Joe Capote

August 31, 2010 • 12:19 pm 0

Announcing my Partnership with Alain Pinel Realtors!

This week I decided to switch office affiliations. I’ve joined Alain Pinel Realtors in Burlingame. Alain Pinel is an established company with a track record of success throughout the bay area. I’m stoked to have joined them! Check out my new website!

My mother Marilyn, who started her real estate career in 1974, once wrote an article on changing office affiliations. Though many things have changed since she wrote that piece, many things have remained the same. As per her advice, I did plenty of research before I made the jump. I really though about what was important to me and what I wanted out of my career as a Realtor. I really wanted to work for an established company with a stong online presence and name recognition. I also knew I wanted to work for a company that could provide superior marketing tools and cutting edge technologies. Finally, I really wanted to work for a company that was professional and team oriented.

After interviewing with many companies, I really felt like Alain Pinel Realtors in Burlingame fit all that criteria. I am proud to announce my new partnership with Alain Pinel and look forward to meeting the needs of my clients for years to come!

Filed under: Buyer's Blog, Market Data, Realtor Trends, Seller's Blog, Technology, Uncategorized

February 22, 2010 • 2:03 pm 1

Deductible Closing Costs in a 1031 Tax Deferred Exchange

When participating in a 1031 tax deferred exchange, it is wise to know what closing costs are tax deductible and which are not. Certainly it’s good business for one to consult with an accountant or a tax professional on this, but here is the quick and dirty overview.

Costs that can be deducted

  • Real estate commissions
  • Title insurance premiums
  • Closing or escrow fees
  • Legal fees
  • Transfer taxes and Notary fees
  • Recording fees
  • Costs related to the 1031 exchange such as Qualified Intermediary Fees

Costs that cannot be deducted

  • Mortgage points
  • Assumption fees
  • Credit Reports
  • Lender’s title insurance
  • Prorated mortgage insurance
  • Loan fees such as application fees
  • Property taxes
  • Utility charges
  • Association fees
  • Hazard insurance
  • Credits for lease deposits
  • Prepaid rents and security deposits

Interested in finding out more about how a 1031 deferred exchange can help you make real estate investments while deferring your tax obligations, visit my website at www.JosephCapote.com.

Filed under: Buyer's Blog, Seller's Blog,

February 18, 2010 • 9:41 am 0

Tax Breaks You Don’t Want to Forget About

With tax season fast approaching and April 15th around the corner, we figured it would be appropriate to discuss the significant tax benefits that accompany real estate ownership. Remember when filing your return to take full advantage of the following:

Mortgage Interest Expense

The government allows all of the interest associated with the financing of the property to be written off as an expense of owning the property. For many real estate investors, especially those with interest only loans, this expense deduction can be substantial.

Depreciation

Depreciation is a method for matching the costs of acquiring property over the properties estimated economic life. The IRS now requires that most properties be depreciated using the straight-line method of depreciation (27.5 years for residential properties, 39 years for commercial properties). Depreciation will act as an intangible expense and will shelter income from taxes.

Expense Deductions

Many of the costs associated with owning and managing a real estate investment, such as management fees and insurance premiums, are deductible. One deductible expense worthy of note is the travel expense. Many real estate investors acquire real estate in places they like to (or have to) visit, and each time they travel to the property, the travel costs are a deductible expense. Not a bad deal if the property happens to be in Maui or around the corner from a relative.

Passive Losses

Due to depreciation and expense deductions, it is possible to own a property that is producing positive cash flow, but for tax purposes showing a loss. These “passive losses” are subject to certain restrictions, but in many circumstances can be used to offset passive income from another investment. In the event an investor qualifies as a “full time real estate professional” passive losses can be used to offset ordinary income. Full time real estate agents should have no problem qualifying for maximum passive loss benefits (see recent US tax court opinion).

For more information, visit my website as www.JosephCapote.com.

Taken from Leonard Spoto, Asset Exchange Company.

Filed under: Buyer's Blog, Seller's Blog, ,

February 15, 2010 • 10:16 am 0

Tips for Pricing Your Home

Real estate markets vary and pricing your home for sale can be challenging. Incorrectly pricing your home may have negative results as it idles on the market. Here are a few tips to help you price your home correctly.

  • Consider comparables. What have other homes in your neighborhood sold for recently? How do they compare to yours in terms of size, upkeep, and amenities?
  • Consider competition. How many other houses are for sale in your area? Are you competing against new homes?
  • Consider your contingencies. Do you have special concerns that would affect the price you’ll receive? For example, do you want to be able to move in four months?
  • Get an appraisal. For a few hundred dollars, a qualified appraiser can give you an estimate of your home’s value. Be sure to ask for a market-value appraisal. To locate appraisers in your area, contact The Appraisal Institute (www.appraisalinstitute.org) or ask your REALTOR® for some recommendations.
  • Ask a lender. Since most buyers will need a mortgage, it’s important that a home’s sale price be in line with a lender’s estimate of its value.
  • Be accurate. Studies show that homes priced more than 3 percent over the correct price take longer to sell.
  • Know what you’ll take. It’s critical to know what price you’ll accept before beginning a negotiation with a buyer.

I hope this helps! For more on pricing and selling your home, visit www.JosephCapote.com.

Filed under: Seller's Blog, ,

February 12, 2010 • 2:08 pm 0

What is Appraised Value?

  • Appraisals provide an objective opinion of value, but it’s not an exact science so appraisals may
    differ.
  • For buying and selling purposes, appraisals are usually based on market value — what the property could probably be sold for. Other types of value include insurance value, replacement value, and assessed value for property tax purposes.
  • Appraised value is not a constant number. Changes in market conditions can dramatically alter appraised value. 
  • Appraised value doesn’t take into account special considerations, like the need to sell rapidly.
  • Lenders usually use either the appraised value or the sale price, whichever is less, to determine the amount of the mortgage they will offer.

For this and other fun real estate stuff, visit my website at www.JosephCapote.com

Used with permission from Kim Daugherty, Real Estate Checklists and Systems, http://www.realestatechecklists.com

Filed under: Buyer's Blog, Seller's Blog

February 11, 2010 • 12:12 pm 0

How to Get an Offer on Your Home

Handy tips for all sellers. When it comes to selling your home, price is king. Quality homes that are priced right are sold quickly.

1. Price it right. Set a price at the lower end of your property’s realistic price range.
2. Prepare for visitors. Get your house market ready at least two weeks before you begin showing it.
3. Be flexible about showings. It’s often disruptive to have a house ready to show at the spur of the moment. But the more amenable you can be about letting people see your home, the sooner you’ll find a buyer.
4. Anticipate the offers. Decide in advance what price and terms you’ll find acceptable.
5. Don’t refuse to drop the price. If your home has been on the market for more than 30 days without an offer, you should be prepared to at least consider lowering your asking price.

For these and other handy selling tips, please visit my website at http://www.JosephCapote.com.

Filed under: Seller's Blog, ,

February 8, 2010 • 10:14 am 0

Low-Cost Ways to Spruce Up Your Home’s Exterior

Make your home more appealing for yourself and potential buyers with these quick and easy tips:

1. Trim bushes so they don’t block windows or architectural details.
2. Mow your lawn, and turn on the sprinklers for 30 minutes before the showing to make the lawn sparkle.
3. Put a pot of bright flowers (or a small evergreen in winter) on your porch.
4. Install new doorknobs on your front door.
5. Repair any cracks in the driveway.
6. Edge the grass around walkways and trees.
7. Keep your garden tools and hoses out of sight.
8. Clear toys from the lawn.
9. Buy a new mailbox.
10. Upgrade your outside lighting.
11. Buy a new doormat for the outside of your front door.
12. Clean your windows, inside and outside.
13. Polish or replace your house numbers.
14. Place a seasonal wreath on your door.

For more ways to spruce up you home before sale, visit my seller’s center at www.JosephCapote.com

Filed under: Seller's Blog, ,

February 8, 2010 • 10:10 am 0

Checklist: 17 Service Providers You’ll Need When You Sell

Planning on selling your home without a Realtor? Take this handy list of service providers you’ll need when you sell.

□                     Real estate attorney
□                     Appraiser
□                     Home inspector
□                     Mortgage loan officer
□                     Environmental specialist
□                     Lead paint inspector
□                     Radon inspector
□                     Tax adviser
□                     Sanitary systems expert
□                     Occupancy permit inspector
□                     Zoning inspector
□                     Survey company
□                     Flood plain inspector
□                     Termite inspector
□                     Title company
□                     Insurance consultant
□                     Moving company

For more on selling your home on your own, check out my Seller’s Center at http://www.JosephCapote.com
Used with permission from Kim Daugherty, Real Estate Checklists and Systems, http://www.realestatechecklists.com.

Filed under: Seller's Blog,

February 4, 2010 • 10:48 am 0

5 Things to do Before Putting Your Home on the Market

If you are considering putting your home on the market, here is a list of handy things to do before you put your home on the market. This will help you prepare for you sale and work to give you the best price in the best timeframe for you home.

1. Have a pre-sale home inspection. Be proactive by arranging for a pre-sale home inspection. An inspector will be able to give you a good indication of the trouble areas that will stand out to potential buyers, and you’ll be able to make repairs before open houses begin. By getting the inspections before putting your home on the market, the negotiation process is simplified as buyers know what to expect for the property prior to setting the price.

2. Organize and clean. Pare down clutter and pack up your least-used items, such as large blenders and other kitchen tools, out-of-season clothes, toys, and exercise equipment. Store items off-site or in boxes neatly arranged in the garage or basement. Clean the windows, carpets, walls, lighting fixtures, and baseboards to make the house shine.

3. Get replacement estimates. Do you have big-ticket items that are worn our or will need to be replaced soon, such your roof or carpeting? Get estimates on how much it would cost to replace them, even if you don’t plan to do it yourself. The figures will help buyers determine if they can afford the home, and will be handy when negotiations begin.

4. Find your warranties. Gather up the warranties, guarantees, and user manuals for the furnace, washer and dryer, dishwasher, and any other items that will remain with the house.

5. Spruce up the curb appeal. Pretend you’re a buyer and stand outside of your home. As you approach the front door, what is your impression of the property? Do the lawn and bushes look neatly manicured? Is the address clearly visible? Are pretty flowers or plants framing the entrance? Is the walkway free from cracks and impediments?

If you are considering putting your home on the market, contact me for a free market analysis and no-hassle consultation. I can help you answer these and other questions regarding the market value of your home. Contact me a http://www.JosephCapote.com or (650) 269-3000.

Filed under: Seller's Blog, ,

February 3, 2010 • 9:59 am 0

Navigating Short Sales: What to Do When the Sale Price Leaves You Short

If you’re thinking of selling your home, and you expect that the total amount you owe on your mortgage will be greater than the selling price of your home, you may be facing a short sale. A short sale is one where the net proceeds from the sale won’t cover your total mortgage obligation and closing costs, and you don’t have other sources of money to cover the deficiency. A short sale is different from a foreclosure, which is when your lender takes title of your home through a lengthy legal process and then sells it.

 1. Consider loan modification first. If you are thinking of selling your home because of financial difficulties and you anticipate a short sale, first contact your lender to see if it has any programs to help you stay in your home. Your lender may agree to a modification such as:

When a loan modification still isn’t enough to relieve your financial problems, a short sale could be your best option if

  • Your property is worth less than the total mortgage you owe on it.
  • You have a financial hardship, such as a job loss or major medical bills.
  • You have contacted your lender and it is willing to entertain a short sale.

2. Hire a qualified team. The first step to a short sale is to hire a qualified real estate professional* and a real estate attorney who specialize in short sales. Interview at least three candidates for each and look for prior short-sale experience. Short sales have proliferated only in the last few years, so it may be hard to find practitioners who have closed a lot of short sales. You want to work with those who demonstrate a thorough working knowledge of the short-sale process and who won’t try to take advantage of your situation or pressure you to do something that isn’t in your best interest. 

A qualified real estate professional can:

  • Provide you with a comparative market analysis (CMA) or broker price opinion (BPO).
  • Help you set an appropriate listing price for your home, market the home, and get it sold.
  • Put special language in the MLS that indicates your home is a short sale and that lender approval is needed (all MLSs permit, and some now require, that the short-sale status be disclosed to potential buyers).
  • Ease the process of working with your lender or lenders.
  • Negotiate the contract with the buyers.
  • Help you put together the short-sale package to send to your lender (or lenders, if you have more than one mortgage) for approval. You can’t sell your home without your lender and any other lien holders agreeing to the sale and releasing the lien so that the buyers can get clear title.

3. Begin gathering documentation before any offers come in. Your lender will give you a list of documents it requires to consider a short sale. The short-sale “package” that accompanies any offer typically must include

  • A hardship letter detailing your financial situation and why you need the short sale
  • A copy of the purchase contract and listing agreement
  • Proof of your income and assets
  • Copies of your federal income tax returns for the past two years

4. Prepare buyers for a lengthy waiting period. Even if you’re well organized and have all the documents in place, be prepared for a long process. Waiting for your lender’s review of the short-sale package can take several weeks to months. Some experts say:

  • If you have only one mortgage, the review can take about two months.
  • With a first and second mortgage with the same lender, the review can take about three months.
  • With two or more mortgages with different lenders, it can take four months or longer.

When the bank does respond, it can approve the short sale, make a counteroffer, or deny the short sale. The last two actions can lengthen the process or put you back at square one. (Your real estate attorney and real estate professional, with your authorization, can work your lender’s loss mitigation department on your behalf to prepare the proper documentation and speed the process along.)

5. Don’t expect a short sale to solve your financial problems. Even if your lender does approve the short sale, it may not be the end of all your financial woes. Here are some things to keep in mind:

  • You may be asked by your lender to sign a promissory note agreeing to pay back the amount of your loan not paid off by the short sale. If your financial hardship is permanent and you can’t pay back the balance, talk with your real estate attorney about your options.
  • Any amount of your mortgage that is forgiven by your lender is typically considered income, and you may have to pay taxes on that amount. Under a temporary measure passed in 2007, the Mortgage Forgiveness Debt Relief Act and Debt Cancellation Act, homeowners can exclude debt forgiveness on their federal tax returns from income for loans discharged in calendar years 2007 through 2012. Be sure to consult your real estate attorney and your accountant to see whether you qualify.
  • Having a portion of your debt forgiven may have an adverse effect on your credit score. However, a short sale will impact your credit score less than foreclosure and bankruptcy.

To find out how I can help you save your credit by coordinating your short sale, call Joseph Capote at (650) 269-3000 or visit my website at www.JosephCapote.com.

Note: This article provides general information only. Information is not provided as advice for a specific matter. Laws vary from state to state. For advice on a specific matter, consult your attorney or CPA. 

Filed under: Buyer's Blog, Seller's Blog, , ,

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