What is my house worth?

Many factors affect the value of a home. Here are some of them:

1. The state of the national and local economy (e.g. employment, interest rates)
2. The state of the local real estate market (e.g. seasonality and trends)
3. The neighborhood, schools, specific location and orientation in the neighborhood
4. The house size, type and condition
5. The competition and demand

Some of these factors are objective (e.g. size and schools), others are subjective (orientation and type). In addition, houses are not commodities that can be compared easily to each other. Determining the Fair Market Value (FMV) of a house is as much art as it is science.

Given the above complexity in determining the FMV of a home, one should understand that online services such as www.zillow.com or www.eppraisal.com are probably off by as much as 30% of the true FMV, simply because these services are using a very limited set of tools to arrive at the FMV of a home. This is true of real estate agents who do not personally inspect the subject home as well as comparative homes.

For a comprehensive analysis of your house's fair market value, see My Home Value.

Tips on how to get more for my house

As a homeowner you have some control over the eventual price that you'll get for your home. You can control the condition, appeal and size of the house, the time you'll put it on the market, plus the marketing and pricing strategies.

Follow the links below to get an overview of the impact you can have on how much you'll get and how fast you could sell your home.

1. The relationship between remodeling costs and resale value

2. 10 must-do repairs before selling. Tackling these basic, inexpensive improvements will help your home stand out from the crowd in a difficult market.

3. Control the appeal of your home:
Tips for getting the most out of staging
Staging helps sells homes

4. Need to get an estimate for your project?

1. Call me for a list of my favorite contractors
2. Search one of these web sites:

• Matching Homeowners to Pre-screened Service Professional

For a free consultation on what are the best strategies to get the most out of selling your house, call or send me an email.

California tax law

California tax law allows taxpayers to permanently (or temporarily) reduce the assessed value of their home, and/or transfer their protected Proposition 13 assessed value. Below is information about the major programs

Proposition 13 -Tax low

Proposition 58 - Parent-Child Transfer

Proposition 60 - Property Owners At Least 55 Years Old (within county)

Proposition 90 - Property Owners At Least 55 Years Old (between counties)

The house selling process

The Escrow Process

What are the expenses associated with selling my house?

Selling a house evolves many professions and many steps. While the actual cost depends on the selling price and varies from city to city and between counties, generally these costs can be divided into the following categories:

1. Home Inspections. There are many types of inspections that can be performed on a house. The most common ones are structural, roof, termite, pool, foundation, chimney, permit, and environmental. The cost depends on the size of the house and varies from a few hundred dollars to a few thousand. In general, I would strongly recommend starting with the basic inspections and then, based on the outcome, decide if others are needed.

2. House preparation. The objective is to make the house as attractive as possible to potential buyers. This may vary from just cleaning or staging to major remodeling and the cost will depends on what is done. It may not be cost effective to invest the money in remodeling; you should consult your agent to what is the smart thing to do.

3. Marketing

1. Staging
2. Onine and print advertising

4. Commission

1. Listing agent
2. Selling agent

5. Settlement

1. Transfer taxes
2. Sales taxes
3. Title insurance
4. Escrow fees

   Registration Document preparation Shipment

6. Pre-paid

1. Taxes
2. Insurance
3. Interest

What should I expect from my Realtor?

Resources

http://www.neighborhoodscout.com/

Real estate closing costs often take buyers by surprise because they are uninformed about the extent and source of these costs. Generally, closing costs are around or under 1/2 of a percent of the total purchase price, excluding any points the buyer may be paying on his/her loan. Thus, on a $1 million purchase price expect to pay approximately $5,000 in closing costs if you did not pay for points on your loan.

This article examines the typical closing costs a buyer is expected to pay. It first discusses which closing costs vary and then which closing costs are generally fixed.

Variable closing costs

A. City transfer taxes

Transfer taxes, which can be a large factor in closing costs, vary depending upon what city the property is located in. Three cities in Santa Clara County have city transfer taxes --Palo Alto, Mountain View and San Jose. The transfer tax --$3,300 per $1 million in all three cities --is evenly split between the buyer and seller. Thus, if you are purchasing a home in one of these cities, the buyer(s) will owe $1,650 in city transfer tax on a $1 million purchase. In San Mateo County the only city with a transfer tax is San Mateo, which is at a rate of $5,000 per $1 million and is also split evenly. All counties have a transfer tax of $1,100 per $1 million, but this cost is entirely paid for by the seller.

B. Title insurance and escrow fees

Before the allure of not paying for a city transfer tax has you redirecting your home search to San Mateo County, realize that buyers pay more title insurance in San Mateo County versus if the home was in Santa Clara County. The difference is that in Santa Clara County the norm is that the seller pays for the buyer's title insurance and the buyer only pays for the lender's title insurance. Conversely, in San Mateo County, the buyer pays for the buyer's primary title insurance policy as well as the lender's.

For a $1 million dollar purchase in Santa Clara County, title fees will be approximately $970, versus approximately $3,700 in San Mateo County. These fees do not vary much, depending upon which title company is chosen, because the rates are regulated by the state of California. Of course, the savings you get in Santa Clara County will be paid for later when you are a seller and you must pay for the buyer's title insurance policy.

Points on your loan

The variable with the greatest effect upon the magnitude of your closing costs are points on your loan. A point, or 1% of your loan (for example, $10,000 on a $1 million loan) is used to buy down your interest rate. For example, a 10-year-fixed mortgage may be at 5.75% with no points or 5.5% with one point or 5.25% with two points. (Points are viewed by the government as prepaid interest and consequently are deductible from your state and federal income tax just as your mortgage interest is.)

Points are deductible in the year they were purchased. Thus, if during either January or December 2006 you paid a point for your loan, the full amount of that point is deductible from your taxes in 2006. Note that while points are tax-deductible for purchases, for refinances the deductibility of the points is spread out over the life of the loan. See your tax advisor for more details.

The interest that you pay on your mortgage is tax deductible on both your federal and state taxes. This includes some interest that you will pre-pay at the closing for your first month of ownership. Your lender will send you a yearly total of the amount of deductible interest to you at the end of each year.

Other lender fees

The closing costs associated with a mortgage can vary by a great deal. When choosing a loan these fees should be scrutinized as closely as the mortgage rate. Some lenders will have a lot of "junk fees" such as an underwriting fee, review fee, etc. I recommend lenders who have low closing costs, thus when you hear their rate you know that there are no hidden surprises. Other fees, such as an appraisal fee, generally range from $350-$450 for a $1 million purchase. Overall, fees from a lender should not exceed $1,500 on a $1 million loan, excluding any fees you pay for points.

Property taxes

Property tax is prorated, in that the seller pays the property tax while he/she owns the property (including while it is in escrow) and the buyer pays the property tax once the property is transferred when the escrow closes. Whether property tax is a debit and increases your closing costs or is a credit and reduces your closing costs depends upon what time of year your home is bought and whether the seller has paid his/her upcoming property tax bill.

Non-variable closing costs

Certain closing costs do not vary depending upon the location of the property or what lender you choose, although these costs can change depending on the circumstances mentioned below.

A) Homeowners insurance

A typical homeowner's policy will be about $1,000, more with a very low deductible and less with a higher deductible. Generally, your best rates will come from the same company that provides your auto insurance, for it will probably offer savings when insuring multiple assets. You generally pay for your first year's insurance policy in escrow, but can pay the insurance company directly if desired.

B) Homeowners' Association (HOA) dues

HOA dues, which are only paid for condos and town homes, generally run between $250-$450 a month. You pay in advance for your first one or two months of HOA dues in escrow. The one positive of HOA dues is that this eliminates your need to get a homeowner's policy.

C) Recording, notary, wiring and document preparation fees

These various fees from the title company generally total about $300.

To summarize, closing costs for your purchase in Santa Clara County should be about 1/2% of your purchase price, or $5,000 on a $1 million purchase, excluding lenders' points. These fees will be slightly higher if your home is in San Mateo County, for then buyers pay for more in title fees, which outweighs the savings in city transfer taxes. Lender's points can quickly increase this amount, but they are an option to consider if you want to increase your tax deductions for that year.

We will go over closing costs in more detail before we close on your home.