AboutConnie Wildasinn-Broker,Realtor® Expertise Broker, Realtor®, Investor since 1979. Buying or Selling Residential and Income/Investment Properties, How to understand the process, how to negotiate through the transaction, What to Look for - But more importantly 'What to lookout for!', How to tell if the time is right - or hold on and wait. Why not to listen to your friends and even your family members, Who really has your best interst at heart?. Understand why any market is a good market and how to spot a good investment for you!
Experience 4th generation realtor in the real estate business, I have over 2 decades of helping clients buy and sell, I am the owner of a local brokerage in the Los Angeles/Long Beach area, and have been a top producing agent in the area since I became licensed. Working through a deal is different to every client, no two people or deals are exactly the same. Knowing how to bring professional advise to the table with clear and concise understanding of real estate world. I can help you handle your buying, selling and investing, managing a 1031 Exchange, working with Equity Sales, Probate, Pre-Foreclosure Regular and Short Sales there is little that I have not seen come across my desk over the decades!
Organizations NAR
CAR
WCR
ABR
e-Pro
BKBIA
CHNA
Publications Broker Agent Magazine
Long Beach Business Journal
Long Beach Press Telegram
Signal Hill Tribune
Grunion Gazette
All Experts
Zillow - Lead Agent
Education/Credentials Broker-owner
Realtor®
Awards and Honors Opened up Independant Brokerage WGA in 2006, currently employ 30 Realtors and growing.
10 years running top selling agent in Long Beach, South Bay area California.
Top Producer 5 years straight Re/Max, C21, Realtyworld.
Question I’m new to home buying. I am currently just renting a room in a house right now, but I would eventually like to own a home. Well I have been thinking about it and wanted to see exactly how profitable it is to lets say buy a condo and then sell it. So here’s the situation I’m gonna give you so that I get a better understanding of how profitable it really is to buy, then sell later on.
Lets say that there is a condo for $200k. Lets say that I can pay all that in full (I am going with a condo example here b/c realistically, it is the only “home” that is priced low enough where it can be paid in full). Lets say a couple of years down the road, the condo is now worth 250k. So the basic math says that I profited 50k, which however is UNTRUE.
So, from this 50k, what kind of “items” do I deduct from that before I get to the bottomline profit that I get to keep in my pocket? So I know for sure that when I sell my condo, the realtor will get a cut/%, but what is the typical percentage that he/she gets from helping me sell the condo? Also, I know that during the 2 yrs (even though the condo was paid in full, therefore, I owe zero in the mortgage interest), I’d be paying 2 yrs worth of utilities, property tax, etc.. .But can you help me break it down into line items what costs will be deducted from that 50k “profit”? So in other words, how much $ is the realtor’s cut? Approximately how much would the property tax be/utilities/I’m sure there are other expenses but not sure what they are. So if you can help me break it down.
Thanks for your time.
Answer Hi Pan... congratulations on wanting to own real estate, I feel for the long run, real estate is a wonderful tool to build wealth, but as you can also see... the market will make corrections as we are in semi free fall depending on where you live, but no matter ... every home in the United States has lost value from its previous highs... now much is a matter of question...
You are correct that if your property appreciated $50,000 all of that would not be pure profit... you have commissions from 4-5-6-10% depending on where you live and what the market place is doing at the time of sale... and closing costs associated with the seller... ie escrow (if you live in an escrow state) attorney fees (if in those states) City, Country, Tax Recording, Stamp Transfer fees, Home Warranty, Termite, HOA Transfer Fees, CCR copy fees, Wire Fees, Natural Hazard disclosures, City retro-fits, etc... on a typical sale, I calculate at 7.1% off the sales price and that is typically all inclusive of the closing fees... to a seller.. the buyer will have closing fees incurred also...
Our Realtor® fees are commissions, not 'Cut' of the deal... any partner you have would have a Cut... we has associated fees to doing business, keeping the clients legal, marketing, administrative and fiduciary for up to 7 years excluding fraud, lifetime... we earn our fees..
When you are investing, and this is a home you will live in... so it no a typical investment... the 'Living Expenses' you would have incurred those regardless of where you live, so that is not counted off the gross profits... HOA's partical are again things you simply would be paying regardless... ie water, electrical, home insurance.. those are not deductible..
But most important to keep in mind... I don't recommend you to buy a $200,000 property thinking that in 2 years you will have that much profit... we will when we are out of this downward spin, return to a normal gains phase of most likely 6-8% per year.. don't count on double digit appreciation in our life time again... unless of course the market place explodes with something to cause that to happen... I full anticipate the government to rescind many of the profit centers many homeowner and investors have learned to love over the coming years as we pull out of the recession...
Speak with a local realtor you can trust, get references, and do you own homework... then do what you feel is best for you situation...
Only you can and should make the final decision... Good luck!
