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Ask the Experts – Real Estate Related

| Canyon Country Magazine | December 20, 2018

by Dean Glosup – Which home sellers are your typical clientele and what is your process?

I buy distressed properties. Generally speaking, if a person just wants to put their house on the market and sell it, they should research and find the most active local brokers in the area. Select a couple and talk to them to make a determination of who you feel best with.

That’s the first thing I do, because when someone wants the most money for their house, I’m not their guy. I am a broker, but I don’t do that.

I buy distressed properties. I buy, fix and sell houses. And the best way to determine whether or not it’s distressed is to see why they’re selling it. The properties I specialize in don’t have to do with location or even type. They’re situational, such as:

Homeowner died and the relatives don’t know what to do with the house
Homeowner has to downsize
The property is in disrepair or is a mess and the homeowners are embarrassed to show the house
In foreclosure or behind on payments
Damaged by fire or flooding, etc.

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I buy, rehab and sell, and generally don’t keep properties. I don’t buy them for top dollar, nor do I sell them for top dollar. I get a deal, then I want to pass that deal on to whoever buys it from me.

What if someone wants to sell their house for top dollar?
Basically, go through the house and update it – if it’s an older house.

Make sure it’s painted and there’s no rotten wood or anything like that.

Your yard should be maintained properly or be brought up to speed.

Staging is important. If you’re living in the house, you’ve got to keep it super neat and clean. If you have moved and there are tenants, move them out and have it professionally cleaned. Then call a property staging company. They’ll come in and move some furniture, bring in plants, etc. When people walk into an empty house, they have to use their imagination and they don’t know if their things will fit.

Dean Glosup of Dean Buys Houses is a 30-year resident of Santa Clarita and has purchased and resold more than 30 houses from 2001 to today. You can reach him by calling 661-618-7015.

by Craig Martin – Is today’s housing market a good time to buy a home?

It’s the American dream to stop paying rent and own a home. Many people wait to buy real estate, but the truth is, you buy real estate and wait. There are many benefits of owning a home, and in the long run, it is the truest way to build stability and wealth for your future.

In many areas of Canyon Country you can still buy a home with a payment equal to what you would pay for rent, yet get all the benefits. With mortgage rates rising but still at historic lows, and with no-money-down VA loans and 3.5 percent FHA loans available, it is still a good time to buy a home.

Most of your home mortgage payment comes back to you over time. A typical entry-level home in Canyon Country goes for around $500,000. If you put down 3.5 percent on an FHA loan, you would only need $17,500 down, which you can also receive as a gift from a family member. The loan balance at current rates would be a payment of around $2,400. Now add property tax, home and mortgage insurance, and your total payment is around $3,000 a month, which is close to what it costs to rent.

Additional benefits and savings include:
Income tax benefits – By deducting loan interest and property tax on your income tax return you can save approximately $500 a month.
Principal reduction – On a 30-year-loan, approx. $700-$800 a month would go towards paying down the loan and building equity at the start.
Appreciation – Historically, homes have gone up an average of around 4.3 percent per year over the last 60 years. That means that over time you could be getting back up to $1,790 monthly from appreciation.

So, by looking at only three of the benefits you can see that your $3,000 monthly payment minus what you get back in income tax benefits of $500, principal reduction of $800 and appreciation of $1,790, you would be getting back around $3,090. That means your monthly home payment is all coming back to you over time, while if you rent, the $3,000 is gone and you never see it again!!

Also, with inflation and current rents going up 8 percent a year, you would save an additional $240 a month after the first year by paying a fixed-rate mortgage instead of a rent increase that will go up annually.

And with capital gains benefits you would pay no tax on the profits of up to $250K for a single person and $500k for a married couple. That means if you sold the home in 30 years for $1,000,000 it would all be tax exempt.

By putting down $17,500 for a $500,000 home that is saving you and giving back around $3,000 a month ($36,000 a year), it’s a return of over 200 percent a year on your home, which you live in and enjoy.

That is why a homeowner’s net worth is 36 times that of a renter and a big reason why around 95 percent of a person’s wealth comes from owning a home.

I specialize in helping renters and first-time buyers purchase a home, working with several lenders that have programs to get buyers qualified. I include my Home Rewards Program that gives you up to $5,000 towards your home purchase and a free local move.

Craig Martin / Realty ONE Group / 661-361-6843

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