Los Angeles and South Bay Real Estate Video Blog with Lenny LaRocca

Home warranties are a very useful tool. They can be used by buyers and sellers to save on a lot of maintenance costs. Looking to buy a Los Angeles home? Search all homes for sale  Selling your Los Angeles home? Get a FREE home value report I’m here today to talk about home warranties and everything you need to know about them, whether you are a buyer or a seller. A home warranty is an insurance policy that covers the cost of repairing or replacing almost any system in your home. They typically cost between $300 and $900 depending on the home, but it can save you much, much more than that in the long run. The great thing about a home warranty is that if something breaks, you don’t have to go through the hassle of finding a repairman or interviewing multiple repairmen for the job. What you can do instead is contact the warranty company, and they will send somebody out. You will have to pay a $50 to $75 service charge per visit, but all of the other parts and maintenance work is covered by the warranty. Your warranty could pay for itself on your first claim. It’s common for sellers to include a one-year warranty. Home warranties can be used by any buyer or any homeowner, regardless of how long they have lived in a home. Warranties are especially advantageous for first-time home buyers, most of whom are on a strict budget. It’s very common for sellers to offer a one-year home warranty to buyers for their home. It’s fairly standard. These are fantastic investments. A great insurance policy for the seller and the buyer, and a wise move if you’re thinking about moving yourself. If you have any questions for me about home warranties or anything else relating to real estate, give me a call or send me an email. I look forward to hearing from you.

When you start the process of buying a home and enter escrow, it's important to be aware of the preliminary title report and its contents. Here's why. Looking to buy a Los Angeles home? Search all homes for sale  Selling your Los Angeles home? Get a FREE home value report When you buy a home and you're in the escrow process, the preliminary title report has three key aspects to it. Dozens of records come into the play about the home you're thinking of buying, and it all has to be disclosed to you as the buyer. The title report is one is one the most important reports in this process because it documents the ownership of the home as well as any liens, easements, or encroachments against the property. A title company compiles all this information and puts into a report that goes to you and your agent. The information in this report is critically important, and you should be aware of the three most important aspects: The status of the property: Property taxes always show up on the preliminary title report and show how much is owed and how much has been paid. As a buyer in escrow, the important part is making sure any property taxes have been paid before closing escrow; it's actually a condition of closing escrow. If by chance the seller hasn't paid property tax, it will be paid out of the proceeds they'd receive from the sale. Property tax is a top lien item on any preliminary title report. The legal description: You won't see this is any of the agent's marketing information. It's a written description of the property's location and boundaries relative to nearby streets and intersections. Mortgage liens: These are generally listed right below property taxes and are listed in order. If a home has two loans on it, the mortgagor in the first position would be noted first and the mortgagor in the second position would be noted second. In all property transfers in escrow between a buyer and seller, the mortgage liens must be paid off prior to the title transfer. When the sales close, the liens must be paid off in the order that they appear on the title report. The seller is left with the net proceeds based on that. Understanding the preliminary title report is a crucial aspect of buying a home. Now, this list isn't all-inclusive and there are a variety of other items that could show up on a title report. That why it's so important to understand what's included in that preliminary title report when you're in escrow as a homebuyer. You also want to be clear on what title insurance protects you from. If you have any questions about this step in the home buying process or you're thinking of selling property in the area, give us a call or send us an email soon. We're here to help.

Today I want to share 10 tips that you can use as a new homebuyer to ensure a successful purchase and a smooth transition. Looking to buy a Los Angeles home? Search all homes for sale  Selling your Los Angeles home? Get a FREE home value report If you’re a first-time homebuyer, here are 10 tips you should focus on to make your transaction smooth and successful: 1. Find a good agent. A good, seasoned agent can carry your interests and negotiate the best deal for you. 2. Location. As the old saying goes, “Location, location, location.” When buying a home, consider location as your No. 1 criteria, especially if you have young children and need to find a good school for them. 3. Use the Internet for all the informational value it has, especially if you’re looking at properties online and searching open house schedules. You can get this information from your agent, but using the Internet is a good way to identify properties you want to see when you have time to see them. 4. Buy a home, not a project. You don’t want to buy a home that needs a lot of work. I have a lot of buyers who seek out fixer-upper homes for the equity gain, which is fine, but you should only attempt this if you have the aptitude, wherewithal, and the capability to do so. Location is critical when choosing a home to purchase. 5. If you can, be a cash buyer. If you can’t be a cash buyer, get pre-approved before you enter the market. We require all of our buyers to be pre-approved with a credible lender before they come on the market. 6. Get a home warranty policy. Always have a home warranty policy on your home, especially if you’re a first-time homebuyer and you’re busy trying to make your monthly mortgage payments. 7. Make inspection times count. When you’re under contract and in escrow, make sure you and your team do your due diligence to inspect the home you’re buying. Look at the five primary functions of the home: plumbing, electrical, roof, structural, and everything else that’s important. 8. Put safety first. Like I said, location is important, and you want to take a look around the area you’re buying your home in. We always suggest to our buyers that they do a community drive three separate times of the day—early in the morning, midday, and in the evening. 9. Make common repairs as much as you can while in escrow. After the home inspection, certain fixes will probably be needed within the property. Many times, those fixes can be negotiated between you and the seller. Try to finish as many repairs as you can before moving in though so it’s less hassle for you and your family once you’re settled in. 10. Add some finishing touches after moving in. This will add both equity value and market value to your new home. If you have any questions or are looking to buy or sell a home in our market, don’t hesitate to reach out to me. I’d be happy to help.

Many buyers think they can get away with overpricing in this market. It’s not a wise move, for a few reasons. Looking to buy a Los Angeles home? Search all homes for sale  Selling your Los Angeles home? Get a FREE home value report Is leaving room for negotiation in a home’s list price a worthwhile tactic for home sellers to utilize? We’re in late spring now, and the activity in our real estate market is sky-high. Jobs and wages are on the rise, buyers have a sense of urgency to lock in rates now before they go up, and there simply aren’t enough homes listed for sale to keep up with demand. As a result, bidding wars have become commonplace and home sale prices keep climbing. A common sentiment sellers have is, “Why don’t I just price my home high and leave room for negotiation later if this is such a good market?” The big reason this strategy doesn’t work is because of all the knowledgeable buyers in our market. When you overprice your home, they will know it and move on to the next one. It comes down to pricing the property to sell. Buyers are looking at multiple properties, and they will make an offer on the best value. It’s best to price your home at market value. Let’s say you’re driving down a road and need to get gas. There are two stations conveniently located right next to each other. The difference is that one station has gas on sale for $2.50, while the other has gas for $3.00. You will obviously go to the station that has gas for $2.50 without thinking about it, and that’s kind of what happens when you overprice your home. The home that is a better value will get the most attention. It has also been statistically proven that a home gets its most attention from buyers in its first 21 days on the market. The interest nosedives as sellers make price reductions. The buying community will start to think there is something wrong with the property if it doesn’t sell within that time frame. We believe it’s always best to price your home at market value so we can guarantee it will get a ton of activity right out of the gate so multiple buyers can come in and drive the price up. If you have any questions for us or any suggestions for future topics to cover, give me a call or send me an email. I would love to hear from you soon.

Today, I’ll go over the latest numbers from the South LA County real estate market. Looking to buy a Los Angeles home? Search all homes for sale  Selling your Los Angeles home? Get a FREE home value report What’s happening in the real estate market here in South LA County? Right now, there are 1,107 homes for sale. Compared to the 1,253 homes on the market at this time last year, we have seen an 11.7% dip in the number of homes for sale, which is just one indication that we are in a very strong seller’s market. We have about 800 new listings coming on the market every month. Last year, there were 1,020 new listings each month, so new listings have dropped by 27.5%. Again, that just shows that we continue to be in a strong seller’s market. On the other hand, closed sales slightly increased, with 524 units sold each month last year to 537 units sold so far this year. That is an increase of about 2.5%, which means that buyers need to get serious about whether or not they will come into the market. We are averaging about 758 pending transactions per month, which is a 4.5% decrease from the 792 pending transactions at this time last year. This tells us that we have less inventory available in the current market. We are in a very strong seller’s market. How much inventory do we have? Right now, we have 2.1 months of inventory available, which is down from 2.4 months the previous year. In short, this means that if no other properties came on the market, we would sell all of our inventory in just over two months, which places us in a very strong seller’s market. The current mortgage rate for a 30-year fixed mortgage is about 4.19%, and the rate for a 15-year mortgage is at 3.41%. Those rates are fluctuating slightly now that the Fed has raised their rates, but generally speaking, they are fairly stable, which is good news for buyers. If you have any other questions about buying or selling a home in our current market, please don’t hesitate to reach out to me. I would be happy to help you!

What are the latest trends in flooring? Today I'm joined by my friend and flooring expert Rob Malins to discuss this topic. Looking to buy a Los Angeles home? Search all homes for sale  Selling your Los Angeles home? Get a FREE home value report Today I'm happy to be joined by my good friend and flooring expert Rob Malins of The Carpet Guy to talk about the latest trends in flooring. Rob's been in business for about 22 years helping clients with their flooring needs. Everybody knows about tile, hardwood, and laminate floors, but where's the trend going? As Rob says, carpet started becoming less popular in favor of hardwood floors about 15 to 18 years ago, and now, hardwood floors are the predominant trend. Since installing hardwood floors prior to a home sale can be expensive, the trend of laminate floors came about, costing about half as much as hardwood. Wood-look tiles are becoming more popular as well. Luxury vinyl tiles are beautiful and look exactly like wood or tile, and they're also very soft and resilient. Since they're good with water, you can have them throughout your home. When laminate floors first came onto the market, they looked very cheap and tended to be tacky when you walked on them. Now, laminate floors have been improved to look almost exactly like hardwood flooring or stone, and they have a cushion underneath them to make them softer and quieter. It's quite an advantage to have over hardwood, which costs twice as much. Laminate flooring is almost impossible to damage. Laminate floors are hard to damage, but if a section has some serious damage, you can just click it out from the wall, replace the damaged piece, and click it back, and you'll be set for the next decade, Rob says. Rob gives his clients enough extra material to keep some in their garage in case they need to replace a piece like this. You can't refinish laminate flooring, but you don't need to because it's almost impossible to damage, Rob says. Most people are interested in hardwood floors. Rob says a lot of people in his industry are 'racing down to the bottom' to the cheapest hardwood available, and this means there is a large range of quality available in hardwood flooring, but Rob tries to get the best of each category. They have a lot of beautiful options at very low prices, which can help home sellers maintain their equity when they install new wood floors while preparing to sell their home. If you have any questions for Rob, you can reach him at [email protected]. If you have any questions for me or you're thinking about buying or selling a home, give me a call or send me an email. I'd be glad to help you!

The biggest difference between a 30-year mortgage and a 15-year mortgage is cash flow. The 15-year mortgage offers more of it, and here’s what you can do with it.   Looking to buy a Los Angeles home? Search all homes for sale  Selling your Los Angeles home? Get a FREE home value report What’s the difference between a 30-year and a 15-year mortgage? Between the two of them, the biggest difference is cash flow. With a 15-year mortgage, you’d obviously be paying the mortgage off in half the time. Additionally, the bank would give you a lower interest rate because they’d get their money back in half the time. For those who can afford it, a 15-year mortgage is a better option. What does this mean for you as a homeowner? Why should you consider the 15-year mortgage over the 30-year mortgage? Aside from cash flow, there are three other benefits a 15-year mortgage offers: Once you end your 15-year mortgage, that gives you more cash to invest in other options like retirement accounts You can spend that extra cash flow to increase your current home or lifestyle. It gives you extra cash flow to bid higher for a nicer home down the road. In summation, by compressing your loan period from 30 years to 15 years, you’re ending the loan more quickly, you’ll have a much more favorable interest rate, and it puts you in a better position to have cash for other options down the road. If you have any questions about this topic, please feel free to give me a call. I’d be happy to speak with you!

Major shifts are predicted take place in our market in 2017, so today I want to relay those shifts and give you an idea of where our market currently stands. Looking to buy a Los Angeles home? Search all homes for sale  Selling your Los Angeles home? Get a FREE home value report What’s been happening in our real estate market lately? Here are four major impending shifts as predicted by the NAR you need to know about: 1. First-time buyers will play a big part in home sales in 2017. In fact, one-half of those buyers will be millennials. Today, about 33% of younger first-time buyers comprise the whole buying public. In 2017, it’s projected that 55% of the buying public will be first-time buyers. Of that 55%, about 61% of those first-time buyers will be millennials. 2. Affordability will become a big factor with the onslaught of first-time buyers. In 2016, the big issue for buyers was a lack of inventory. In 2017, the issue will be qualifying for a loan. 3. There are three primary attributes buyers will look for in 2017: safe neighborhoods, a larger living space, and a larger yard space. 4. Competition for properties in the suburbs will heat up. This means if you’re looking to buy or sell in 2017, it’s important that you get a jump on that action as soon as possible. In light of these impending shifts, I want to provide you with a statistical comparison of the current markets in LA County and Orange County. Competition is heating up for buyers and sellers. In LA County, the median home price is $484,630, which is over a 9% drop between October and December of last year. Year over year, between November 2015 and November 2016, we had a 5.8% increase in median home prices across the board. When you compare the last two years, from November 2014 to November 2016, we had a 25.3% increase in home values. As a whole, LA County has an unsold inventory of 3.3 months. The average days on market for homes sold is at 36 days. In Orange County, the median home price is $734,500, which is actually a 2% drop from October 2016 to November 2016. Year over year, between November 2015 and November 2016, the median home price rose 4.2%. Between November 2014 and November 2016, property values increased by 26%. Coincidentally, Orange County also has an unsold inventory of 3.3 months. The average days on market for homes sold, however, is at 49 days. Obviously, any of these stats would be specific for any micro-markets within either county, but this gives us an idea of where the market in our region stands as these NAR predictions begin to unfold. If you have questions about this topic or any other real estate needs, please feel free to give me a call. I look forward to speaking with you!

In our current market, you’re much better off buying a home instead of renting one. Today I want to tell you why. Looking to buy a Los Angeles home? Search all homes for sale  Selling your Los Angeles home? Get a FREE home value report Why should you buy a home instead of renting one? There are three good reasons I want to share with you today.   The first reason is that the cost of renting is on the rise. According to studies, rent increases have far outpaced inflation in recent years. Vacancy rates are low, and the growth in renter households is high. This means that landlords have greater pricing power to set their rents. The second is the high cost of not owning a home. The average rate of a home price appreciation over the past 20 years has been about 3% per year. Let’s say that you invested $10,000 into a home at a purchase price of about $200,000 and over a period of a five-year hold, that property increased 3%. That means your net increase in appreciation (or equity, if you will) is about $40,000. If you subtract the first $10,000 for your down payment, your total equity growth equates to $30,000. That amount far outpaces anything you could’ve done while paying someone else’s mortgage by being a renter. Renting amounts to paying someone else’s mortgage. The third and final reason is that there are many tax benefits to owning a home. In many cases, mortgage interest rates and property taxes are deductible every year. Let’s say you pay $1,200 a month in mortgage interest and property taxes and you’re in a 25% tax bracket. This means you’ll save about $300 a month by owning a home versus renting one. If you have any further questions about this topic, please don’t hesitate to give me a call. I look forward to speaking with you soon! 

Reverse mortgages are a complicated subject, so today I wanted to discuss what you need to know about them and how you can pay them off. Looking to buy a Los Angeles home? Search all homes for sale  Selling your Los Angeles home? Get a FREE home value report How do you pay off a reverse mortgage on a property? As more and more seniors turn to reverse mortgages in current times, their surviving spouses and/or children have a couple of options to do this once they pass on.  One of those options is to pay that loan off immediately by putting that property on the market, covering the cost of the sale, and paying off the loan with the net proceeds. Also, if a property is “under water” at the time that the owner passes on, meaning that the loan value is higher than the property value, the home can be sold to the surviving owner(s) of the property for 90% of the market value.  It’s important to note that if a homeowner passes on and they had leased that property out, then that property loan is due immediately. If, by chance, you have an older family member that has a reverse mortgage on a home, you’re gambling a bit if you have that property rented out because, according to the rules, you can’t do that. More importantly, if you do break that rule and the lender doesn’t understand that or is aware of that, then at the time that the owner passes on, there could be some legal issues that arise relative to that tenant’s rights. This is a scenario that you should speak with a real estate attorney about. Speak with an expert so you don’t leave yourself or your loved ones vulnerable. Another important factor in a reverse mortgage is the notice of demise. This talks about how the mortgagor determines whether or not an owner has passed on. They do this through a number of different sources, such as searching the social security death index or other proprietary databases that talk about whether the owner is still alive. Your family member may also receive an annual letter from the lender confirming that they’re a) still alive, and b) in the home. What are the spousal rights when a spouse passes on and there’s a reverse mortgage on the property? The surviving spouse might be able to remain in the home even if he/she wasn’t the co-owner because of certain HUD guidelines. This is important because some borrowers will remove a younger spouse from their home title to secure a reverse mortgage. You have to speak with reverse mortgage companies to understand what those details and requirements are so you don’t leave a younger spouse vulnerable to eviction and potential foreclosure after an older spouse’s death.  Reverse mortgages are a complicated subject, so if you’d like more information about them, please don’t hesitate to give me a call. I look forward to speaking with you!