6 Tax Facts Home Sellers Should Know

From the California Association of Realtors

1. If you’ve owned and lived in your home for two of the five years prior to selling it, you can generally exclude up to $250,000 of the gain from your income ($500,000 on a joint return, in most cases).

2. You are not eligible for this exclusion if you sold another principal residence within the past two years and excluded the allowable gain from you income.

3. If you can exclude ALL of the gain from the sale of your primary residence, you don’t need to report the sale on your tax return.

4. If you have a gain on your principal residence that exceeds the allowable deduction, it is taxable.

5. You can’t deduct a loss from the sale of your primary residence.

6. Special rules may apply when you sell a home for which you’ve received the first-time home buyer credit. (See IRS publication 523, “Selling Your Home,” for details.)


Posted on November 5, 2012 at 9:02 pm
Drew Kondo | Posted in Uncategorized |

Top Ten Legal Mistakes Home Sellers Make

From the California Association of Realtors

1. Accepting the buyer with the highest offer without regard to the other contractual terms.

2. Not properly handling multiple offer situations with multiple buyers.

3. Not properly handling back-up offers.

4. Entering into an agreement with no earnest money deposit from the buyer, or a very small amount.

5. Entering into an agreement before verifying the buyer’s financial ability to close esrow.

6. Not disclosing known material fact affecting the value or desirability of the property.

7. Not providing the buyer with legally required disclosures.

8. Not obtaining the buyer’s written acknowledgement of disclosures.

9. Not considering whether to require the buyer to remove contingencies.

10. Not excluding items from the sale that the seller wants to keep.


Posted on July 2, 2012 at 8:44 pm
Drew Kondo | Posted in Listing Properties for Sale | Tagged , , , ,

The South Lake Tahoe Market Turnaround

I haven’t said it until now, but … it appears the bottom of the market is behind us. I say that with some apprehension because I have no crystal ball. However, there’s just too much evidence suggesting a market turnaround in South Lake Tahoe. Here are some quick snippets.

  • There are currently 157 homes in escrow. Twelve months ago there were 84. Demand has clearly increased.
  • There are currently 210 homes actively listed for sale. Twelve months ago there were 300. Supply has clearly decreased.
  • I had clients ask to see property two weekends ago. They sent me a property list on a Wednesday. Of the four properties they could see, three of them were in escrow by Thursday evening. The fourth had an offer on it.
  • Historically, home sales spike during the summer in Tahoe. If homes are selling so quickly now, what will the market be like in a couple months? With ski season finished and summer yet to come, May is supposed to be the slow season for Tahoe real estate.
  • Most telling, however … properties I would never expect to sell are going into escrow regularly. This means prices are increasing.

It’s been dizzying being in real estate the last couple months. Homes priced close to market value never remain for sale more than a few days. It seems every property has multiple offers. And value is hard to track because sale prices are turning so quickly.

Market turnaround will be slowed by foreclosures and increasing interest rates. However, interest rates should rise slowly, and their rise may cause even more urgency amongst buyers to get a good rate. As for foreclosures, evidence suggests bank-owned properties will soon no longer drive the market, but that they will ride the market up with everyone else. Whatever the market depressor may be, it appears that supply and demand economics will prove stronger than any them.

Obviously, home prices are still low in South Lake Tahoe, which makes it a great time to buy a second home, investment property, or primary residence. The perfect time to buy appears to be four to five months ago, but the window of opportunity hasn’t closed. It’s time to make a trip to Tahoe.


Posted on May 23, 2012 at 2:24 pm
Drew Kondo | Posted in Market Trends | Tagged , , ,

Soroptimist International of South Lake Tahoe’s 2010 “An Evening of Food & Wine Tasting” Event

Soroptimist International of South Lake Tahoe will host “An Evening of Food & Wine Tasting” on November 12, from 6 to 9:30pm, at Harrah’s Convention Center in Stateline. The event raises money to fund the many projects and programs sponsored by Soroptimist International of South Lake Tahoe. They will be showcasing over 18 local area restaurants and 30 vintners this year. Guests will again have an opportunity to vote for their favorite winery and restaurant.

Tickets are $65 each. For information on purchasing, contact Drew Kondo at 530.545.1831 or drew@southtahoehouses.com. Please remember that all participants must be at least 21 to attend.

In addition to the main event there will be a silent auction and a raffle. You may purchase raffle tickets at $5 each or a book of 5 for $20. The raffle allows you the chance to win one of three prizes: (1) a wine cellar with 20 bottles of premium wine – valued at $850; (2) $300 in Mega Bucks pulls at Harrah’s Tahoe; 2 nights for 2 of wine tasting at MSU event in Billings, Montana (May 13-14th, 2011); and 2 nights’ accommodations in Billings plus $200 travel money – valued at $1,350; (3) a hand-made queen-size quilt created by Bobbi Cole that is priceless.

For the past 40 years, all monies raised by Soroptimist International of South Lake Tahoe have been directed back into the community through educational scholarships, youth activity sponsorships, the South Lake Tahoe Women’s Center, and numerous other projects that enhance services and the quality of life in the community.


Posted on November 2, 2010 at 11:33 pm
Drew Kondo | Posted in South Lake Tahoe Events | Tagged , , ,

South Lake Tahoe Sales Up 45% From Last Year

The Tahoe real estate market does not follow the national market.

While discussing the state of the Tahoe real estate market last month, I was presented the argument that the number of home sales are down over the last several years. Surprisingly, this is a statistic I did not track, so I went to work in the MLS and started mining data. When finished, even I was shocked at the results.

Time Period Home Sales
1/1/2010 – 6/30/2010
239
1/1/2009 – 6/30/2009
165
1/1/2008 – 6/30/2008
148
1/1/2007 – 6/30/2007
171
1/1/2006 – 6/30/2006
183
1/1/2005 – 6/30/2005
325
1/1/2004 – 6/30/2004
347
1/1/2003 – 6/30/2003
244

When I compiled these figures we were only through half of 2010, so I totaled the number of home sales for the first half of each year as far back as the MLS had record. I was amazed to find that sales are up 45% over last year, and homes are selling at the same pace they were in 2003! These numbers also suggest the correction in the real estate market may be in the rearview. The middle point between the peak – 347 – and the trough – 148 – is 248, which nearly matches this year’s total of 239. Furthermore, over these eight periods, the average number of sales is 228, which also nearly matches this year’s total of 239. Home sales bounced up, fell down, and are now at the midpoint. This midpoint is accurate as 2010 Tahoe home sales were unaffected by homebuyer tax credits because our resort market hardly sells primary residences, which were the only sales providing tax credits. The Tahoe real estate market does not follow the national market.

In addition to my recent findings, median home sale price has remained level in South Lake Tahoe since January 2009* (see graph below). Year-over-year inventory continues to decrease. Based on supply vs. demand (previous sales versus our current supply of homes), our market still favors buyers but only slightly. Our market will reach a technical, numbers-based balance within months. It may have already attained an actual balance.

South Lake Tahoe Median Sale Price Graph

Our market does not follow the national market. Our buyers represent a unique subset of buyers who seek to purchase vacation homes. They have more financial power than almost any other group of buyers in the nation. They were not affected by the downturn in the economy like the average U.S. citizen. They could have purchased at any point during the real estate downturn, but they sat on the fence waiting for the bottom. Now that it appears to be here, they are purchasing Tahoe homes in droves – at the same pace of 2003. What’s the old saying? Those who purchase when no one else will are those who will become rich.

 

Drew Kondo received his Bachelor’s of Mathematics from UT-Austin in 2001 and now sells real estate on the Tahoe south and east shores. To contact him, call 530.545.1831 or email drew@southtahoehouses.com.

* When comparing my median sale price statistics to those of other sources, it must be understood that I present median sale price for individual months and only incorporate sales from that month. This provides the most accurate representation of what occurred in that month. Other organizations offering real estate data often squeeze sales from the previous twelve months into a single month. This flattens data and makes it easier to interpret, but it also fails to represent what actually occurred in any given month.

 


Posted on August 12, 2010 at 1:57 pm
Drew Kondo | Posted in Market Trends, Statistics | Tagged , , , , , , ,

What You Should Know Before Listing a Home (Part 2)

(This article by Drew Kondo was featured in the Tahoe Daily Tribune on June 12, 2010. For Part 1, click here.)

Preparing Your Home

The presentation or “staging” of your home is crucial in obtaining the highest possible sale price. Extra time and money spent making your home presentable and welcoming can yield several thousand dollars in the sale. Here are several staging tips:

1. Declutter – No buyer wants to see a mess. If a visible item doesn’t add to the aesthetic value of your home, it needs to go. This includes pictures and magnets on the refrigerator, boxes of food sitting out in the kitchen, the hairbrush on the bathroom sink, etc. Put it all away, box up what you can, and store it all in the garage, shed, or a closet.

2. Eliminate red flags – You never want a buyer questioning the structural integrity of your home. A crack in the drywall may be the result of a home settling. However, a buyer may perceive it as a foundation problem and never consider your home again. A 20-year-old water stain? A buyer may leave your home with worries of mold. I’ve even had buyers question a home’s plumbing because of restricted flow shower heads. Never leave buyers questioning anything because even the possibility of a problem may needlessly scare them away. Just fix it.

3. Gaining “sweat equity” – “Sweat equity” refers to home improvements that yield a profit when selling a home. You may not want to install a new kitchen, but replacing old fixtures and painting walls are cheap and easy upgrades that can improve your home’s resale value.

4. Staging items – Anything to make a buyer feel more at home will help, especially in a vacant home where everything has been removed. Not much is needed. Actually, less is usually more. However, consider purchasing a nice vase or flower arrangement for a living room mantle, a couple pretty cookbooks to stand up in the kitchen, fancy place settings for the dining room table, or a wine glass and bottle of wine to place next to each other.

5. Leave the lights on – If you occupy the home you are selling, follow two rules for property showings: First, don’t be present. Most buyers are more comfortable without sellers in the property. Second, before you leave, turn on the lights in every room. Homes always show better when they are well lit.

6. Consult your Realtor or a staging professional – Real estate agents have seen multitudes of homes. They know what works and what doesn’t. Ask your Realtor for help preparing your home, and follow his or her advice. If you want even more help, some individuals and companies specialize in staging homes for sale. They can be expensive, but if you’re selling a high-end property, hiring a home stager can be a profitable investment.

7. Additional resources – The tips I’ve provided are basics in home staging. More advanced tips can be found in home staging books, on the web, and, of course, HGTV.

The process of selling a home can be intimidating. However, if one takes good measures to prepare his or her home, chooses a good Realtor, and prices the home well, it can be a successful venture. When you’re ready, help is available from your local real estate professional.

If you have further questions, feel free to contact me at 530.545.1831 or drew@southtahoehouses.com.


Posted on July 8, 2010 at 3:06 pm
Drew Kondo | Posted in Listing Properties for Sale | Tagged , , , , , , , ,

What You Should Know Before Listing a Home (Part 1)

(This article by Drew Kondo was featured in the Tahoe Daily Tribune on June 5, 2010)

The summer is finally, finally here, which means that many Tahoe homeowners will be listing their homes for sale. This can be a daunting task. For many it will be the biggest sale of their lives. Many questions arise: At what price will you list your home? Who will be your Realtor? And what changes will you make to your home before selling?

Pricing Your Home
Determining the market value of a home, especially in Tahoe, requires a great deal of skill. Value mainly hinges on size, condition, and location of a home. However, in Tahoe values can also fluctuate greatly based on view, neighborhood, lot size, floor plan, vacation rental potential, available remaining coverage, slope of a lot, and even a home’s orientation on a lot. Local appraisers, local Realtors, and extremely seasoned Tahoe real estate investors are best at pricing homes, but even their opinions differ sometimes.

If you’re considering selling a home, the good news is you can find help with the difficult job of pricing a home. Most Realtors will do this for free for the opportunity to talk to you about listing your home. A Realtor will oftentimes give you two prices – a suggested list price and a suggested final sale price. A good real estate agent will also provide information on how he or she arrived at these prices. This will be in the form of a comparative market analysis (CMA), which shows homes sold that are like yours. If you decide to ask more than one agent for a CMA, let the agents know about this. Realtors don’t mind competing against each other for listings, but like everyone else, they appreciate honesty and transparency. Contacting two or even three Realtors is fine; however, I would not recommend contacting any more than three.

Another option for determining the value of a home is hiring a local appraiser. Some consider this a little overkill. However, from time to time, real estate agents will even order appraisals when selling their own homes.

After you determine what your home is roughly worth, you must decide on a list price. Listing below market value may mean you’ll have to sell below market value, which hurts. However, the property may be bid upward if there are multiple offers. Listing a property too high above market value can also have negative affects on the sale of the home. It will likely be shown to a few qualified buyers who will write the property off as overpriced and will not consider it in the future even after several price reductions. Most real estate professionals recommend pricing at market value. A home will generate most interest in the first 30 days it is listed. If it is priced well, it will be shown frequently and will likely generate a reasonable offer or two.

Choosing a Realtor
Your choice of a Realtor is an import one. He or she will be coordinating a six-figure sale. Two of the biggest mistakes home sellers make when choosing a listing agent are selecting an agent based on who suggests the highest list price or who will take the lowest commission. These two criteria do not correlate with how a Realtor will perform.

First, getting a discount on your Realtor’s commission may leave some more money in your pocket. However, all real estate agents are not equal. Some agents have large advertising budgets and will spend time marketing your listing. Others will not provide the same service. This will affect the number of buyers who will see your home. Some agents communicate regularly with their sellers while others communicate less frequently. An agent’s experience level may be the deciding factor in the price negotiated on your home or whether or not your sale holds together. Having an agent who will provide quality service can easily be worth an extra half percent to a percent in commission costs.

Another mistake many sellers make when choosing an agent is choosing the one who quotes the highest price for their home. Yes, the idea of selling your home for oodles of money may sound great, but eventually false hope will lead to disappointment. As mentioned before, listing a property well above market value isn’t smart. An agent who leads a seller down this path provides a true disservice. Choose the agent who is honest with you, not the one who quotes you an unrealistic price in order to obtain your business…

Stay tuned for part two of this two-part article. If you have any questions, feel free to contact me at 530.545.1831 or drew@southtahoehouses.com.


Posted on June 10, 2010 at 3:03 pm
Drew Kondo | Posted in Listing Properties for Sale | Tagged , , , , , , , ,

Real Estate Interest Rate Outlook

Here is a word from Tahoe mortgage broker, Norm Hansen, on the future of interest rates:

Rates are still at an all-time low … but … we expect some changes in the 2nd quarter.

I have reported on the effective job the federal government has been doing in keeping rates low by buying mortgage backed securities … to the tune of $1.25 trillion.

That $1.25 trillion runs out at the end of March 2010 … which means if the other markets do not pick up the difference in purchasing, then rates will most likely increase. To what extent, we do not know. We do know the goverment is aware that these low rates have had a very positive impact on recovery and are sensitive to it. We await word if there will be further participation and/or impact from the goverment.

If you are rate sensitive to a refinance or a new purchase, a call to action may be prudent. As always, we like to take a positive approach … but this is something we do see on the horizon.

Norm Hansen
AmWest Mortgage
775.586.1130
nhansen@gbis.com


Posted on February 9, 2010 at 4:42 pm
Drew Kondo | Posted in Market Trends, Mortgage and Interest Rates | Tagged , , , ,

South Lake Tahoe Market Update

As the holder of a bachelor’s in mathematics, I mine for a lot of real estate statistics. The following numbers present a good reflection of what’s happening in the South Lake Tahoe real estate market. Since January 2009, median sale price has leveled. The bottom of the market is near.

The market as a whole has 9.1 months supply of inventory. A balanced market is traditionally defined by 5 to 7 months supply of inventory. Because we have a greater suppy than this, we are still in a buyer’s market. However, we are approaching balance. If the market is divided into price bands, some segments have reached balance and have even entered into a seller’s market. In the $0-$200,000 price band, only 2.0 month’s supply of inventory remain. In the $200,000-$300,000 price band, 4.5 month’s supply of inventory exists. These numbers suggest there is a seller’s market in these price bands, which is the case. Lower priced properties are seeing multiple offers and are often selling for more than their list price. If you are seeking a property in this price band, now is probably the time to buyer. The market bottom for these properties may already be in our rearview. A surplus of inventory in the higher price bands suggest that nicer homes will continue to lose value.

Median Home Sale Price – November

$320,000

Median Home Sale Price – Last 90 Days

$306,125

Number of Active Home Listings for Sale

314

Number of Home Listings in Escrow (% of Inventory)

90 (22.3%)

Average Sale Price to List Price Ratio

94.7%

Months Supply of Inventory

9.1


Posted on December 15, 2009 at 4:59 pm
Drew Kondo | Posted in Market Trends, Statistics | Tagged , , , , , , , , ,

June 2009 South Lake Tahoe Real Estate Market Update

It’s almost summer here in South Lake Tahoe, and while the temps aren’t too hot with this recent cold front, the real estate market is scorching. We haven’t seen buyer activity like this in years. I’ve seen several properties receive multiple, competing offers. They are oftentimes selling for more than list price. Things are getting crazy here and many of us real estate professionals are putting in long hours in order to keep up.

At the moment, there are 94 homes in escrow in South Lake Tahoe (We hit 100 last Friday.) We haven’t seen this many homes in escrow since July 2005, which was a month before the peak of the market. See the tables below for more statistics.

Our overall inventory is shrinking as well. Currently, there are 381 single-family residences for sale. Last year there were 414. The year before, 522. In May 2006, there were 424. With Tahoe homes reaching affordable prices and buyer confidence increasing, look for these trends to continue.

Speaking of prices, home prices have leveled off since the start of the year. I’ve checked the homes currently in escrow, and median sale price will continue to hold steady for at least the next couple months. Perhaps we are at the bottom of the market?? Statistics are increasingly pointing in that direction. A balanced market is traditionally defined by 5 to 7 months of inventory on the market. At 6.1 months of inventory, we have already reached that point in the under-$300,000 price band. We are quickly approaching that point in the $300,000-$400,000 price band. As inventory continues to decrease and sales increase, the statistics should catch up and begin to truly reflect how busy our market is.

A couple caveats …

Ninety-four homes in escrow today can’t be compared to 94 homes in escrow a few years ago. The reason for this is short sales. Short sales typically take longer to close than a normal escrow. Thus, with some homes sitting in escrow for long periods of time, this inflates the total. That said, however, only 15 short sale homes went into escrow over 45 days ago. Subtract these from our total and the 79 remaining homes in escrow still hasn’t been matched since September 2005, which was virtually the peak of the market.

In addition to this, the traditional definition of a balanced market, 5 to 7 months of inventory, may not apply in this market. Previous markets have not been affected by foreclosures like this. A new wave of foreclosures could drive prices down further. On the other hand, prices have leveled off for the last half year. And no one can argue that our shrinking inventory is a good sign of rebound.

All that said, now might be THE time to buy in South Lake Tahoe. And with another amazing Tahoe summer approaching, what better a time to come and start shopping!

Month & Year Listings at Month’s End Escrows at Month’s End Homes Sold Median $ Over Last 90 Days Median Sale $

May 2009

381
94
26
$315,000
$315,000

Apr 2009

383
60
28
$319,000
$295,000

Mar 2009

372
46
26
$320,000
$335,250

Feb 2009

381
39
28
$360,000
$329,500

Jan 2009

367
36
17
$370,000
$302,000
Dec 2008
354
32
26
$401,000
$412,450
Nov 2008
369
35
31
$425,000
$370,000
Oct 2008
395
35
46
$440,000
$470,000
Sept 2008
435
69
29
$420,000
$440,000

Aug 2008

468
45
34
$399,000
$443,750
July 2008
482
53
36
$396,000
$391,500
June 2008
465
57
30
$392,000
$365,000
May 2008
414
47
31
$396,000
$415,000
Apr 2008
372
44
21
$387,000
$379,000
Mar 2008
361
40
34
$402,500
$387,500
Feb 2008
374
52
16
$445,750
$412,500
Jan 2008
366
33
16
$466,500
$428,000
Dec 2007
382
28
34
$460,000
$502,000
Nov 2007
403
42
27
$415,000
$460,000
Oct 2007
353
15
39
$415,000
$425,000
Sept 2007
442
30
30
$415,000
$398,250
Aug 2007
538
45
38
$437,500
$421,500
July 2007
557
40
25
$440,000
$435,000
June 2007
552
33
35
$435,000
$440,000
May 2007
522
47
32
$465,500
$460,000
Apr 2007
423
32
28
$474,000
$392,500
Mar 2007
359
37
30
$482,500
$507,000
Feb 2007
327
25
25
$485,000
$492,500
Jan 2007
331
37
21
$475,750
$395,750
Dec 2006
339
29
40
$477,000
$497,500
Nov 2006
362
50
44
$464,000
$483,500
Oct 2006
411
55
53
$444,000
$450,000
Sept 2006
463
63
31
$449,500
$442,000
Aug 2006
548
46
36
$465,000
$427,500
July 2006
571
49
37
$480,000
$475,000
June 2006
532
51
37
$482,290
$480,000
May 2006
424
50
35
$482,580
$465,000
Apr 2006
302
50
32
$489,000
$504,000
Mar 2006
264
39
38
$495,000
$485,140
Feb 2006
262
51
21
$477,000
$489,000
Jan 2006
256
32
20
$464,500
$508,750
Dec 2005
198
n/a
31
$460,000
$450,000
Nov 2005
282
42
53
$485,000
$455,000
Oct 2005
300
69
55
$500,000
$485,000
Sept 2005
313
93
63
$495,000
$495,000
Aug 2005
270
96
79
$485,750
$510,000
July 2005
209
110
74
$482,000
$484,500
June 2005
188
113
65
$480,000
$456,000
May 2005
172
96
57
$489,000
$495,000
Apr 2005
116
91
72
$475,000
$488,500
Mar 2005
88
83
50
$440,000
$440,000
Feb 2005
72
86
34
$433,000
$449,500
Jan 2005
85
63
47
$405,000
$405,000

Price Range
Active Listings
Absorption Rate in sales/mo. (% of inventory) Months Supply of Inventory (Sept.)
$0-$300,000
50
8.17 (16.33%)

6.1

$300,001-$400,000
67
8.08 (12.06%)
8.3
$400,001-$500,000
67
5.08 (7.59%)
13.2
$500,001-$650,000
57
4.00 (7.02%)
14.3
$650,001-$800,000
49
2.00 (4.08%)
24.5
$800,001-$1,000,000
35
1.33 (3.81%)
26.3
$1,000,001-$2,000,000
40
1.17 (2.92%)
34.3
$2,000,001 and up
16
0.08 (0.52%)
192.0

Posted on June 4, 2009 at 12:50 pm
Drew Kondo | Posted in Market Trends, Statistics | Tagged , , , , , , , , ,