Pasadena CA Real Estate

I was reading a post earlier today by Jennifer Allan about the definition of a good real estate agent. Jennifer is an author of five books about the business of selling real estate. She is a real estate coach and contributes regular articles on real estate related subjects to many different on-line venues.

I run into many different real estate agents on a daily basis. Some Pasadena real estate agents have tons of experience and others are just starting out. The prevalant change in the Pasadena real estate community is the change from being egocentric to customer focused.

To this day, many real estate agents flaunt their “multi-million” dollar status, being a top producer, being in the top % of their real estate company, etc. Not too many Pasadena real estate agents talk about how they can help their real estate consumer, what a real estate agent does for his or her customer to ensure that they’re delighted with their service, etc.

Receiving and reviewing real estate purchase offer contracts, it is clear that the training for the majority of real estate professionals is not stellar. If you are or were a real estate seller, all you have to do is look at the real estate purchase counter offer to see how many items a great real estate agent would need to address or “clean up” prior to acceptance – and I’m not talking strictly about the price.

So… forgive me for going on about this, but it’s a sensitive subject that is near and dear to my heart. One Pasadena real estate agent can create an impression on countless potential real estate consumers. As they say, perception is reality!

[youtube]http://www.youtube.com/watch?v=HANTJ1JlNbc[/youtube]

Here’s a list that Jennifer put together when she was asked about “what makes a good real estate agent”.

A Pasadena Real Estate Agent should:

“You know your market, your systems and your contracts.

You are a good negotiator.

You put your clients’ needs above your need for a paycheck.

You know how to properly price a home.

You know what your seller needs to do to get his home ready for market.

You know how to build rapport with your seller so that he trusts you.

You know how to take decent photos.

You know how to write an appealing MLS description.

You return phone calls promptly.

You preview listings so you don’t waste your buyer’s time.

You know how much it costs to replace a 50 year old furnace.

You have a handyman, a cleaning service and a good HVAC contractor.

You’re pleasant to other agents so they’re happy to show your listings or accept your offers.

You keep your brochure boxes full.

Your lockboxes work…”

My additions to her list:

A great real estate agent writes clean contracts.

A great real estate agent strategizes with their client on how to make their offer stand out – price AND terms.

A great real estate agent takes educational classes and strives to continually learn as the industry is changing.

A great real estate agent networks with other real estate agents locally and throughout the country to share best practices.

A great real estate agent should respond to emails immediately.

A great real estate agent should know how to market a home they’re selling on the web

A great real estate agent should be in touch with the changing real estate marketing techniques… Old school is good, but not enough… need to incorporate new and exciting techniques in helping buyers and sellers with their real estate needs.

A great real estate agent creates dynamic on-line presentations to market homes.

A great real estate agent is not afraid to say “I don’t know”, but I will research and get back to you.

A great real estate agent is honest and ethical!

There’s a lot more that I can add to this, but you get my point, right?

Old school where it’s all about me is OUT! New school – all about the real estate consumer is in.

Is your Pasadena real estate agent, a great real estate agent?

Federal Tax Withholding Rules (IRS Form W-4)

The vast majority of U.S. taxpayers allow the U.S. government to withhold more from their paychecks than is necessary to cover their tax bill due in April the following year. This is largely due to not understanding the tax withholding rules, so the proper number of withholding allowances can be claimed and thus avoid over-withholding.

Each year the IRS has to send some 80 million tax payers refunds totaling $120 billion dollars in excess withholding. This averages some $1,500 per taxpayer. This excess withholding money earns no interest and therefore costs these taxpayers some $6 billion in interest each year!

Many potential Pasadena homebuyers are prevented from buying homes each year because they cannot come up with an extra $100 to $500 per month above their present rental payments. There are also a number of homeowners who would like to move up to more expensive homes, that could use some additional monthly take home pay.

In both of these situations, it may be important to know the tax withholding rules, as these individuals may be able to increase the number of withholding allowances they claim on their W-4 tax withholding certificate. (See sample W-4 that follows.).

Contrary to popular belief the number of withholding allowances any individual may claim at their place of work is not their family size (nor 14 as many people believe). They are allowed to claim up to a maximum of 99 withholding allowances, as long as they have the tax deductions to back up the claim.

An individual on W-4 withholding can claim an allowance for himself, one for each dependent and one more for each $3,000 of tax deductions, over the standard tax deduction barrier. These tax deductions may include interest payments on mortgages for first and second homes, real estate taxes, moving expenses (if itemizing), charitable contributions (if itemizing), alimony, medical bills (above the deductible amount), some individual retirement accounts, some child care expenses and some stock or business losses.

READ MORE: Federal Tax Breaks to Owning Real Estate

If you need additional monthly income to be able to purchase a home, I recommend that you arrange an appointment with an accountant or CPA who can advise you of the proper number of withholding allowances to claim.

However, the following general rules may be helpful in illustrating that you may claim extra withholding allowances for the purchase of a home. This, in turn, would give you more monthly take home pay in order to be able to budget the home.

GENERAL WITHHOLDING RULES:

• One additional withholding allowance may be claimed for every $3,000 of itemized tax deductions, once the taxpayer has enough tax write-offs to itemize. This amount is in addition to withholding allowances for family size. ($5,450 is the minimum amount of deductions for a single taxpayer to itemize and $10,900 is the minimum amount for married couples to itemize).

• Individuals may claim as many tax withholding allowances as they desire, up to a maximum of 99, as long as their actual tax deductions support the claim. IRS tax rules state that you must pay 90% of your tax bill in advance each year, or you may incur tax penalties in the form of interest charges on the unpaid advance taxes.

• Each additional withholding allowance claimed by the individual on the W-4 withholding certificate, will result in less money being withheld from that individual’s paycheck by the employer. The actual amount of additional take home pay will depend on the individual’s tax bracket. If the tax bracket were 28%, each additional withholding allowance claimed would shelter $3,000 of income. Therefore, 28% x $3,000 = a tax savings of $840 per year or $70 per month, for each extra allowance claimed. Three such additional allowances would generate close to $210 per month in extra take home pay!

• The employer does not have the right to tell the employee how many tax withholding allowances to claim. This is up to the individual. However, many large companies provide someone to help the individual estimate how many tax allowances to claim.

• The purchase of a home usually entitles an individual to claim extra withholding allowances on his W-4 and therefore, receive more monthly take home pay. The exception would be when the home purchase and the resulting deductions are not large enough to itemize.

Information courtesy of Jeff Elias.

Every time I meet with a potential Pasadena home buyer, a question comes up about tax benefits of home ownership. In this post, I’ll cover some of the tax incentives that are currently available. These tax incentives are a nice little bonus that is allowed by the IRS to add on to the satisfaction and enjoyment of being a homeowner.

INTEREST DEDUCTIBLE:

Interest paid on the primary residence and a second or vacation home is deductible from one’s income tax. Since the vast majority of the early years’ mortgage payment is interest, this can be a substantial deduction, saving the homeowner thousands of dollars in Federal and State income taxes. This is often the largest single itemized deduction the taxpayer has.

TAXES DEDUCTIBLE:

Real estate property taxes are deductible on the primary residence and a second or vacation home. That portion of the homeowner’s monthly mortgage payment which goes toward the payment of real estate taxes may be deducted from federal income taxes. In the early years of a mortgage, as much as 95% of the payment goes toward interest and taxes, making as much as 95% of the total house payment tax deductible.

READ MORE: Decline in Value Reassessments

READ MORE: Property Tax increases on Your Pasadena Home

INCREASE IN TAKE HOME PAY:

IRS codes allow individuals who already exceed the minimum standard tax deduction barriers to claim additional tax withholding allowances or exemptions when they purchase homes of greater value or second/vacation homes. This increase in W-4 exemptions allows the homeowner to receive $30-600 per month in additional take home pay from their employer. It may assist them in budgeting a home of greater value or a second home. This monthly increase in take home pay is in lieu of a large lump sum income tax refund. This little known tax law may also be used by first time purchasers, if they purchase a home which will allow them to itemize substantially more than the minimum standard deduction amount.

MOVING EXPENSES:

Moving expenses may be tax deductible if you are moving more than 50 miles from your present location. The actual moving expenses plus cost of the trips for job hunting and some other expenses associated with moving may be deductible.

HOME OFFICE USE:

Part or full time use of an office in your home may be tax deductible. Under IRS rules, a prorated portion of the housing expense, operating expenses and depreciation may be deducted from income taxes if you use a portion of your home as an office, and you meet certain guidelines.

CAPITAL GAINS EXCLUSIONS:

A homeowner may sell his principal residence and exclude up to $250,000 of profits under a capital gains exclusion. A married couple may exclude up to $500,000 in profits, each time they meet the eligibility requirements, but not more than every two years. To be eligible for this capital gain exclusion, the homeowner must have owned and occupied the home as a primary residence for at least two of the five years prior to the sale.

REAL ESTATE INVESTORS:

Active real estate investors who actively participate in the management of rental properties can deduct up to $25,000 per year for deprecation, negative cash flows, interest, taxes, maintenance, repairs and miscellaneous costs, as long as their adjusted gross incomes do not exceed $100,000. $1,000 of the $25,000 deduction is eliminated for every $2,000 over the $100,000 adjusted gross income, until the AGI reaches $150,000.

No deductions are available for the 3-5% of taxpayers whose adjusted gross income exceeds $150,000. – However, the $25,000 tax deduction is a huge deduction and would be over and above the deductions for one’s primary residence and second home. This $25,000 tax deduction could conceivably reduce a gross income of $50,000 to a taxable income of only $25,000, resulting in a substantial tax savings. The tax savings would even be greater in states having state income taxes, as state income taxes are usually based on Federal income taxes, which would be lowered.

Information courtesy of Jeff Elias.

I love helping home buyers and home sellers around Pasadena with their real estate needs. My passion, though, is helping sellers market and sell their homes for the highest possible price and in the quickest possible time.

An unfortunate real estate trend for me personally in this real estate market is that I have been walking away from listings. It seems like there are a lot of unreasonable sellers in the Pasadena market place recently.

I had 3 listing appointments over the last two weeks and decided NOT to work with any of these home sellers.

Here are the top 7 reasons for me NOT to list your home:

1. Unreasonable sales price: It seems that there are a lot of uneducated or oblivious home sellers in Pasadena. Let me say this – NO REALTOR EVER SETS THE PRICE FOR A HOME! A final sales price is a function of the real estate market. It’s what a home buyer is willing to pay and a home seller willing to accept. There are clear real estate market statistics and indicators that drive the suggested price of a Pasadena home. I do not make them up. I can not change them at will. Multiple Listing Service and companies like Altos Research can provide comprehensive market statistics. OVERPRICING a home will only ensure that your home will sell for much less than what it is worth. I refuse to take a home listing that is overpriced and offer home sellers false hope. There are enough real estate agents out there that are willing to do that.
   • READ MORE: Pasadena Real Estate Market Report
2. Sellers refusal to Stage their home: Homes that are not staged properly will not sell for the highest possible price AND they will sit on the market, and sit on the market, and sit on the market. Did I make my point yet? I do not want to waste my time or the seller’s if they are unwilling to stage their home.
   • SEE MORE: Staging! It Works!
3. Sellers that refuse to clean their homes and keep them clean during the listing agreement. That’s pretty self explanatory. Some people are willing to spend more time on getting their car ready for sale than their house.
   • READ More: How to Sell Your Pasadena Home in 30 days or Less
4. Sellers that refuse to give access to showing their house. So… what you’re saying is that you want to sell, but show it only when it pleases you? Selling a home is quite frankly inconvenient. If you live in the house that you are selling, it’s even more difficult. You lose a lot of your privacy. But, to sell the home successfully, easy access is needed to the house.
   • READ MORE: Make a Great First Impression
5. Sellers insisting on paper advertising. Most buyers now come from the internet. I spend a lot of time and money optimizing my seller’s home listings so that these homes are found quickly and by many potential buyers. I refuse to placify sellers who just want to see their home photo in LA Times or Pasadena Star News. Did you know that LA Times is no longer publishing a Real Estate section? Why? Because it doesn’t work! When you hire me to sell your job, trust me to do just that. I am fully incentivized to sell it quickly and the highest possible price. After all, I do not get paid, until you do!
6. Sellers insisting on continuous Open Houses. Open Houses do not work effectively. Some Open Houses, especially at the beginning of a home listing period are absolutely necessary. For example, broker’s open house, twilight neighborhood open house. Consistent open houses are only good for realtors. They are ways to find buyers – not for your home mind you, but for other available homes. Open Houses can lead to theft as in the recent number of San Marino home thefts during Open Houses. Again, Mr. & Mrs. Seller, please trust me to do my job and protect you and your investment.
   • READ MORE: Open Houses are NOT All the Same
7. Sellers that argue with me over commission and contract period of the listing. Now… I can write, and probably will shortly, an article on commissions. Let me suffice it to say that you as a seller have options. You can choose to sell your Pasadena home yourself. You can sell it with a discount broker. Or, you can sell your home with me and get more in your bottom line. My home listings consistently sell for 3.1% more than the Pasadena Foothill Board average and sell 12% faster than the average*. I leverage the latest technology and social media marketing to ensure that your home sells quickly and for the most money. And, you can cancel your contract with me at any time with 24 hours notice. I take the risks, not you Mr. Home Seller.

So if you are a serious and motivated home seller in or around Pasadena, please call me. I’d love to work with you. If not, please call another agent or just try selling your home yourself.

* Statistics based on 2004 and 2005 data

What sells Pasadena Homes?

1. Location, Location, Location!
2. Correct Pricing!
3. Condition and Staging!
4. Sales Words Used in the Multiple Listing Service!

Huh?  Words sell homes?  That’s something new…

Well, experienced and successful Pasadena Real Estate agents have known this for quite awhile.  Now, there’s an article in The Seattle Times by Ann Brenoff that discusses just that.

Words matter. Wars have started over words. Civilizations have collapsed because of them. And, it appears the speed with which a house sells can be determined by them. Ann Brenoff

So, how can home sellers use words to give them the edge in selling their Pasadena house? 

A study done by a Canadian professor, Paul Anglin, after analyzing more than 20,000 home listings, found that sales words not only affect the speed of home sales, but also the PRICE of a home sale.

Certain words can make your home sell faster and for more money.  So roll up your sleeves and let’s look at this together.

Words that help sell your Pasadena home faster and for more money are:

Handyman special

Beautiful (these homes moved 15 percent faster and for 5 percent more in price than the benchmark)

Curb appeal

Move-in condition (home listings took 12% less time to sell)

Landscaping (homes sold 20% sometimes)

Granite

Gourmet

Golf

Words that hurt:

Motivated seller (homes sold for 8% less in the study! In another study by Ronald Rutherford of University of Texas, afinance and real-estate professor, homes that listed “Motivated Sellers” in their description stayed on the market for 15 longer and sold for 4% less!)

Moving (homes sold for 1% less in the study)

Good value

As-is

Clean

Quiet

New paint

 Los Angeles Times

Another word: “MUST SEE” was not received well by home buyers and did not do anything statistically to improve the number of days a home was on the market before selling.

If you are selling your Pasadena home, review your Multiple Listing Service (MLS) description to see how your home is advertised and feel free to share this with your Pasadena Real Estate agent.

If you are selling your home by owner (FSBO), review all your marketing – MLS, flyers, etc and incorporate the words that sell.

If you are considering selling your home in and around Pasadena, work with a respected and knowledgeable real estate agent who can ensure that you get the highest $ for your home.