?

To begin, let me say that many times, inheriting property is a stressful situation. Outside of the emotional difficulties of losing a family member, there is also the burden of what to do with the deceased person’s property, and possibly also the contents of that property.

Dealing with the house and the belongings within often requires the help of many other people. My team and I help out families in this situation—we have many resources that we can bring to the table to help you and your family with any decisions about how you would like to move forward.

We work directly with an excellent probate attorney who can help in part with the paperwork, or can complete the legal aspect as it relates to the paperwork.

Additionally, we also have estate salespeople to help sell some of the content of the home or a contractor to help do any work on the home that may need to done before moving forward with listing the home on the market (if the decision is to be listed)

We have many resources that we can bring to the table to help you and your family.

We are also in contact with charitable organizations that can assist in donating any items from the home

Finally, we can bring hauling resources to the site as well, to dispose of any items that you don’t want to (or can’t) sell or donate.

However, many times in these sorts of situations, families are simply looking to get rid of the property, in which case we have many investors who can come to the property and can possibly make a transaction within 24 hours.

No matter what avenue you take, it is important to hire a probate expert to help navigate this difficult situation at this difficult time.

I have assisted many families in this situation and would be happy to help you and yours—and please feel free to forward this video to anyone you know who is dealing with inheriting property from a deceased family member. If you have any questions, don’t hesitate to give me a call.

The Latest in the LA South Bay Market

Lenny@LaRoccaRealEstate.com (Lenny LaRocca) — Thu, 31 Aug 2017 08:44:00 -0700

A lot has changed in our market in the last month, let alone the last year. We’ll go over all the changes for you today.

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A lot of changes have been happening in the LA South Bay market recently, and I wanted to give you an update today on what’s been going on. In essence, we have a very strong market, like most other markets in Southern California. However, our limited supply of sellable inventory is making the buying and selling processes a little more intense these days. Here are some of the numbers you should be aware of:

Our inventory based on closed sales is up 14.7% from last month, but down 23.5% from last year.

There were 1,405 homes for sale in July, which is down 18.6% from last year.

There were 875 closed units in July, which is down 16% from last month, but up 7.8% from this time last year.

The 1,019 homes under contract are up 4.6% from last month and 23.1% from last year.

Our average days on market is down 44% from last year and now sits at just 28 days.

Our inventory based on closed sales is up 14.7% from last month, but down 23.5% from last year.

Our market continues to remain strong.

All in all, our market continues to remain strong for buyers and sellers. If you price your home correctly, it will sell quickly and profitably. If you’re a buyer, interest rates remain low and you have a great opportunity to lock in a rate now. However, competition will be fierce. Keep an eye on our diminishing inventory, because it plays a huge role in your decision to buy or sell. If you have any questions for us or you’re thinking about buying or selling yourself, give me a call or send me an email. I look forward to hearing from you.

What Stays and Goes in a Home Sale?

Lenny@LaRoccaRealEstate.com (Lenny LaRocca) — Tue, 1 Aug 2017 10:10:00 -0700

Today I wanted to take some time to clarify the difference between fixtures and personal property as it relates to a home sale.

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Occasionally, there can be situations in a home sale that can be frustrating for both the buyer and the seller. One specific situation deals with fixtures and personal items associated with the property. In the real estate industry, we called this real property versus personal property. Any good Realtor should know the difference between the two. Make sure that you and your Realtor are on the same page about what is a fixed item and what is personal property. A prime example of an item that isn’t a fixture is the washer/dryer set in a home. You cannot expect a seller to leave those items behind, as they are personal property. Furthermore, the legal definition of a fixture is anything that has been attached to the home and should be given to the buyer as part of the home sale. A way to determine whether something is a fixture is to look at how it’s attached to the property. If the item is nailed, glued, or screwed down, then it usually stays. Another way to look at it is if the item is an integral part of the home, then it will stay as it is a fixture and not personal property. How can personal property and fixtures be confused? A classic example is with the microwave. Many modern homes have built-in microwaves, but sometimes the homeowner will purchase their own microwave and set it on a shelf or in a cabinet. If the microwave were then built into the home and attached to the property, then it would stay with the home. Otherwise, it’s personal property that the homeowner can take with them.

Make sure that you and your Realtor are on the same page.

Items that cause the most issues are window treatments, swing sets, basketball hoops, mirrors, wall-mounted TVs, and light fixtures. It’s important to work with your agent to clarify what is included and excluded in the sale of your property. I find it helpful to list those items right in the listing contract and note those items specifically in the MLS to avoid any confusion later on. Some other items that might be confusing are extra paint that was used in the home, extra tile that was used to update the bathroom or the kitchen, and gardening items that relate to that home’s landscaping features. If you’re buying a property, make sure that you do a thorough final walkthrough with your agent before closing on the property. You want to make sure that those items that you noted when you made an offer on the home are still in place, and if they aren’t, make sure to bring that fact to the attention of your agent. If you have any additional questions about this topic or you’re looking to buy or sell a home, please give me a call. I would be happy to help you!

The Tax Advantages of Homeownership

Lenny@LaRoccaRealEstate.com (Lenny LaRocca) — Mon, 17 Jul 2017 13:47:00 -0700

There are many tax benefits that homeowners get to take advantage of. I’ll cover a few that you should know about today.

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There are many tax advantages that come with homeownership. We helped a record number of new homeowners this year, so we want you to know which tax deductions are available to you. By all means, please talk with your tax adviser before you actually handle these deductions on your annual return. 1. Mortgage interest: You can deduct the total amount of interest paid every year against your taxes. 2. The cost of your loan or loan points: You can deduct the cost of your loan or the points that you paid for that home loan against your current year tax return. In other words, those are 100% deductible in the year you actually bought the home. 3. Deductions for a home equity line of credit: If you take out a home equity line of credit to transfer some of your credit card debt and get a lower interest rate, then you can deduct that interest rate on your home equity line of credit. You cannot deduct the interest rate if it’s on your credit card. If you take out a home equity line of credit in order to make a substantial improvement to your home, you are also able to deduct the interest to the money used against your home equity line of credit. Remember, there are some limits on the deduction amounts for your home equity line of credit. The benchmark for couples is around $100,000 if they file together, and $50,000 when filing individually. That is a lot of interest that you can balance off of your taxes. 4. Property taxes: You can write off 100% of your property taxes. That includes both state and federal property taxes.

Your property taxes are 100% deductible.

There are a few other notable deductions that you may qualify for. Ask your tax adviser for more information about:

Home office deduction 

Selling cost deduction 

Capital gains exclusion 

Moving costs (if you are relocating because of your job) 

Again, check with your tax adviser before you try to take advantage of any of these deductions so that you know exactly what you are getting into.

If you have any other questions about the benefits of homeownership, tax or otherwise, just give us a call or send us an email. We would be happy to help you!

The Convenience of a Home Warranty

Lenny@LaRoccaRealEstate.com (Lenny LaRocca) — Mon, 3 Jul 2017 10:02:00 -0700

Home warranties are a very useful tool. They can be used by buyers and sellers to save on a lot of maintenance costs.

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I’m here today to talk about home warranties and everything you need to know about them, whether you are a buyer or a seller. A home warranty is an insurance policy that covers the cost of repairing or replacing almost any system in your home. They typically cost between $300 and $900 depending on the home, but it can save you much, much more than that in the long run. The great thing about a home warranty is that if something breaks, you don’t have to go through the hassle of finding a repairman or interviewing multiple repairmen for the job. What you can do instead is contact the warranty company, and they will send somebody out. You will have to pay a $50 to $75 service charge per visit, but all of the other parts and maintenance work is covered by the warranty. Your warranty could pay for itself on your first claim.

It’s common for sellers to include a one-year warranty.

Home warranties can be used by any buyer or any homeowner, regardless of how long they have lived in a home. Warranties are especially advantageous for first-time home buyers, most of whom are on a strict budget. It’s very common for sellers to offer a one-year home warranty to buyers for their home. It’s fairly standard. These are fantastic investments. A great insurance policy for the seller and the buyer, and a wise move if you’re thinking about moving yourself. If you have any questions for me about home warranties or anything else relating to real estate, give me a call or send me an email. I look forward to hearing from you.

Why Is the Preliminary Title Report So Important When Buying?

Lenny@LaRoccaRealEstate.com (Lenny LaRocca) — Mon, 19 Jun 2017 08:57:00 -0700

When you start the process of buying a home and enter escrow, it's important to be aware of the preliminary title report and its contents. Here's why.

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When you buy a home and you're in the escrow process, the preliminary title report has three key aspects to it. Dozens of records come into the play about the home you're thinking of buying, and it all has to be disclosed to you as the buyer. The title report is one is one the most important reports in this process because it documents the ownership of the home as well as any liens, easements, or encroachments against the property. A title company compiles all this information and puts into a report that goes to you and your agent. The information in this report is critically important, and you should be aware of the three most important aspects:

The status of the property: Property taxes always show up on the preliminary title report and show how much is owed and how much has been paid. As a buyer in escrow, the important part is making sure any property taxes have been paid before closing escrow; it's actually a condition of closing escrow. If by chance the seller hasn't paid property tax, it will be paid out of the proceeds they'd receive from the sale. Property tax is a top lien item on any preliminary title report.
The legal description: You won't see this is any of the agent's marketing information. It's a written description of the property's location and boundaries relative to nearby streets and intersections.
Mortgage liens: These are generally listed right below property taxes and are listed in order. If a home has two loans on it, the mortgagor in the first position would be noted first and the mortgagor in the second position would be noted second. In all property transfers in escrow between a buyer and seller, the mortgage liens must be paid off prior to the title transfer. When the sales close, the liens must be paid off in the order that they appear on the title report. The seller is left with the net proceeds based on that.

Understanding the preliminary title report is a crucial aspect of buying a home.

Now, this list isn't all-inclusive and there are a variety of other items that could show up on a title report. That why it's so important to understand what's included in that preliminary title report when you're in escrow as a homebuyer. You also want to be clear on what title insurance protects you from. If you have any questions about this step in the home buying process or you're thinking of selling property in the area, give us a call or send us an email soon. We're here to help.

10 Tips to Make Your Home Buying Process Easy & Successful

Lenny@LaRoccaRealEstate.com (Lenny LaRocca) — Mon, 22 May 2017 11:02:00 -0700

Today I want to share 10 tips that you can use as a new homebuyer to ensure a successful purchase and a smooth transition.

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If you’re a first-time homebuyer, here are 10 tips you should focus on to make your transaction smooth and successful: 1. Find a good agent. A good, seasoned agent can carry your interests and negotiate the best deal for you. 2. Location. As the old saying goes, “Location, location, location.” When buying a home, consider location as your No. 1 criteria, especially if you have young children and need to find a good school for them. 3. Use the Internet for all the informational value it has, especially if you’re looking at properties online and searching open house schedules. You can get this information from your agent, but using the Internet is a good way to identify properties you want to see when you have time to see them. 4. Buy a home, not a project. You don’t want to buy a home that needs a lot of work. I have a lot of buyers who seek out fixer-upper homes for the equity gain, which is fine, but you should only attempt this if you have the aptitude, wherewithal, and the capability to do so.

Location is critical when choosing a home to purchase.

5. If you can, be a cash buyer. If you can’t be a cash buyer, get pre-approved before you enter the market. We require all of our buyers to be pre-approved with a credible lender before they come on the market. 6. Get a home warranty policy. Always have a home warranty policy on your home, especially if you’re a first-time homebuyer and you’re busy trying to make your monthly mortgage payments. 7. Make inspection times count. When you’re under contract and in escrow, make sure you and your team do your due diligence to inspect the home you’re buying. Look at the five primary functions of the home: plumbing, electrical, roof, structural, and everything else that’s important. 8. Put safety first. Like I said, location is important, and you want to take a look around the area you’re buying your home in. We always suggest to our buyers that they do a community drive three separate times of the day—early in the morning, midday, and in the evening. 9. Make common repairs as much as you can while in escrow. After the home inspection, certain fixes will probably be needed within the property. Many times, those fixes can be negotiated between you and the seller. Try to finish as many repairs as you can before moving in though so it’s less hassle for you and your family once you’re settled in. 10. Add some finishing touches after moving in. This will add both equity value and market value to your new home. If you have any questions or are looking to buy or sell a home in our market, don’t hesitate to reach out to me. I’d be happy to help.

Should You Price Your Home High in This Market?

Lenny@LaRoccaRealEstate.com (Lenny LaRocca) — Thu, 11 May 2017 09:51:00 -0700

Many buyers think they can get away with overpricing in this market. It’s not a wise move, for a few reasons.

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Is leaving room for negotiation in a home’s list price a worthwhile tactic for home sellers to utilize? We’re in late spring now, and the activity in our real estate market is sky-high. Jobs and wages are on the rise, buyers have a sense of urgency to lock in rates now before they go up, and there simply aren’t enough homes listed for sale to keep up with demand. As a result, bidding wars have become commonplace and home sale prices keep climbing. A common sentiment sellers have is, “Why don’t I just price my home high and leave room for negotiation later if this is such a good market?” The big reason this strategy doesn’t work is because of all the knowledgeable buyers in our market. When you overprice your home, they will know it and move on to the next one. It comes down to pricing the property to sell. Buyers are looking at multiple properties, and they will make an offer on the best value.

It’s best to price your home at market value.

Let’s say you’re driving down a road and need to get gas. There are two stations conveniently located right next to each other. The difference is that one station has gas on sale for $2.50, while the other has gas for $3.00. You will obviously go to the station that has gas for $2.50 without thinking about it, and that’s kind of what happens when you overprice your home. The home that is a better value will get the most attention. It has also been statistically proven that a home gets its most attention from buyers in its first 21 days on the market. The interest nosedives as sellers make price reductions. The buying community will start to think there is something wrong with the property if it doesn’t sell within that time frame. We believe it’s always best to price your home at market value so we can guarantee it will get a ton of activity right out of the gate so multiple buyers can come in and drive the price up. If you have any questions for us or any suggestions for future topics to cover, give me a call or send me an email. I would love to hear from you soon.

What’s Happening in the South LA County Market?

Lenny@LaRoccaRealEstate.com (Lenny LaRocca) — Mon, 10 Apr 2017 09:02:00 -0700

Today, I’ll go over the latest numbers from the South LA County real estate market.

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What’s happening in the real estate market here in South LA County? Right now, there are 1,107 homes for sale. Compared to the 1,253 homes on the market at this time last year, we have seen an 11.7% dip in the number of homes for sale, which is just one indication that we are in a very strong seller’s market. We have about 800 new listings coming on the market every month. Last year, there were 1,020 new listings each month, so new listings have dropped by 27.5%. Again, that just shows that we continue to be in a strong seller’s market. On the other hand, closed sales slightly increased, with 524 units sold each month last year to 537 units sold so far this year. That is an increase of about 2.5%, which means that buyers need to get serious about whether or not they will come into the market. We are averaging about 758 pending transactions per month, which is a 4.5% decrease from the 792 pending transactions at this time last year. This tells us that we have less inventory available in the current market.

We are in a very strong seller’s market.

How much inventory do we have? Right now, we have 2.1 months of inventory available, which is down from 2.4 months the previous year. In short, this means that if no other properties came on the market, we would sell all of our inventory in just over two months, which places us in a very strong seller’s market. The current mortgage rate for a 30-year fixed mortgage is about 4.19%, and the rate for a 15-year mortgage is at 3.41%. Those rates are fluctuating slightly now that the Fed has raised their rates, but generally speaking, they are fairly stable, which is good news for buyers. If you have any other questions about buying or selling a home in our current market, please don’t hesitate to reach out to me. I would be happy to help you!

What Are the Latest Trends in Flooring?

Lenny@LaRoccaRealEstate.com (Lenny LaRocca) — Fri, 10 Mar 2017 11:36:00 -0800

What are the latest trends in flooring? Today I'm joined by my friend and flooring expert Rob Malins to discuss this topic.

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Today I'm happy to be joined by my good friend and flooring expert Rob Malins of The Carpet Guy to talk about the latest trends in flooring. Rob's been in business for about 22 years helping clients with their flooring needs.

Everybody knows about tile, hardwood, and laminate floors, but where's the trend going? As Rob says, carpet started becoming less popular in favor of hardwood floors about 15 to 18 years ago, and now, hardwood floors are the predominant trend. Since installing hardwood floors prior to a home sale can be expensive, the trend of laminate floors came about, costing about half as much as hardwood.

Wood-look tiles are becoming more popular as well. Luxury vinyl tiles are beautiful and look exactly like wood or tile, and they're also very soft and resilient. Since they're good with water, you can have them throughout your home.

When laminate floors first came onto the market, they looked very cheap and tended to be tacky when you walked on them. Now, laminate floors have been improved to look almost exactly like hardwood flooring or stone, and they have a cushion underneath them to make them softer and quieter. It's quite an advantage to have over hardwood, which costs twice as much.

Laminate flooring is almost impossible to damage.

Laminate floors are hard to damage, but if a section has some serious damage, you can just click it out from the wall, replace the damaged piece, and click it back, and you'll be set for the next decade, Rob says. Rob gives his clients enough extra material to keep some in their garage in case they need to replace a piece like this. You can't refinish laminate flooring, but you don't need to because it's almost impossible to damage, Rob says.

Most people are interested in hardwood floors. Rob says a lot of people in his industry are 'racing down to the bottom' to the cheapest hardwood available, and this means there is a large range of quality available in hardwood flooring, but Rob tries to get the best of each category. They have a lot of beautiful options at very low prices, which can help home sellers maintain their equity when they install new wood floors while preparing to sell their home.

If you have any questions for Rob, you can reach him at robmalins@gmail.com.

If you have any questions for me or you're thinking about buying or selling a home, give me a call or send me an email. I'd be glad to help you!

Should You Choose a 15-Year or 30-Year Mortgage?

Lenny@LaRoccaRealEstate.com (Lenny LaRocca) — Mon, 27 Feb 2017 09:57:00 -0800

The biggest difference between a 30-year mortgage and a 15-year mortgage is cash flow. The 15-year mortgage offers more of it, and here’s what you can do with it.

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What’s the difference between a 30-year and a 15-year mortgage?

Between the two of them, the biggest difference is cash flow. With a 15-year mortgage, you’d obviously be paying the mortgage off in half the time. Additionally, the bank would give you a lower interest rate because they’d get their money back in half the time.

For those who can afford it, a 15-year mortgage is a better option.

What does this mean for you as a homeowner? Why should you consider the 15-year mortgage over the 30-year mortgage? Aside from cash flow, there are three other benefits a 15-year mortgage offers:

Once you end your 15-year mortgage, that gives you more cash to invest in other options like retirement accounts
You can spend that extra cash flow to increase your current home or lifestyle.
It gives you extra cash flow to bid higher for a nicer home down the road.

In summation, by compressing your loan period from 30 years to 15 years, you’re ending the loan more quickly, you’ll have a much more favorable interest rate, and it puts you in a better position to have cash for other options down the road.

If you have any questions about this topic, please feel free to give me a call. I’d be happy to speak with you!

Where Is Our 2017 Market Headed?

Lenny@LaRoccaRealEstate.com (Lenny LaRocca) — Mon, 30 Jan 2017 11:05:00 -0800

Major shifts are predicted take place in our market in 2017, so today I want to relay those shifts and give you an idea of where our market currently stands.

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What’s been happening in our real estate market lately? Here are four major impending shifts as predicted by the NAR you need to know about:

1. First-time buyers will play a big part in home sales in 2017. In fact, one-half of those buyers will be millennials. Today, about 33% of younger first-time buyers comprise the whole buying public. In 2017, it’s projected that 55% of the buying public will be first-time buyers. Of that 55%, about 61% of those first-time buyers will be millennials.

2. Affordability will become a big factor with the onslaught of first-time buyers. In 2016, the big issue for buyers was a lack of inventory. In 2017, the issue will be qualifying for a loan.

3. There are three primary attributes buyers will look for in 2017: safe neighborhoods, a larger living space, and a larger yard space.

4. Competition for properties in the suburbs will heat up. This means if you’re looking to buy or sell in 2017, it’s important that you get a jump on that action as soon as possible.
In light of these impending shifts, I want to provide you with a statistical comparison of the current markets in LA County and Orange County.

Competition is heating up for buyers and sellers.

In LA County, the median home price is $484,630, which is over a 9% drop between October and December of last year. Year over year, between November 2015 and November 2016, we had a 5.8% increase in median home prices across the board. When you compare the last two years, from November 2014 to November 2016, we had a 25.3% increase in home values. As a whole, LA County has an unsold inventory of 3.3 months. The average days on market for homes sold is at 36 days.

In Orange County, the median home price is $734,500, which is actually a 2% drop from October 2016 to November 2016. Year over year, between November 2015 and November 2016, the median home price rose 4.2%. Between November 2014 and November 2016, property values increased by 26%. Coincidentally, Orange County also has an unsold inventory of 3.3 months. The average days on market for homes sold, however, is at 49 days.

Obviously, any of these stats would be specific for any micro-markets within either county, but this gives us an idea of where the market in our region stands as these NAR predictions begin to unfold. If you have questions about this topic or any other real estate needs, please feel free to give me a call. I look forward to speaking with you!

Why Should You Buy a Home Instead of Renting One?

Lenny@LaRoccaRealEstate.com (Lenny LaRocca) — Mon, 9 Jan 2017 12:38:00 -0800

In our current market, you’re much better off buying a home instead of renting one. Today I want to tell you why.

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Why should you buy a home instead of renting one? There are three good reasons I want to share with you today.

The first reason is that the cost of renting is on the rise. According to studies, rent increases have far outpaced inflation in recent years. Vacancy rates are low, and the growth in renter households is high. This means that landlords have greater pricing power to set their rents.

The second is the high cost of not owning a home. The average rate of a home price appreciation over the past 20 years has been about 3% per year. Let’s say that you invested $10,000 into a home at a purchase price of about $200,000 and over a period of a five-year hold, that property increased 3%. That means your net increase in appreciation (or equity, if you will) is about $40,000. If you subtract the first $10,000 for your down payment, your total equity growth equates to $30,000. That amount far outpaces anything you could’ve done while paying someone else’s mortgage by being a renter.

Renting amounts to paying someone else’s mortgage.

The third and final reason is that there are many tax benefits to owning a home. In many cases, mortgage interest rates and property taxes are deductible every year. Let’s say you pay $1,200 a month in mortgage interest and property taxes and you’re in a 25% tax bracket. This means you’ll save about $300 a month by owning a home versus renting one.

If you have any further questions about this topic, please don’t hesitate to give me a call. I look forward to speaking with you soon!

How Are Reverse Mortgages Settled?

Lenny@LaRoccaRealEstate.com (Lenny LaRocca) — Tue, 20 Dec 2016 08:58:00 -0800

Reverse mortgages are a complicated subject, so today I wanted to discuss what you need to know about them and how you can pay them off.

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How do you pay off a reverse mortgage on a property?

As more and more seniors turn to reverse mortgages in current times, their surviving spouses and/or children have a couple of options to do this once they pass on.

One of those options is to pay that loan off immediately by putting that property on the market, covering the cost of the sale, and paying off the loan with the net proceeds. Also, if a property is “under water” at the time that the owner passes on, meaning that the loan value is higher than the property value, the home can be sold to the surviving owner(s) of the property for 90% of the market value.

It’s important to note that if a homeowner passes on and they had leased that property out, then that property loan is due immediately. If, by chance, you have an older family member that has a reverse mortgage on a home, you’re gambling a bit if you have that property rented out because, according to the rules, you can’t do that. More importantly, if you do break that rule and the lender doesn’t understand that or is aware of that, then at the time that the owner passes on, there could be some legal issues that arise relative to that tenant’s rights. This is a scenario that you should speak with a real estate attorney about.

Speak with an expert so you don’t leave yourself or your loved ones vulnerable.

Another important factor in a reverse mortgage is the notice of demise. This talks about how the mortgagor determines whether or not an owner has passed on. They do this through a number of different sources, such as searching the social security death index or other proprietary databases that talk about whether the owner is still alive. Your family member may also receive an annual letter from the lender confirming that they’re a) still alive, and b) in the home.

What are the spousal rights when a spouse passes on and there’s a reverse mortgage on the property? The surviving spouse might be able to remain in the home even if he/she wasn’t the co-owner because of certain HUD guidelines. This is important because some borrowers will remove a younger spouse from their home title to secure a reverse mortgage. You have to speak with reverse mortgage companies to understand what those details and requirements are so you don’t leave a younger spouse vulnerable to eviction and potential foreclosure after an older spouse’s death.

Reverse mortgages are a complicated subject, so if you’d like more information about them, please don’t hesitate to give me a call. I look forward to speaking with you!

10 Reasons Why It's Smart to Sell During the Holidays

Lenny@LaRoccaRealEstate.com (Lenny LaRocca) — Mon, 21 Nov 2016 13:12:00 -0800

There are 10 reasons why selling a home during the holidays is actually very smart.

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There are some important reasons to list your home during the holidays.

People looking for homes during the holidays are much more serious, for obvious reasons. More than likely, they have to buy a home, which is why they're out during the holidays.
Less competition. These serious buyers have fewer homes to choose from on the market, which means less competition for you.
The supply of homes will increase dramatically after the new year begins, so there will be less demand for your home. Less demand means less money for you when you eventually sell.
Houses show better when they're decorated for the holidays.

Houses show better when they're decorated for the holidays.
Buyers are more emotional during the holidays than other times of the year.
Some people are forced to buy before the end of the year. This could be for job relocation.
January is traditionally the month for employees to begin new jobs. Since transfer employees can't wait until the spring, you have to be on the market now to capture this market.
You can still be on the market but restrict showings during the six or seven holiday celebration days. We'll still coordinate showings to make things convenient for you, your family, and your guests.
You can sell now for more money and we can delay the closing of escrow until after the holidays.
By selling now, you may have an opportunity to be a non-contingent buyer during the spring when many more houses are on the market.

I hope you found these points informative. If you're thinking about buying or selling a home, don't wait to give me a call. I look forward to hearing from you!

9 Homeowner Renovation Tips

Lenny@LaRoccaRealEstate.com (Lenny LaRocca) — Thu, 17 Nov 2016 08:17:00 -0800

Renovating a home is a huge undertaking that requires a lot of time and money. Today, I’ll give you a few tips on how to avoid some major renovation mistakes.

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When you renovate your home, you are committing a lot of time and money to the project. Renovating a home is almost like running a business! Since renovations can be overwhelming, I wanted to go over a few mistakes for you to avoid.

First, I want to offer a quick tip. Make sure that you take the time to prepare before you start renovations. Choose your contractor and meet with them as if you are hiring them to work for your business.

Now, here is a list of things to keep in mind when renovating your home:

Do your research. Again, make sure you are prepared.
Make sure your measurements are correct. Incorrect measurements can cost you a lot of time and money during the renovation, so make sure you have the right numbers.
Get the proper permits. Some people skip permits in order to save some money. However, cutting corners will cause you a lot of anguish in the future, especially when it comes time to sell your home. Make sure you get all of the required permits that you need.
Set a realistic budget. During home renovations, it's important to keep the scope of work in mind. Know that you will probably go over the budget when all is said and done. If you’ve ever completed a home renovation under budget, then I applaud you because that is very rare.

Most renovation projects go over budget, so be prepared.
Don’t DIY the demolition. Sometimes it’s best to hire a professional.
Don’t go overboard. Don’t demo too much of the house.
Work with an electrician to make sure everything is up to code.
Don’t overload on current building trends. If you want to modernize your home, pick a few current building trends that you really like. If you go overboard and use all of the building trends, buyers may not be interested in your home when you put it on the market 10 years from now.
Pay attention to the quality of the materials you use. While you may be improving your home for your own enjoyment, remember that the quality of materials you use during the renovation will directly impact the resale value of your home.

Those are just a few things to keep in mind during the home renovation process. If you have any questions or if you are looking for a referral for a good contractor or electrician, just give me a call or send me an email. I would be happy to help you!

Tax-Deferred 1031 Exchange: Part 2

Lenny@LaRoccaRealEstate.com (Lenny LaRocca) — Wed, 26 Oct 2016 10:44:00 -0700

We're back with the second portion of our video series on real estate investing and the 1031 exchange. Today we're discussing what it takes to qualify.

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For the second portion of our two-part series about the 1031 exchange in property investments, I'm joined once again by 1031 exchange expert Phil Antwan.

You can see the first portion of this series here.

As I mentioned before, I get lot of questions about the 1031 exchange from clients. Another common question is about which entities can complete a 1031 exchange. Phil points out that any entity can complete the exchange–a trust, an individual, a family trust, an LLC, an s-corp, a c-corp, a partnership, an LP, joint venture–any taxed entity can do a 1031 exchange.

They can also acquire this property anywhere in the country, which is wonderful. For instance, if you're selling property here in California and you need to acquire property on the East Coast or the South, the state and federal governments will allow you to exchange that asset for one or multiple properties throughout the country.

The bottom line, according to Phil, is that the IRS says that when you go into this exchange, you have to go into like-kind property. A lot of people get confused by this, but really, "like-kind” by definition means any investment real estate to any investment real estate. In other words, it can't be your primary residence, or your second home, or a vacation home. To qualify, it has to be a property that you use for business, as an investment, or to collect income from. You could sell a vacant lot here in California and buy a condo in Hawaii and still qualify for a 1031 exchange.

With the 1031 exchange, you can acquire property anywhere in the country.

The goal is to acquire the new property for equal or greater value than what you sell for and to move all the equity from the sale into the purchase. If you do that, the federal government will literally defer all capital gains taxes as you acquire a new investment asset.

So which properties do and do not qualify? Phil reminds us that your primary residence will never qualify, nor will a second home or vacation home. However, if you live in a duplex or a triplex, you can actually exchange the investment portion of the sale and take advantage of the primary residence portion of the sale, so in effect, you're using the property for two different uses: personal use and investment use. You can definitely separate that use via your CPA and do a 1031 exchange.

We hope you learned a lot from our two videos about the 1031 exchange and all the benefits it provides to you as an investor. If you have more questions about it, please call Phil at (213) 479-8800.

If you have any questions about real estate or you're thinking about buying or selling in California, give me a call. We're both happy to help!