Uncategorized February 24, 2021

1031 Exchange: Preserve Equity, Build for the Future

Using a 1031 Tax Exchange

 

By Patrick McCarran

Real Estate Broker

 

Leaving California or is it time to reinvest in a different property or state? Due to the recent upswing in homes values we have realized a significant growth in equity.  Many owners think that they may be stuck in their current investment property? Whether you bought it as an investment or it was an owner occupied that went past you 3 year deferment period you have options. Maybe you would prefer an investment in a different city, region or even another state? Possibly you would like to combine many properties into few or few into many? The answer is a 1031 Tax Exchanges otherwise known as a Starker Exchange. This process allows real estate owners to defer taxes on capital gains resulting from the sale of investment real estate, often a sizable sum since combined Federal and State taxes can run as high as 38 percent.

In general terms to roll their profit into another property and defer the tax and preserve equity and cash flow.

To accomplish this, sellers need to engage a Qualified 1031 Intermediary to document the sale as an exchange and to receive the funds from the sale. I cannot stress the importance of a THIRD party for the exchange. This does NOT mean a title or escrow company. By definition you cannot have any direct control over the funds, which is not just in your pocket but anywhere within your reach

Central to a 1031 Exchange is the interpretation of like-kind property. While the common assumption is that like-kind implies land for land or a condominium for a condominium swap, the definition of like kind has become far less literal.  Today it defines like kind as meaning that both the replacement and the original property must be used as an investment. So land, condominiums, single-family homes and motels can all be exchanged for one another as long as they are used in the exchanger’s business or held as an investment.

1031 Exchanges do have specific  IRS requirements and a set timeframe for performing. This is why it is very important that you contact an experience agent such as myself and engage the Intermediary BEFORE  you close and ideally before you place the property for sale.

There Are other options for example you can opt for a Reverse Exchange where you buy the replacement property first then sell the current property.  An Improvement Exchange, allows you to build investment properties from the ground up or improve existing properties.

If you want more information on 1031 Exchange or have any questions feel free to contact myself or a real estate professional you know. Make sure that he or she is familiar not only with the process but also with the specific documentation and time frame mandated by the IRS.

This article is intended to inform readers, but does not constitute any financial or legal advice.

Patrick McCarran is a local Realtor and Broker DRE# 01325072. He can be contacted  by phone or text at

(925) 899-5536, pmccarran@yahoo.com or www.CallPatrick.com. An independently owned and operated office.  In association with Realty One Group Elite DRE# 0193160.

Equal Housing Opportunity.

 

Uncategorized December 10, 2020

I Rent, Why Should I get Insurance?

 

By Patrick McCarran

Real Estate Broker

 

The share of Bay Area households that rent their homes has grown significantly over the last decade — by about 5 percent and now over a million people in the Bay Area alone are renters. Many of these people are renting to save a down payment, they don’t know how easy it is to buy or simply do not want the responsibility of ownership. It is a common misconception that the landlord or owner’s policy will cover the tenant’s possessions but that is false. This is what makes it imperative that you obtain a renter insurance policy. A basic renter’s insurance policy is usually just a few hundred dollars a YEAR.

 

Perhaps you are in bed sleeping soundly and a rusty pipe bursts, drenching everything in dirty water or you take your family to the movies complete with popcorn and soda, only to come back to find your home ransacked and empty. In the event of calamities such as these and more, the owner’s policy will only cover the owner’s property. If you are the tenant you may have lost everything including the roof over your head in an instant and have been burdened with the cost to replace it all.  The renter’s policy may be used to replace your belongings and often pay for temporary housing or loss of use.  Coverage is also provided for personal liability protection and medical payments to others.

 

But wait, there’s more! Did you turn away from the stove for just a brief moment or was it one misplaced candle? What if the bathtub or sink overflowed, would you be responsible? Don’t forget about other tenants or nearby homes and their insurance companies that are going to look at your assets, and your future earnings to recover their loss.

Can someone sue for damage caused by your negligence if there’s nothing to take? Yes. We live in California, where anyone can and often will sue anyone for anything and everything. You might not have anything to take today, but the person holding that judgment will sit on it, renew it as necessary, and then pounce when there’s finally something to collect. Is that the shadow you want to live under? California renter’s insurance liability coverage is designed to prevent that from happening.

This article is meant to get you thinking. I am not an insurance agent and this is not meant to be advice but rather a conversation starter. You won’t know until you get a quote so get peace of mind — and full protection. Call your insurance company today!

 

 

Patrick McCarran is a local Realtor and Broker DRE# 01325072. He can be contacted  by phone or text at

(925) 899-5536, pmccarran@yahoo.com or www.CallPatrick.com. An independently owned and operated office. In association with Realty One Group Elite DRE# 0193160.

Equal Housing Opportunity.

Uncategorized November 10, 2020

Selling Your Home in a Winter Wonderland

Selling Your Home in a Winter Wonderland

 

By Patrick McCarran

Real Estate Broker

 

One of the many byproducts of Covid-19 is the extension of the current strong market. Traditionally 30%-50 % of active buyers fall off as the winter and holiday season is upon us. However with the delay caused by the pandemic it has extended demand for homes, so as they say time to make hay while the sun is shining. If it is necessary to list your home in now then it may make sense to take advantage of the season and use festive decorations to set the tone. This is a time when you can showcase your house in a unique way to highlight areas that normally may not stand out.  By creating a festive atmosphere, a home seller allows perspective buyers to envision what their holidays will be like in the property—complete with a beautifully trimmed tree, the twinkling of lights and the smell of Christmas cookies in the air.

That being said I am not suggesting that you channel the infamous Clark Griswold  from  “National Lampoon’s Christmas Vacation,” As with all staging less is generally more. You do not want to overwhelm the buyer or distract from the homes features, merely highlight them.

Buyers often will associate a sense of ‘home’ through the traditions and memories of holidays past. Through tasteful decorations you can bring those memories out and it is a great way to attract buyers.

Nighttime is when many perspective buyers are driving around looking at houses, and nothing will slow them down more than a great Christmas light display. “A well designed display adds festive elegance to a home, and highlights the already present features of the property.” said Brandon Stephens, vice president of Marketing at The Decor Group, Inc., Lubbock, Texas, specializing in interior and exterior holiday decorating. This doesn’t have to be an over the top contest worthy event. A straight forward light display and a few lawn decorations such as Frosty coupled with large ornaments in the trees can turn almost any yard festive. Don’t forget to highlight the For Sale sign as well,  a few lights and maybe some well placed decorations.

Embrace the holidays by holding a twilight open house, when your agent can serve hot chocolate and Christmas cookies to show off the Christmas lights, holiday decorations and all that the house has to offer.

Here are some simple suggestions to ensure your home captures the holiday spirit without interfering in the real estate process:

  • Keep decorations to a minimum so you don’t block views, make rooms feel smaller and disrupt the natural flow of the home.
  • Consider a smaller tree and store most of the gifts in another room.
  • Incorporate fresh evergreen or rosemary into your decorating for a classic look and to promote “the Christmas tree smell.”
  • Make sure light strings and extension cords are tucked away for everyone’s safety.
  • Try to avoid overly religious or cultural decorations to keep it neutral so a greater number of buyers will see it as their potential home.
  • Leave a plate of holiday cookies and warm cider or cocoa for prospective buyers with a holiday note.

The holidays are emotional times for many people, including home shoppers. Holiday decorations presented tastefully and sensibly, can help you wrap a bow on your home for just the right buyer.

Patrick McCarran is a local Realtor and Broker DRE# 01325072. He can be contacted  by phone or text at

(925) 899-5536, pmccarran@yahoo.com or www.CallPatrick.com. An independently owned and operated office.  In association with Realty One Group Elite DRE# 0193160.

Equal Housing Opportunity.

 

Uncategorized October 27, 2020

Basics Facts of Living Trusts – How do I avoid probate?

Basics Facts of Living Trusts

How do I avoid probate?

 

By Patrick McCarran

Real Estate Broker

 

I have plenty of time? If you are young and healthy and in your 30’s or 40’s you never know what life has planned and a trust can give you peace of mind even though the need will be in the distant future. I believe in living trusts even for a modest estate, it’s the principal of paying the state to make a difficult period in your family lives more difficult and expensive.

 

The probate process in California isn’t exactly complicated, but it can be expensive. The fees for Probate are based on the gross value of the assets and are a tiered rate according to the value of the estate. Bear in mind that these are based on the gross value of your assets, so if you have a house worth $500,000 but there is a $480,000 loan on the property you would owe the state $13,000 for the probate tax leaving the heirs with $7000. In addition there are attorney fees, Executor fees, filling fees, and miscellaneous court fees!

 

The process for a probate is not quick and can easily take a year or more. If there are disputes, problems or a backed up court system, it can take much longer delaying closure for the family and draining money from the estate for expense such as a mortgage, other loans and credit cards.

 

Most of the deceased person’s property has to go through probate in an estate currently over $150,000, whether there is a will or not (intestate).  However, there are several instances where property and assets would avoid the process, such as assets that are held in joint tenancy or with a designated beneficiary.

 

You may be asking by now, “How do I avoid this?” I would not recommend transferring title to your heirs prior to death because this also will transfer the cost basis the profit of the item and create a tax burden for the heirs. A second option that helps avoid this is a deed on death which activates, on passing and can avoid the step up tax basis. The third option is a living trust, the cost basis is the value at time of death and therefore the heirs may have limited or no tax liability.

 

 

What is the process and how is a Living Trust a viable option to avoid probate? Real estate, bank accounts, and vehicles can be held in a living trust created through a trust document that names yourself as trustee and someone else – a “successor” trustee – who will take over as trustee after you die. A living trust’s terms can be changed at any time, or the trust may be cancelled entirely, hence is revocable.

 

A typical trust is the Family Trust and can be an individual or a couple who are the Trustees and, with their children or heirs, the Beneficiaries. Those who establish the trust and transfer their property into it are known as Trustors or Settlors. After the passing, the designated heirs become the primary beneficiaries. A successor trustee designated by the trust creator will execute the wishes of the Trustees via a will contained in the trust.  No contest clauses are placed in trusts as a caution to potential challengers.  Beneficiaries under the will or trust who challenge the document lose or forfeit their inheritance under the document, this discourages would-be challengers from contesting the document.

 

A Living Trust provides you with peace of mind now by setting a clear plan and knowing that your estate will be handled exactly as you wish later. It will also provide comfort to your loved ones during an already stressful time because you’ve laid everything out for them and eliminated stressful guesswork and government bureaucracy.

 

The purpose of this article is to help get you thinking and start a conversation with your family and appropriate legal counsel. I am not an estate planner nor an attorney.  This article is not meant as tax or legal advice.  The examples I have given are merely illustrative and should not be relied upon.  You should always consult with a tax consultant and/or lawyer for your specific circumstances.

 

 

Patrick McCarran is a local Realtor and Broker DRE# 01325072. He can be contacted by phone or text at (925) 899-5536, pmccarran@yahoo.com or www. CallPatrick.com. An independently owned and operated office.  In association with Realty One Group Elite DRE# 0193160. Equal Housing Opportunity

Uncategorized April 23, 2020

We are OPEN for Business!

 

 

By Patrick McCarran

Real Estate Broker

 

The good news is the Banks are still making loans, Realtors are still selling home and the Title companies are still managing the process. During this period of Corona virus and in a time of uncertainty I am here to support you. Real Estate has been deemed an essential business and although it may look a little different, many of my fellow realtors like myself are here to help with all of you real estate needs and answer any questions. I am happy to discuss the shutdown, the future of the economy and the housing market in general. If you want to make a plan to buy a home whether today or in the future, I am here for you. If you are looking to sell your home, I would be happy to provide counseling or list the property.

 

In this modern age I can accomplish this all through the wonders of technology. We can chat via any number of apps like Zoom or FaceTime. I can tour the home virtually. We can fill out most of the paperwork through email with programs such as Docusign and utilize phone and video consultations to review the contracts and disclosures. It really is based on your level of comfort and need.

 

Lenders, like real estate agents, offer essential services and are open for business. Some of the higher value loans are limited but there are still many first time buyer programs available. Depending on your choice, you can either meet under social distance protocols or conduct the entire loan process online and digitally.

 

Title and escrow professionals are still operating virtually as well, they can process the necessary paperwork and provide closing papers via email and courier. While we will still need a notary, this can be done with safe social distancing practices using sanitized pens and gloves to handle the paperwork.

 

Although the timeframes may take a little longer, I have a team of professionals to offer you the same full service that I always have, but in a slightly different way.  My photographer will take pictures and create a virtual tour. Home and termite inspections to help find any existing or potential issues, are best in person and conducted with safe practices. Contractors and a handyman for repairs and maintenance, as needed. Virtual staging to showcase your home, either through the app or digitally in the professional photos. Appraisals are still working as well within social distancing guidelines and practices.

 

Buyers can still buy. You may have concerns about looking in person and I have solutions. I can visit the home and perform a live tour with the buyer individually or make arrangements for the entire family on Zoom using the internet and my phone to send real-time video. This is the next best thing to being there and enables the buyer to ask question’s such as room sizes, direction, orientation, and focus in on any details or architectural features of the home. In this market most listings have interactive 3D virtual tours that will let you get a feel for the floor plan and of the house. If you want to see the home in person there are options for that as well with safe practices.

 

 

 

If you need to sell your home I am ready as well. I have a comprehensive marketing plan to get your home sold including holding virtual open houses across multiple platforms to maximize your homes exposure. As I covered earlier I can perform the initial consultation virtually or in person depending on your comfort level.  Once you are ready, I will have my stager set up a virtual tour to help you maximize your value.  I will send my photographer out and with the precautionary protocols in place, he can create the interactive 3D tour of the property to let people get the feel before they visit in person or possibly write an offer contingent on viewing the property in person. This is to thin out any buyers who aren’t serious or if the house does not fit their needs prior to physically visiting the property.

 

Just to be clear, my process depends on your level of comfort and choice. If you would like to meet under social distance protocols, I am there. I have my mask, my hand sanitizer, and booties if you need them. However if you are not comfortable meeting in person, then I have a system in place to offer you the same great service without ever meeting face to face, the options are  yours to choose.

 

 I believe very strongly, that this will pass. I believe in our Country and the resilience of the people. We will overcome this set back and we will be stronger for the experience.

 

Patrick McCarran is a local Realtor and Broker DRE# 01325072. He can be contacted by phone or text at (925) 899-5536, pmccarran@yahoo.com or www.CallPatrick.com. An independently owned and operated office.  In association with Realty One Group Elite DRE# 0193160. Equal Housing Opportunity.

Uncategorized March 31, 2020

Shelter in Place Now What?!

By Patrick McCarran

Real Estate Broker

 

So we are all under shelter in place, what now? First thing is that I believe very strongly, that this will pass. We caught it early and The American Entrepreneurial spirit will prevail and we will adapt and overcome. Meanwhile, it pays to visit the CDC’s resource center and get some basic tips and procedures (https://www.cdc.gov/coronavirus/2019-ncov/prepare/prevention.html ).

Regarding the Real Estate market, it is largely on hold. Buyers are not really interested in looking and sellers are not wild about have people in their home. I predict that once we find a treatment or a vaccine the market will pick up rapidly. This makes now a good time to buy due to less competition. There are many options that can be employed to view the home remotely such as a comprehensive video tour and interactive floor plans. Another option is to do a realtime video such as ZOOM, Instagram live, or facetime video. While I am not advocating to show your home, if it’s essential due to personal circumstances, then it is important to follow CDC guidelines such as keeping at least a 6 feet space from others, wash and sanitize your hands, and use single use products for sneezes and coughs. If you are sick, even if it’s not COVID-19, stay home and self-isolate. Clean surfaces regularly with sanitizer solution, formulas are available on the CDC website using household bleach or alcohol.

Meanwhile, use this time to catch up on some to do items. If you are planning to sell after the crisis, then use the time to start staging and prepping your home for the market. If you’re a buyer, get organized and start packing non-essential items.

The primary tip is to give everything a place. As my dad used to say  “A place for everything and everything in its place.” A simple thought and saying, but if you think about it, that is the very key to being and staying organized.

This applies to everything big and small — from remote controls, keys and phone chargers to paperwork, sports equipment and Christmas decorations. First designate an area and then invest in storage containers or use cardboard boxes to keep it all contained and organized.

If it seems like a daunting task, then assign each room or section of a room a day of the week and schedule 10-15 minutes at a time. Break the task down into increments. Viewing it as small bites will make it manageable.  Stay on top of it! Do a clutter check at the end of the day to catch and organize anything that’s fallen out of place.

Create a catch-all area in the main rooms where things tend to collect.  Place a bin in these rooms and collect Items that belong elsewhere, and at the end of the day or week, put things away. If you find that the items in the bin are mostly toys and games, put your children in charge to put them away.

Paperwork is a huge culprit. Think about signing up for paperless billing for your monthly bills, credit cards, utilities, etc. When done you can store them in a folder on your computer and in the cloud, out of sight but just a search word away. You should also keep a hard folder (mine is purple so I can grab it easily in an emergency) or invest in a safety deposit box for pink slips, birth certificates, title reconveyance, and other important hard documents.

The key is of course is to stay vigilant and you can live clutter free. But if you find you need a larger house give me a call.

Patrick McCarran is a local Realtor and Broker DRE# 01325072. He can be contacted by phone or text at (925) 899-5536, pmccarran@yahoo.com or www.CallPatrick.com. An independently owned and operated office.  In association with Realty One Group Elite DRE# 0193160. Equal Housing Opportunity.

Uncategorized January 25, 2019

How is Your Credit?

By Patrick McCarran

Real Estate Broker

In todays world now more than ever a good credit score can make a real difference in your future and directly effect your wallet. Although no one except the credit reporting agency’s know exactly how the algorithm works I am listing ten general tips that are commonly acknowledged to help increase your credit score

  1. Always pay on time

This sounds like a no brainer but it isn’t. No lender likes to lend money to an individual who has a track record of missing their payments. This indicates a lack of discipline and poor financial management, and it translates to a lower score. On-time payments improve your credit score tremendously. It carries almost a 40 percent weight on your score. If you find it hard to keep track or forget to mail the payments try and epay option at your bank. Set up the minimum payment to go out preferably just before the due date and choose the recurring option so it pays every month. Just remember to check your statements in case the minimum payment changes. Because you are setting this up at your bank you can change it or cancel anytime with the click of a mouse.

  1. Keep your credit owed within limits

Keep your credit card balances within 40%  of the allowed limit. If you have $5,000 as your limit, then keep your balance amount to $2,000. This applies even if you pay it off each month. The total balance at any time must stay under 40% to show that you are not pushing your limits, it is like the old saying they only give you money if you don’t need it. Also it is good practice not to have your total unsecured credit balance over 50 percent of your annual salary.

  1. Use two credit cards if you are a definite credit card spender

This is good and bad advice at the same time. FICO does not consider spending money on two credit cards as one. But if you have two credit cards, you can keep your usage percentage in control.

For example, if you have a credit card with a limit of $2,000, and you charge $1,500 on it, you’ve used 75 percent of your credit limit.

Now if you split your amount into two, and spend $750 each, then the percentage of usage will be around 37 percent. So it helps you in the eyes of FICO. Now, don’t go on a credit card shopping spree.

  1. Maintain a good mix of good and bad loans — AKA, a healthy credit mix

Home loans and business loans are considered good loans. Personal loans and private label credit cards are considered bad loans. This is why investing in a home loan if you are a spendthrift is a better decision. You will have a good credit mix and be building an asset.

  1. Pay high-interest loans and small loans first

It is a prudent decision to pay your home loans over longer periods. Pay off your personal loans, credit cards and private loans first, as they tend to have a higher interest (typically 15 percent to 36 percent) with no asset creation. Home loans, on the other hand, are just 4 percent to 5 percent, but they build an asset. This is one of the underutilized logical tips to improve credit score. Pick a loan and set a goal and then focus on paying that one off ( but don’t buy something to celebrate).

  1. Close your unwanted savings accounts

Many people tend to abandon their savings accounts without closing them. If you have less than your Minimum Average Balance (MAB), it will start to affect your credit score. Also, when you finish a loan, it’s imperative to get the loan closure certificate.

  1. Check your credit reports regularly

Credit reports can be accessed for free. You can obtain them from the official FICO site. Just go online and check your credit score at least once in a year, so that you can seek clarification on any mistake and have it sorted. There have been cases when banks report you to FICO by mistake. Keep in mind that free reports are a consumer product and the credit score will vary depending on the type of credit you are applying for.

  1. Monitor your co-signed joint accounts properly

In instances of co-signing a loan or maintaining a joint credit account, be careful when dealing with someone outside your close family. You need to monitor the statements closely to make sure everything is in order. There is no use complaining if you chose the wrong joint holder who was careless.

  1. Negotiate if you cannot pay on time

This is also one of best tips to improve credit score. People often know that they would not be able to pay their bills in advance. Regardless, they do not take any action.

If you know you will not be able to pay on time, negotiate with your bank. Banks will be willing to extend your loan period and reduce the EMI if they see a genuine customer.

It might hurt, but you will make a good impression, and the FICO will see you are proactive.

So these are some of the tips to keep your credit score in check and get a home loan easily. Feel free to contact me with any other questions or for more information.

 

Patrick McCarran is a local Realtor and Broker DRE# 01325072. He can be contact by phone or text at (925) 899-5536, pmccarran@yahoo.com or www.CallPatrick.com. An independently owned and operated office.  In association with Realty One Group Elite DRE# 0193160. Equal Housing Opportunity.

 

Uncategorized January 25, 2019

The American Dream is Still Alive & Well!

By Patrick McCarran

Real Estate Broker

 

Is the American Dream a thing of the past? Is there still a value to owning a home? My answer is absolutely buy a home and not because I sell them actually I am in real estate because of my belief in the value of owning real estate. America is one of a handful of countries where ANYBODY can own property. There has been a great deal of reports of the sky falling with the change in the tax code effecting the  deduction of interest and caps on local and state taxes, what most alarmists aren’t telling you is that only a small percentage of loans in the USA are over $750,000 and even with the increase in the personal deductions the PRIMARY reason to own a home is UNCHANGED.

 

The WHY you should own is relatively easy. It seems like every day there are news reports of someone displaced by high rents or the building is sold to a new owner and they are forced to move. Rents are at a high and with the strong resistance to building they will continue to rise and be unpredictable, when you own you know what the payments will be and it your home not the landlord to dictate rules. Mortgage interest will most likely remain the largest deduction for the middle class. Mortgage interest rates remain historically low and there is affair amount of inventory from which to choose. Long-term homeownership continues to be one of the best ways for the typical American to build wealth.

 

So what’s holding you back? Down Payment? Many people are intimidated by the widely publicized 20-percent down-payment requirement. They don’t realize that there are many federal programs and other methods designed to help homebuyers, and even those who have lost their homes to foreclosure.

For example, Freddie Mac and Fannie Mae have loans available to first-time buyers with as little as 3-percent down payment and the FHA has similar programs that require 3.5 percent down and payment. If you qualify there are a number of programs and grants that can help with the down payment. With a seller credit for closing costs I have gotten buyers into a home for as little as $1500 out of pocket. For veterans, the VA program has no-down-payment loans available for qualifying military members and veterans that can close with almost no out of pocket money.

 

Why wait? What’s the worst that could happen if you buy a home now? You’ve already seen it, the 2007 mortgage crisis. It will take generations, if ever, before the government lets the banking systems get that far out of hand again. It is far more likely that home prices will steadily climb as they have been. Americans are getting back to work and leading the global economy out of stagnation. So don’t be blinded to the future by your past experiences. The American population will continue to grow and build families of all types, creating more demand for housing. Don’t view your home as a trading vehicle or a one-way-up investment. Instead, look at the home-ownership benefits that are mostly forgotten by today’s potential homebuyers — the chance to build equity (instead of throwing rent down the drain) and the opportunity to customize your own environment.

 

That’s what has always motivated Americans to own their own home. And it isn’t going to change in the long run. Grab the American Dream now.  Start building wealth and stability. Call a REALTOR or a Loan officer you have nothing to loose and everything to gain.

 

 

Patrick McCarran is a local Realtor and Broker He can be contact by phone or text at (925) 899-5536, DRE#01325072 pmccarran@yahoo.com or www.CallPatrick.com. An independently owned and operated office. Equal Housing Opportunity.

Uncategorized September 28, 2017

Buying a Newly Built Home? Use A Realtor!

By Patrick McCarran

Real Estate Broker

With new home construction going strong again you may not think it is necessary to involve a real estate professional in a transaction where a buyer can deal directly with a builder. Think again! The builder’s agent is representing the builder’s best interest. As your buyer’s agent a Realtor can guide you along the right path, smooth the rough places and help ensure you make a decision you can live with (and in) for many years. As your agent, the Realtor is representing your best interests. Just as a real estate professional calls on experience and knowledge of an area to help buyers locate re-sale homes in a community, the same applies to guiding buyers interested in newly built homes to developments and communities that match their wants and needs. Your agent can suggest builders based on their reputation for delivering a high-quality product, responding quickly to issues, and being financially sound. Your agent may be familiar with how a builder prices his products and where there may be room to negotiate price or upgrades.

Your agent can assist you as you face hundreds of design choices and consider which upgrades provide the best value in terms of resale and whether to upgrade from an outside vendor. The upgrades or options available will vary from builder to builder and the choices you make will depend on largely person decisions. Often a buyer can pay far less after the home is built by contracting with a third party but price is not always the only consideration you need to consider the convenience, cosmetic ramifications and if it is even feasible to perform after the home is built.

 

The lender approval process may go smoother if your agent schedules visits, accompanies you to lenders, and helps expedite required documents.

When relocating to a new area, your agent can be particularly valuable resources. In addition to providing local area information regarding schools, day care or elder care services, public transportation, proposed development, and so on, once construction is under way, an agent can periodically stop by the work site, supply you with progress reports, and photograph phases of the construction.

 

REMEMBER the builder will require your agent to accompany you on your first visit to the site. So let them shop with you it is not an inconvenience it is there job.

By now, you should be convinced of a real estate professional’s value as you search for and purchase a newly built home. Still, here’s one more great reason to work with an agent—the builder pays the agent’s commission. You enjoy individual attention and support at NO cost to you. What a great way to start life in a new home!

Know Your Options

 

Patrick McCarran is a local Realtor and Broker DRE# 01325072. He can be contact by phone or text at (925) 899-5536, pmccarran@yahoo.com or www.CallPatrick.com. An independently owned and operated office.  In association with Realty One Group Elite DRE# 0193160. Equal Housing Opportunity.

Uncategorized September 28, 2017

Is a Home Warranty a Good Deal?

By Patrick McCarran

Real Estate Broker

 

I am often asked if a home warranty is a good deal or worth the money.  I highly recommend them. Considering that the average water heater runs about $1300, and a new furnace and A/C can run over $10,000 with the new SEER laws, a home warranty can save you thousands of dollars on a repair that pops up after you purchase a home.

I think it is important to understand that a home warranty is not an end all be all warranty and you should be aware of exactly what the home warranty covers. It does not cover everything that may go wrong but does cover a great many items. The warranty brochure will spell out exactly what is covered and what is NOT covered. It has been my experience that the major warranty providers do not try to “wiggle out” of paying, if it is covered and not obviously a preexisting condition then they will repair of replace. In general the warranty will cover items not covered by your home owners insurance. For example if a pipe leaks the home owners policy will cover the damage caused by the leak but not repair the pipe, the home warranty will cover the pipe but not the damage.

Be aware that if the warranty is generally only for basic coverage, if you need extended coverage, such as for pool equipment, air conditioning, or even the refrigerator, you may be able to negotiate that extra cost with the seller, or consider paying the difference yourself.  It is important to note that you must file a claim with the warranty company and use their service provider, if you have a problem you can request a new vendor but you cannot generally call your own contractor and expect the warranty to pay them.  Remember that although most home warranties provide coverage only for one year, but you can always for more upfront or most plans are renewable after the first year, one of my clients kept their home warranty for the 22 years they owned the home.

Take note of what the deductible or per visit cost for repairs?  What’s the maximum dollar amount for repairs and what are the policy limitations such as new fittings or SEER inspections or permits?  Also the warranty company will buy out the claim, sometimes this may work out better for the home owner.

A warranty is not a blanket protection form defects and no buyer should forgo a home inspection. An inspection may uncover defects or potential problems that may not be covered by the warranty—and may give you the opportunity to request the seller to make any major repairs before the closing.

But, warranties definitely have a place when it comes to protection and peace of mind. For sellers they can act as “insurance” that you won’t get an angry call about the bad water heater in the house you sold and for buyers you don’t have to worry about dealing with the added expense of replacing a  major system or appliance after you move in.

Give me a call or email for more information or any questions on home warranties and providers. Know your options.

Patrick McCarran is a local Realtor and Broker DRE# 01325072. He can be contact by phone or text at (925) 899-5536, pmccarran@yahoo.com or www.CallPatrick.com. An independently owned and operated office.  In association with Realty One Group Elite DRE# 0193160. Equal Housing Opportunity.