MANHATTAN BEACH SUN July 5, 2012 Page 13 Buying A Home: Prepare by Getting Your Finances in Order (ARA) - For those considering buying a Start by checking your credit report. You’re home, the current real estate market presents entitled to one free check of your report, some unique opportunities. One of the side from TransUnion and other credit report- effects of the economic roller coaster ride of ing agencies every year. As much as you the past few years is that home prices have need to check your report to find out what gone down and more homes have gone on shape your credit is in, it’s also essential the market. For buyers, that means more to review it for inaccuracies or fraudulent choices and better deals. However, those activity, both of which can have a negative same tumultuous years also can also teach impact on your score. buyers a lesson: Make smart buying decisions If your credit health needs some work, and be wise with your finances. start taking action immediately. Paying bills Impulsive buying is never a good idea on time, reducing your overall debt and when it comes to a purchase as significant limiting new credit inquiries can all help to as a home, but it was something of a trend build your credit - but be patient as it can at the height of the mid-2000s. Now, with take time for your positive actions to take banks lending far more cautiously, you need effect. Nevertheless, the sooner you make to be absolutely certain that your finances the effort, the sooner you’ll see results. are in order - and healthy - to be able to Making a prudent decision about buying a get the best deal on your purchase. house comes down to an honest assessment of There are a number of steps you can take what you can afford. Keep in mind that you to get ready to buy a home, and you might might be approved for a loan that’s larger than need to work on them simultaneously. Con- what is practical for you to afford. While it sider that you’ll need to start saving, if you may be tempting to buy a pricier house, the haven’t already, but you’ll also need to review stress of struggling to make payments could Make sure your finances are in order - and healthy. your credit score and do what you can to either maintain it or work toward healthier and even put you at financial risk. One rule Open House Directorydiminish your enjoyment of your new home credit. Both of these tasks will help make of thumb is that most borrowers can afford the home-buying process better for you. a home loan that runs about two and a half Your credit is an important factor in de- times their annual salary. termining the terms under which you can Buying a home is a complex process, but • Sun 2-4 708 E. Palm, ES 5bd + offi ce/3ba, 3-car side by side garage get a mortgage. Broadly speaking, the better one that is ultimately very rewarding when Kirk Brown & Kirk Brown, Jr. Main Street Realty 310-322-0066 your credit is, the more positively you’ll be done right. By organizing your finances well • Sun 2-4 1357 Voorhees Ave., MB 3bd/1ba $999,000 viewed by lenders - and that can lead to in advance, you’ll help set yourself up for Bill Ruane RE/MAX Beach Cities Realty 310-877-2374 better interest rates. And because you’ll be success. For more information about credit • Sun 2-4 913 Cedar St., ES 2bd/1ba $669,000 paying off your home for years to come, and buying a home, visit www.transunion. Bill Ruane RE/MAX Beach Cities Realty 310-877-2374 it’s important to get the best rate possible. com. • Real Estate from front page ket for four or five months—mainly ones now higher with less product on the market help subsidize Medicare has caused some If the house goes for $950,000, the addi- listed in 2011--several others closed within (fewer than 20 homes listed compared to uproar in recent months. But according to tional capital gains of $50,000 would then a few weeks. As an example, a home on 60-plus during the peak of the slowdown). data from the National Association of Re- be tacked onto the $300,000 AGI to create West Pine Avenue sold at its asking price While not quite as booming as residen- altors, the tax will only affect individuals a new AGI of $350,000. The 3.8 percent the very same day (May 24, 2012) it listed. tial, commercial values are also up five to with an adjusted gross income (AGI) above tax would now apply to whichever of the “This is definitely the best it has been in seven percent, according to Ruane, who $200,000 and couples filing a joint return following dollar figures is the lesser: three years,” said VanHook of today’s real was quick to emphasize that the “for sale” with more than $250,000 AGI. This auto- --The amount by which the couple’s estate climate. signs on Main Street don’t mean businesses matically excludes 97 percent of American taxable income now exceeds the $250,000 At its worse in 2009, local homes may are closing. “One owner who leases out households right off the bat. Even then, the threshold (in this case, that’s $100,000 since have lost on average about 20 percent of spaces to different businesses is selling tax will only be assessed on house sales the AGI is $350,000) their value compared to when housing was his properties there in order to invest in a if the capital gain realized is higher than --The amount of taxable income gained at its peak in the middle of the last decade, larger project,” he explained. Ruane also $250,000 for an individual or $500,000 from the sale of the home ($550,000 profit Ruane estimated. “We’re gaining it back,” he noted that two 1,500-square foot restaurants for a couple. minus the $500,000 exclusion, or $50,000). said of those values, adding that El Segundo and a 2,700-square foot professional busi- Let’s say an El Segundo couple makes Since the second dollar amount is the is now transitioning into a seller’s market ness will likely lease space at the recently $300,000 AGI and bought a home in 2004 lesser of the two, the couple would pay an for the first time in years. “And it’s a good vacated El Segundo Post Office site. at a cost basis of $400,000. The capital gains additional tax of 3.8 percent of $50,000, time to refinance because there are better The 3.8 Percent Sales Tax on Home exclusion (amount of tax-free profit they can or $1,900. If they made $500,000 or less comps. People should have their property Sales—Should You Worry? make on the sale of the home) for couples profit on the sale, they would not pay any evaluated yearly.” Ruane added that short A widely misunderstood 3.8 percent tax on a principal residence is $500,000, so the additional tax. So in essence, the tax will sales and foreclosures are also down by likely to take effect for certain real estate only way they would be liable for the tax only impact those with unusually high capital two-thirds and that demand for housing is transactions beginning January 1, 2013 to is if they sell the home for over $900,000. gains on home sales. • 2105 W. 187th St. Torrance Just behind a beautifully manicured Japanese black pine tree lies a comfortable 3 bedroom, 2 bath single family home in the City of Tor- rance. Almost 1400 sf. Convenient serene cul de sac. Oversized fireplace in the living room. Spacious sunny kitchen and dining area Roger Hart feature lots of built-ins and generous cabi- 310-781-2000 net space. Several dual paned windows. Master bedroom has attached 3/4 bath with newer vanity. Full bath was recently updated. Grassy backyard has a covered patio. 2420 W. Carson St. #120 Listed at $439,000 Torrance, CA 90501
Manhattan 7.5.12 update
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