Category Archives: Real Estate

Flat fee real estate listers launch in San Diego

British real estate company Monday launched a flat fee home listing service in San Diego County, charging sellers $3,200 to list a home.

The cost is likely cheaper for most sellers who are used to a 2.5 percent listing fee, so the offer could save sellers hundreds of dollars in commission costs.

Purplebricks, with its flat fee, adds to a growing number of companies that are lowering commission fees in the competitive Southern California housing market.

Eric Eckardt, CEO of Purplebricks’ U.S. operation, said the company offers as much, or more, than a traditional real estate brokerage. Low listing fees are sometimes associated with agencies that don’t do much for clients.

“The flat rate obviously is a great value,” he said. “Home sellers get 3-D virtual tours, a full-service offering, professional photography and a local real estate expert that actually shows up at the house and works with them throughout the process.”

A typical listing fee is about 2.5 percent of the sale cost, and an additional 2.5 percent for the buyer’s agent.

For a median priced home in San Diego County, $540,000 in November, a seller could save roughly $10,000 on listing commission fees.

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California – How will the fires affect insurance rates?

This year’s wildfire fire disasters, including the Lilac fire, could change insurance policies in California. Insurers are likely to take a massive hit as 2017 is now the worst wildfire season in the state’s modern history. Here’s what you need to know:

Insurance rates could slightly go up with all these wildfires

Homeowner insurance rates could go up in fire-prone areas, but state laws will likely hold back any dramatic increases.

Regulators like the California Department of Insurance are quick to say that rates are based on 20-year averages, so one year is not going to make a significant difference. By California law, insurance companies can’t increase rates without government approval and the state can reject increases it deems excessive.

But, Cathy Seifert, equity analyst at CFRA Research, said insurers will still ask the state to allow them to charge more because of the severity of recent wildfires.

“These losses are likely to review their risk assessment and how much exposure they want to these areas,” she said.

However, California’s Proposition 103 gives state regulators tools to prevent major increases. Since 2011, the department has rejected nearly $2.6 billion in requested premium increases by insurers.

Also, the proposition calls for “catastrophe loading” by insurance companies where large losses are spread out over a 20-year period.

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How the Senate tax plan affects San Diego housing

The Senate bill would keep the mortgage interest deduction as is, except remove an equity debt deduction of up to $100,000. The House plan would lower the annual mortgage interest deductions to newly issued loans totaling no more than $500,000, down from $1 million right now. This is a major concern for real estate agents because homes in San Diego cost more than the rest of the nation.

As of the start of November, 3,651 out of 32,900 homes had sold in 2017 for more than $1 million in San Diego County, said ReportsOnHousing. In the same time period, 17,862 homes sold for more than $500,000.

What does that mean for buyers: Typical buyers put 10 to 20 percent down, so most San Diegans will not be affected by the deduction yet. The luxury market is another story.

What does it mean for affordability: The bills both look to nearly double the standard deduction, so people might have more money in that regard. However, both the Senate and House versions of the bill would curtail the state and local income tax deduction as they are now (the Senate version includes an amendment to allow deductions of up to $10,000 for state and local property taxes). Because taxes are high in California, it could mean less income for potential buyers.

How will millennial buyers fare: Many millennials have student loans, especially those being recruited by tech companies in California, that could prevent them from having enough money for a down payment. The House bill would remove the student loan interest deduction, which allows borrowers to get back up to $2,500 a year. The Senate bill leaves the deduction alone. There were 1.1 million student loan deduction claimants in California in 2016, said the National Association of Realtors.

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