I value your feedback on my articles as well as the questions.
There are many topics to discuss today in real estate, but I would like to take a moment to answer a few of your questions. Please be sure to consult with a professional for any legal or tax-related questions.
Cassandra of St. Helena, asks, “It seems like Congress is close to approving a new tax bill. I own a $2 million home and have a payment of around $7,200 a month and annual property taxes of $21,000.
How will I be affected?”
You will be limited to a maximum of $10,000 in a deduction for property taxes.
Your mortgage interest deduction will be limited to the interest on the first $500,000 loan amount, but this will depend on when you obtain your mortgage. A refinance may be treated differently.
Jackie of Napa, asks, “How much does it cost to have an agent represent me in searching for a property to lease?”
The property owner usually pays commissions.
A broker representing a lessee would receive their commission from the listing broker.
The listing broker who represents the property owner would receive the total commission according to their listing agreement. The listing broker would then split the commission with the broker bringing in the lessee.
Raj of American Canyon, asks, “What is a first-right-of-offer in a commercial lease and how does this differ from a first-right-of-refusal?
A first-right-of-offer gives the lessee the right to make the first offer on the property leased if and when the lessor informs the lessee he or she is considering selling.
The lessor has the right to reject the offer and then usually after a waiting period place the property on the market for sale without involving the lessee any further.
A first-right-of-refusal places the lessee in the driver’s seat as the lessor would first market the property for sale, obtain offers and negotiate the best deal.
The lessor would then present the highest and best offer to the lessee who would retain the right to match the offer and purchase the property.
Justin from Vallejo, asks, “What stage are we in in the real estate cycle?”
Real estate markets are local, so the cycle in the Vallejo/Fairfield metropolitan area may be at one point different from another area. Cycles can also differ based on property class.
Many who follow trends in real estate feel we are at the top of the cycle with values at the highest level we will see in our current cycle.
It is difficult to forecast, but history shows a cycle every seven to 18 years. So, if you are considering selling within the next five years today may be a good time.
I always look forward to your questions and will do my best to answer in my column or directly.
Please email me your questions at email@example.com.