Gloom to Bloom in 12 Days

This is one of the most exciting aspects of my profession — working on a tight 12-day renovation deadline to transform a worn-out home into a beautifully staged and photographed home just in time to go on market. This Mountain View listing located in the heart Silicon Valley brought together a lot of the expertise I’ve gained over the years, so we documented the entire process to show how I took the home from “gloom to bloom.”

Phase One

With a flea infestation and near dilapidated conditions, we hit the ground running on day one. First things first, we had to rid the home of the mountains of trash that had accumulated over time. The hauling helped us remove everything from the home so that we could get to work on renovations.

Multiple truckloads of junk were removed from the home with the help of our hauling crew.

The only way to tackle this much trash is with a shovel, and that's exactly what we did.

Phase Two

The second phase was undoubtedly the busiest, starting with flea bombing the entire property. From there, the landscapers and painters got to work while my assistant, Kris, and I went over the property with the handyman to ensure all repairs would be completed on time.

The landscaping crew rids the front yard of unsightly junipers to enhance its curb appeal.

Kris and I go over kitchen repairs with the handyman.

You'd be surprised how far a fresh coat of paint goes when it comes to making a property pop.

This phase was a blur of activity, and we made significant strides as a team in preparing the home for sale. See all of the action in the video clip below.

Phase Three

By phase three, the home had come to life. All that was left was to stage it so that prospective buyers could envision what it would be like to live there. Once the furnishings were in place, it was time to go over every last detail to ensure the home was ready for showing, and ultimately, move in. We also brought in a team of inspectors to prepare pre-sale inspections. After three days of hard work, this home was ready to hit the market.

The professional stagers put the finishing touches on the home.

To ensure the renovation was successful, I personally go over every aspect of the home.

A pre-sale property inspection helps to make sure there aren't any surprises during the sales process.

While the home’s initial conditions didn’t shock me, the final reveal did. The home turned out even better than I could have imaged. I went into the open houses with confidence, knowing that the work would pay off for my sellers. Check out the clip below to get a full look at phase three and see the finished product.

Securing the Sale

Preparing a home for market means nothing if an agent can’t deliver on the sale. Within a week of concluding the renovation process, I had received three offers. Ultimately, the sale was finalized in just nine days with an all-cash offer above asking price. All in all, it was a great experience for everyone involved, myself included.

When a client entrusts me with the sale of his home, he can be sure that I will take care of every aspect of the sale from start to finish.

If you have questions about selling your Silicon Valley home, let’s talk.

To see the full process from start to finish, check out the video below!

Listing Your Home for Sale: How Buyers View the Things You Do and Don’t Do

When interviewing for a new job, how do you prepare yourself? You get a haircut and ensure your hands are well-manicured. You put on your best suit, pick tasteful jewelry, and shine your shoes. In short, you ensure that you present a polished, professional image so that the interviewing company will hire you for a nice sum of money. Because everyone knows, ‘you only have one chance to make a first impression.’ Now take this same lesson - you only have one chance to make a first impression – and apply it to a home for sale. I ran across the perfect scenario to illustrate my point while showing properties recently.

The first thing we noticed upon arrival at House #1 was that the lawn needed to be edged, watered and mowed. The rest of the landscaping continued with this unkempt look. The home’s exterior was in good shape with the exception of some peeling paint on the front door. Clutter, personal photos, Victorian decorating, and the leftover onion smell from last night’s dinner greeted us once we entered the home. Moving through the living areas to the bedrooms, we noticed that yesterday’s clothes hadn’t made their way completely into the hamper.

A neatly manicured green lawn greeted us as we arrived at House #2. The landscaping shrubs and plants were well-trimmed, and the flower beds were freshly weeded. The rest of the home’s exterior was in good shape and the front door had been recently painted. The interior of the home was light and refreshing. Soft music was playing in the background, and there was no perceptible odor in the home. There were no clutter or personal photos anywhere – you could barely tell that anyone lived in the home.

Based on their first impressions, my buyers decided to purchase House #2 even though it had a higher asking price. When asked why, the buyers cited that House #2 felt more comfortable whereas House #1 simply felt like a lot of work. In other words, they could envision themselves living in House #2 in its current state whereas they would need to update House #1 to make it feel like theirs.

What does this all mean to you – the home seller? First, it means that you need to get your home into top shape by painting, cleaning, and repairing or replacing things that are broken. Make sure your landscaping is neat and there are colorful flowers growing. Beautiful landscaping enhances the home’s curb appeal and entices people to see the home’s interior. ‘Curb appeal’ may seem cliché in concept but it is as real now as it’s ever been.

Secondly, you need to realize that once your home goes on the market, it is as if the home is no longer yours. Homebuyers are trying to envision themselves in various homes and a more neutral home will allow them to do this easier. There are several ways to make your home neutral – paint color and decorating style being the easiest. Another item that focuses the home buyer’s attention on the home itself is the removal of personal photos. The buyers will spend more time looking at your home’s features rather than curiously viewing the photos.

The final key to presenting your home well is ensuring its tidiness on a daily basis. Put away the clean dishes and load the dirty dishes into the dishwasher. Make sure the beds are made and the dirty clothes are in the hamper. Remove all bathroom items from the shower and countertop, and hang new, clean towels on the towel bars. Clean up and put away the kids’ toys. I won’t argue that doing all this every morning while trying to race out the door is a real pain. I will argue that it is a must since you never know when someone is going to look at your home. Remember, while selling your home, you are working on the buyers’ schedules not yours.

In the end, if you take the time and do these extra chores, your home will most likely sell faster, and depending on the market, at or above listing price (sometimes substantially). And that is the ultimate goal.

1031 Exchange Offers Tax-Deferment of Capital Gains

If you are considering selling your investment property, remember that the IRS will tax your capital gains at 15% and then California will take an additional 9.3% for a grand total of 24.3% in taxes on your hard-earned equity. If you would like to defer that painful tax bill, you may want to consider doing a 1031 Exchange. What is a 1031 Exchange you may ask? A 1031 Exchange allows investors to ‘exchange’ ‘like-kind’ properties rather than sell them through the use of a Qualified Intermediary who holds the sale proceeds from the first property until a replacement property(ies) can be purchased within a very specific, non-extendable time period. Let us walk through the salient points of this description one-by-one so that we can get a better understanding of the 1031 Exchange requirements.

A transaction is considered an exchange rather than a simple sale when the seller expects to acquire a replacement ‘like kind’ property. That means that if you are selling an investment property, you must state that you plan to acquire replacement investment property(ies) within a specific time frame. A special note, acquiring investment property outside of the United States in exchange for investment property within the United States is not considered ‘like-kind.’

When you acquire the replacement property(ies), you must roll all the net proceeds from the first property into the replacement property(ies) or you will be taxed on the unused proceeds. Additionally, the value, equity, and debt on the replacement property(ies) must be equal to or greater than the value, equity, and debt on the relinquished property.

You may choose one or more replacement properties to replace your relinquished property though you do need to satisfy one of the following requirements:

1. Three-Property Rule - Up to three potential replacement properties may be identified regardless of their value.
2. The 200% Rule – Any number of properties may be identified as replacement properties as long as their value does not exceed twice the value (200%) of the relinquished property.
3. The 95% Rule – The taxpayer may identify any number of properties for exchange but you must acquire 95% of the aggregate Fair Market Value (FMV) of all identified properties by the end of the exchange period. Put another way, in order for the exchange to be valid, 95% (or all) of the identified properties must be purchased.

The timeline (wiki link) for a 1031 Exchange is very specific and does not afford anyone room for error. Firstly, you must identify the property for exchange in writing, signed by you , and delivered to an independent party, i.e. a Qualified Intermediary, prior to the closing of said property. After closing, the countdown begins. First, you enter the Identification Period in which you have 45 days to identify the replacement property(ies). Secondly, you must acquire the replacement property(ies) within 180 days of closing commonly referred to as the Replacement Period. One must note that the Identification Period and Replacement Period overlap and both begin with the closing of the relinquished property. These two time periods must be strictly adhered to and are not extendable even if the 45th or 180th day falls on a weekend or holiday.

To facilitate the exchange transaction (wiki link), a Qualified Intermediary (QI) must be used. Your relationship with the QI generally begins when you identify the property for exchange. Of course, there are several rules by which you must abide when choosing a QI. The QI may not be related to you or have had a financial relationship during the two years preceding the property exchange. In other words, your current attorney, CPA or real estate agent may not act as your QI.

The Qualified Intermediary preforms three functions during the exchange. They acquire the relinquished property and transfer ownership to the buyer. The QI then holds the sale proceeds , thereby preventing you from having actually realized any funds from the sale of the relinquished property. The QI then acquires the replacement property(ies) and transfers it to you within the time limits to complete the exchange.

Interestingly enough, there are some situations where you can combine the 1031 Exchange with the Internal Revenue Code Section 121, which allows a married couple to exclude up to $500,000 of gain on the sale of their personal residence. In order to use both the 1031 Exchange and Section 121 in tandem, you must comply with all the rules in both sections, with Section 121 regulations applied to gain before applying the 1031 Exchange regulations. Revenue Procedure 2005-14 explains how the two statutes may be combined for one property.

As with any tax legislation, there are numerous rules and regulations that you must follow – more than I can possibly cover well in this article. I strongly recommend that you consult a tax attorney or CPA before deciding to embark upon a 1031 Exchange or a Section121/1031 Exchange combination. For more information on 1031 Exchange, please visit www.1031.org.