One-Story Vs. Two-Story Homes: Which One Should You Buy?


Buying a home is a big deal, and comes with plenty of important decisions that need to be made. If it’s a single-detached property that you’re looking for, you might be struggling to choose between one-story or two-story homes.

The option you end up choosing will depend on a number of factors, namely your housing market, the location, and your specific needs. There really is no clear-cut answer to which of the two is better, as they both come with their own set of pros and cons.

Two-Story Homes

Two-story homes are very popular for a variety of reasons, including the following:

Separation between living and sleeping areas. Many buyers like the idea of having a two-story home in order to provide some sort of separation between the living and sleeping quarters. This is certainly a huge advantage, especially since it offers more privacy and cuts down on noise that may be coming from the living areas.

Cheaper by the square foot. Generally speaking, two-story homes cost less per square foot to build because the foundation and roof are typically smaller than single-story homes, on average. These tend to be the most expensive components of a home, which is why two-story homes are less expensive to construct on a square-foot basis.

Less land to occupy. Since the footprint of two-story homes tends to be smaller than ranch-style homes with only one level, they take up less space on the lot they sit on. This allows for larger usable space outdoors to enjoy.

More energy efficient. Two-story homes are typically more fuel efficient compared to single-story homes because less exterior wall and roof area is exposed to the outdoor elements. In addition, plumbing pipes usually have a much shorter distance to travel throughout the home, which can also cut down on energy costs.


Single-Story Homes

As advantageous as two-story homes may be, there is definitely a case to be made for one-story homes as well.

Fewer stairs to climb. There’s no need to have to climb a set of stairs to go from the living area to the bedrooms. Not only is this more convenient, it can offer a safer alternative for young children and the elderly who are more prone to dangerous falls involving stairs. That means no baby gates are needed at stair landings and accessing all parts of the home is easier and safer for those who are mobility-challenged.

More uninterrupted living space. Since there’s no need for a staircase to take you from the living area to the sleeping area, more space can be freed up in a single-story home.

No noise from upper-level traffic. Without a second floor, there’s no noise from occupants walking about upstairs. 

Easier evacuation. Should there ever be a fire, escaping from the home is much easier and safer from the main level. If the fire blocks off any exits from an upper level in a two-story home, evacuating can be much more difficult if not impossible without being rescued from a second story window. 

Easier access to the gutters. It’s important to clean the gutters every so often in order to prevent any blockages that could translate into water damage to the home. With a single-story house, the gutters are much more easily accessed for cleaning purposes. Not only that, you’ll also have an easier time reaching the windows whenever they need to be cleaned.


Which Option is Better?

The choice between a single-story versus a two-story home is a subjective one that ultimately comes down to your own personal preferences. Your current living situation should obviously be considered, but so should your future needs if you choose to stay put for the long haul. That said, being aware of the potential advantages and disadvantages of both types of properties can help you make the right decision based on your needs and expectations.

11 Tips to Buying a Newly Constructed Home From a Builder


Buying new home construction is much different than buying resale. As such, you might want to prep yourself for the process before taking the plunge on a new build. Here are some key things to know about buying a new construction home from a builder.

1. Do Some Research on the Builder

Check out other developments, speak to homeowners, and search online for reviews of builders to make sure you work with a reputable one.

2. Ask for Builder Concessions


Builders don’t typically like to negotiate a lower price, but you may be able to get some sort of deal by asking the builder to cover closing costs, pay for a fence or landscaping, or include appliances without any extra cost to you.

3. Carefully Review the Builder’s Warranty

Many builders offer warranties for as much as 10 years for structural issues, as well as shorter warranties for things like the plumbing or electrical. Make sure to check the exact type of warranties you’ll be given.

4. Expect Delays Before Construction is Complete


Even though you may be given an expected completion and occupancy date, don’t be surprised if you’re told that the date has been pushed.

5. Ask For Leftover Paint, Tiles, etc.

If you ever need to do a touch-up job, it would be a lot easier to have the exact match in materials to ensure a seamless result.

6. Have Your Own Home Inspection Done


Make sure your purchase contract allows you to bring in your own home inspector to check out various components of the home.

7. Don’t Be Fooled By What You See in the Model Home

A model home is loaded with upgrades which don’t come standard. Make sure to ask the builder for a list of all the standard features and those that require a paid upgrade.

8. Discuss New Construction Mortgages With Your Lender


The process of getting a mortgage for new home construction can be different than buying resale. Make sure to speak with a local lender to discuss your financing options.

9. Consider the Future of the Neighborhood

Investigate what the community will look like in the near future. Inquire about any further developments in the area, such as new infrastructure, more subdivisions, and amenities.

10. Pay Close Attention During Your Final Walk-Through


During your final walk-through, keep your eyes peeled for any issues, no matter how minor they may be. Make note of them and communicate these issues with the builder to have them fixed before you move in.

11. Bring in Your Own Agent

Always use your own agent, even when buying new home construction. This will ensure that your best interests are looked after and that you truly get what you want out of the deal.

7 Tips to Snag the Best Deal on a Home Purchase


Homebuyers are always in search of the lowest price on a home purchase. The more house you can get with the smallest amount of money, the better. But snagging a great deal on a home requires a few savvy tactics aside from blatantly throwing the seller a lowball offer. If you go about things the right way, you just might be able to walk away with the home of your dreams at a price you can comfortably handle.

Here are 7 tips to help you get a great deal on a home.

1. Shop Around For the Best Mortgage Package

Before you start looking for homes, start shopping around for the right mortgage broker to work with. By doing some comparison shopping, you’ll be able to find the best mortgage package for you that offers not just the lowest interest rate, but also the lowest fees as well.

Of course, the rate you will be offered will depend heavily on your credit score. If yours is in need of improvement, you may want to take a few months to boost it before buying a home. You’ll be stuck with your mortgage – and the rate that it comes with – for years. The lower the rate, the more money you can save in mortgage payments over the long haul, which could translate into thousands of dollars.

2. Sweeten the Deal

Anything you can do to make your offer more attractive to the seller – aside from just the purchase price – can help entice the seller to accept your offer. Before you draft up your offer, find out exactly what the seller wants and needs.

For instance, have they already bought a house or accepted a job offer out of town and need to close ASAP? If so, give them the closing date they want. Do they want to stay put until their kids finish their school year? If so, push the date out to give them as much time as they require. Finding out what terms the seller is looking for and giving it to them can help sweeten the deal and get you the house at a lower price.

3. Look For Listings That Have Been Lingering on the Market

In a hot market, properties are snatched up pretty quickly. However, there may still be homes that have been sitting on the market longer than the current average. Many times homes that linger on the market are the result of inflated listing prices.

One of the biggest mistakes that sellers can make is listing too high, which inevitably scares prospective buyers off and leads to a stale listing. The longer a home has been sitting on the market, the more desperate the seller may be. In turn, they may be more willing to accept a lower price on their home just to get it off their hands.

4. Buy a Fixer Upper

If you’re willing to put in a little time and elbow grease, you may want to consider buying a fixer upper, which will more than likely come at a lower price than a home that’s move-in ready. Not only will you be spending less on the purchase price, you’ll also have the opportunity to add equity through improvements, which would bump up the value of the property. Not only that, you’ll be able to customize the home to your tastes and needs.

However, if the home is in really rough shape that will necessitate more than just a few cosmetic upgrades, it could end up costing you more than you’re prepared to spend. Have a contractor walk through the home with you before you sign on the dotted line to make sure the cost of repairs won’t exceed your budget.

5. Present Yourself as the Perfect Buyer


Obviously, a buyer’s offer is extremely important, but sellers will also want to scope out the buyer to see if they’re serious about buying and are worthy contenders for bidding on the home. In a competitive housing market, anything that you can do to stand out should be considered.

Cash buyers will clearly have the leg up against other buyers, so if you can muster up the funds to present an all-cash offer, you’ll definitely be viewed favorably in the eyes of the seller. If that’s an impossible feat for you, do what you must to line up good financing to show the sellers that you’re financially capable of closing the deal. Without financing in order, you’ll be at a disadvantage.

6. Ask the Seller to Cover the Closing Costs

If you can’t get the sellers to budge very much on the purchase price, see if they’ll help you save in other areas, such as closing costs. The expenses related to closing a real estate deal can be pretty hefty for buyers.

If you’ve presented yourself as the ideal buyer, the seller may be willing to help cover the closing costs for you which can help save you a bundle when all is said and done. Having the seller pay for your closing costs is a great way to save some money while still giving the seller the satisfaction of getting the price they want for their home.

7. Work With a Good Agent

The agent you work will play a key role in the kind of deal you get on a home purchase. Ideally, the agent you choose will have a long track record of buying in the market you’re looking in and will have lots of experience with negotiating. The real estate transaction is an emotionally charged one for the seller, so working with a seasoned agent can help put any fires out and ensure a seamless process that will end with an excellent deal for you.


The Bottom Line

With a little careful planning and the implementation of some smart strategies, getting a great deal on a home can become a reality. Start preparing for a home purchase as early as you can to get all your ducks in a row, and work with a solid agent who can provide you with helpful tips to bring the down price of your home purchase as low as possible.

INFOGRAPHIC: California Sales Report For June 2017


6 Things Sellers Should Know About Capital Gains Taxes


Home values have skyrocketed over recent years in many markets across the country. Homeowners who decide to sell anytime can potentially make a big profit if they have a lot more equity in the home compared to what is still owed on their mortgage.

But there are circumstances under which any profits made after a sale may be subject to capital gains taxes.

Capital gains tax is applicable to any profits – or capital gains – that are realized upon the sale of real estate minus the cost basis. The cost basis is the amount that you paid for your home plus any monies you paid to make repairs, maintain the property, and the associated costs of selling.

Not all properties are subject to these types of taxes, but many other are. It’s important to know if your particular sale would qualify you to pay any capital gains taxes before you place your home on the market. 

Here are important facts that all sellers should know about capital gains taxes before they sell.

1. Exemptions Are Only Applicable to Primary Residences

If the home you are selling is not your main residence, odds are any gains will be taxed when you sell. The IRS will want to make sure that the home you are selling is your main residence, and if it isn’t, capital gains taxes will likely be applied if you profit from the sale.

2. How Long You Owned and Lived in the Home Matters


Not only does the home have to be considered your main residence according to the IRS, it must also have been your primary home for a minimum of two out of the five-year period before you sell, which would make it a long-term asset on your books. Any less than that would deem the home a short-term asset. Capital gains on short-term assets are much higher compared to long-term assets.

However, you don’t necessarily have to have lived in the home for two straight years. You could live in the home for one year, move out for a year, then move back in for another year, just as long as it totals two years within the five years before you sell.

3. You Can Take Advantage of a Capital Gains Tax Break Many Times

There is no limit on how many times you can be excluded from having to pay capital gains. As long as you own and live in the home as your primary residence for two out of the five years before selling, you can essentially repeat the process over and over again without having to pay any capital gains taxes on any profits you make.

4. Your Maximum Deduction is $250,000


The IRS will only allow homeowners to be excluded from paying capital gains taxes up to a maximum profit of $250,000. If you make more than this amount in profits when you sell, that amount over and above the $250,000 will be taxed by the IRS.

This number jumps to $500,000 for married couples. However, they don’t have to co-own the property together — just one spouse must own the home for two of the last five years in order to qualify for this exception. If the couple divorces before the two years is up and moves out, the homeowner spouse can only claim part of that amount based on how long they actually owned and stayed in the home. For instance, the owner may claim half of the $500,000 if they only lived in the home for one out of the two years.

4. A Loss on the Sale Cannot be Deducted

When you sell a property for less than its cost basis, you will experience a capital loss. If you suffer a loss when you sell your home, the IRS won’t allow you to deduct these losses from your taxable income. The exclusion is only applicable to capital gains.

5. You Don’t Have to Report Any Gains in Most Cases

If you and your home qualify for exemption from capital gains taxes, then you don’t have to report any gains to the IRS. If only part of the gain can be excluded, however, you may have to report your gains.

6. You May Be Excluded From Capital Gains Taxes For Unforeseen Circumstances

There may be times when you will be forced to sell your home before the two out of the five years is up before selling. In certain cases, the IRS may grant you a full exclusion from the taxes on an early sale. Some of these situations may include death, job relocation, loss of a job, damage to the home as a result of a natural disaster or act terrorism, or seizure of the home from the government.

The Bottom Line

Having to pay capital gains taxes on the sale of your home can be an unpleasant surprise if you aren’t expecting them. That’s why it’s important to get informed about these and other types of taxes that may apply to you. While the information in this article is meant to enlighten you on the potential to pay capital gains taxes and the circumstances that may exempt you from them, it’s in your best interests to speak with your tax professional in order to remain compliant with the IRS.

Top 7 Things California Landlords Should Know to Avoid Legal Issues


Owning real estate is one of the most tried and true methods of building wealth over time, and by renting property, you can have someone else pay off your mortgage for you as you build up equity. But as potentially profitable as being a landlord can be, it can also be complex and filled with hassles, especially if the proper protocol isn’t followed. Before becoming a landlord, make sure you’re aware of the following things first to avoid landing yourself in a legal debacle.

Be Careful of Discriminating When Marketing Your Property

You need to be very mindful about how you market your property and how you choose your tenants. The unit’s description and the questions you ask prospective tenants need to be worded very carefully. If it seems as though you are being discriminatory when choosing your tenants, you could find yourself in legal trouble.

Of course, you absolutely have the right to deny certain applicants for a variety of reasons, such as poor credit, lack of good references, and lack of employment. However, you cannot reject anyone based on their age, sex, race, religion, sexual orientation, personal traits, or disabilities under California law.

There Are Rules to Follow Regarding Raising Rent

In California, you cannot raise rent whenever you want, nor can you necessarily raise it as high as you want. If your rental property is located in one of the communities in California that have rent control, there will be rules governing how much you can raise the rent.

There are certain cities and counties in California with specific laws that put a cap on how much rent landlords are allowed to charge. Rent control laws vary a great deal from one city to the next, so it’s important for every landlord to check with their own local laws to see if there are any that restrict how and when to increase rent. Generally speaking, however, rental rates cannot be raised during a lease before it expires. It’s usually something that is altered when a lease ends and a new lease is negotiated and entered into.

Be Careful With Security Deposits

As a landlord, you’re allowed to request a security deposit to cover the cost of any damage that the tenant may cause during the lease period. You can retain the money after the tenant vacates to make any necessary repairs. But the amount you can ask for has a limit. In California, the deposit limit is usually two months’ worth of rent for unfurnished units.

Also, the tenant must be given a list of all the specific items that need to be repaired as a result of neglect or misuse by the tenant. If any monies are left over after paying for these repairs, the balance needs to be given back to the tenant. As a landlord, you could find yourself in court if you fail to submit this list and pay back any leftover money from the deposit. 


Tenants Reserve the Right to Privacy

Under California law, landlords have to give tenants 24 hours’ notice before they enter a rental property unless there is an emergency. Whether you’re showing the unit to another potential renter or buyer or repairs need to be made, you can’t just enter the property without giving the tenant adequate notice.

Your Property Must Be Deemed Safe and Habitable By Law

If the property is deemed illegal or uninhabitable under state law, you could find yourself in legal hot water. Landlords are obligated to provide safe and livable conditions for their tenants, which means the tenants should be kept safe from any hazards, nuisances, and criminal activity.

Should your tenant get hurt as a result of your neglect of the property, you’ll likely find yourself being sued. Landlords should regularly inspect their properties to make sure they are safe for habitation.

Be Upfront With Disclosures

If you are well aware of a potential issue with your property, you are under legal obligation to disclose that information to your tenants, and this information should be included in the lease. For instance, if mold exists somewhere on the premises, or if there are sexual offenders living in the complex, these are important facts that tenants should know and have the right to know before they agree to sign a lease.

You Can’t Retaliate Against a Tenant

If you have a problem with your tenant, you can’t just retaliate against them in any way you feel just. For instance, shutting off their water or electricity, ceasing garage pick-up, or hiking the rent just to get back at your tenant for whatever reason is considered illegal in the state of California.

You Can’t Just Evict Whenever or However You Want

There are specific rules regarding the manner in which landlords may evict tenants. There are a variety of reasons why a tenant may be evicted, but tenants cannot just be thrown out with no notice. In California, there is a specific eviction process that must be followed in order to comply with the law in the state.

When the tenant can be evicted will depend on the reason given by the landlord. For instance, landlords can terminate tenancies by providing three days’ written notice to the tenant if they have failed to pay the rent, engaged in criminal activity on the property, caused a disturbance on a regular basis, committed violence or abuse against another, or damaged the property.

The Bottom Line

There are certain rules that you need to follow as a landlord, just like there are rules for tenants to adhere to as well in order to make this type of relationship work. While investing in a rental property can bring about a great deal of long-term wealth, being a landlord can definitely be a complicated and sometimes frustrating experience. That said, your job can be a lot easier and stress-free if you understand your role and obligations and stick to them.

Real Estate Transaction Fee to Fund Affordable Housing Approved By California State Senate


The housing affordability issue has been a dire one throughout the state of California for some time now, but perhaps there’s a light at the end of the tunnel.

Recently, the California State Senate approved a real estate transaction fee that could make as much as $300 million available in funding to build more affordable housing across the state.

Bill 27-12 has been passed and is now in the hands of the State Assembly. The legislation would impose a $75 fee on real estate transaction documents, including deeds and notices, with a limit of $225 per deal.

Approximately 1.5 million California families are in need of affordable housing. Even more disturbing is the state’s homelessness rate: of all homeless people in the country, 21.5% are in California, the largest share of all states.

Only thirty-two percent of households in the Golden State could afford to buy a median-priced home in the first quarter of 2017, down from 34% from the same time last year. Currently, the median single-family home price in California is $550,200, up 2.3% from April and up 5.8% from May 2016. That’s more than twice the national median home price of $266,200.

In terms of homeownership rates in the country, California ranks 49th. When it comes to affordability rates, California ranks 50th.

Such numbers have placed a great amount of pressure on the state to make the approval process for new construction much easier and more streamlined.

The legislature is aimed at getting rid of some of the hurdles that hinder adequate development, such as lowering the cost of building new homes, alleviating issues related to obtaining the necessary permits, and boosting affordable housing spending in the state.

Up until now, the current 50-year old state law – which was designed to help make housing affordable for all Californians – hasn’t been able to do enough to spark new home construction. From 2006 to 2014, less than half of the 1.5 million new homes that lawmakers said developers would have to construct were actually built.

Several housing bills have gone through legislature, but none have been able to pass both houses and get Democratic Gov. Jerry Brown’s approval. The new bill would not be applicable to commercial or residential transactions, but would apply to other real estate transactions, such as mortgages or refinancing.

At the end of the day, making California housing affordable for families will require new laws to be introduced and passed that can streamline the process to approve affordable housing projects. The new law will hopefully start paving the way to improve housing affordability in the state of California and help more families find it financially easier to get into the market.

INFOGRAPHIC: 11 Things Home Buyers Are Looking For