Peter Middleton

Being a first time home buyer is intimidating and a big life experience. First time home buyers often don't know where to begin. We can help. From home searches to the best places to live and school information we can give you the tools you need to move forward. One of the first steps to being a first time home buyer is to get your financial house in order and make sure your credit is good. Once pre-approved for a mortgage, the home search process (the fun part) begins. CLICK HERE TO START LOOKING

There are lots of styles of homes and neighborhoods research you'll want to explore as a first time home buyer before settling for a place and looking for homes. Search homes with an agent to help you secure a great first time home at a fair price. Once your offer is accepted be sure to check out moving resources to get quotes on movers and other tools for first time home buyers moving into a new area.

As a first time home buyer be sure to keep some things in mind before you settle down. Is the neighborhood great? Is the area appreciating? Does your home have the room you need for family growth? How is the job market in the area and how close are your favorite hot spots? Once you find the right place, unpack and enjoy! Your first time home buyer experience is now complete.

We can help in your search for your home, We will make the process of buying a home a breeze!!!

You can afford a house, WE can HELP

As you know, renting has two big problems - the rent can go up, and you don't have anything to show for it except a pile of rent receipts. Me, I like knowing that every month I'm $300 richer, no matter what. That doesn't sound like much, but if you saw 3 $100 bills lying on the ground, you'd sure as heck pick them up, wouldn't you? Owning a home is like that - Uncle Sam gives you such incredible incentives, they're just lying there on the ground, and yet some people step right over them, and never scoop them up.

In this article, I will show you in real dollars how you can benefit by owning a home. Maybe no one's ever explained it to you in detail before, or you didn't "get it". Well, if you stick with me though this discussion, I think the light will go on for you.

One of the facts of life is that if you want to have a roof over your head, you have to pay somebody for that roof. In real estate we have a saying, "Whether you rent or whether you buy, you pay for the space you occupy."

You might be thinking, "I can barely make the rent, how in the world can I afford to buy?" There's an answer to that, and I'll get to it later on. But first, let's start with why it's to your advantage to own your own home, then we'll figure out how to make it happen.

Gaining Control

Renting is being out of control - the rent can go up, or the owner can tell you that you have to move. Owning your own home is a rock of stability that can't be taken from you. It gives you a stake in the community, a sense of belonging. And for most people, it is the majority of their net worth.

Look at it this way - in 30 years, if you rented at $1000 a month, you would have paid out $360,000 and have nothing to show for it. But if you bought a home today for $360,000, at the end of 30 years you would have paid it off and you would own it free and clear.

Obviously this example is way too simple, because we all know that rents go up, so you would have paid much more than $360,000. And we all know that home prices go up too, so the house would be worth much more than $360,000. How much more? How does a million dollars sound?

The Rule Of 72

Now might be a good time to bring up the "rule of 72". This rule tells you how long it takes your money to double at a given interest rate. For example, if the interest rate were 5%, it would take 72/5, or 14.4 years for your money to double.

Did you know that home prices have gone up 7% a year on average for the last 30 years?Now I'm not talking about San Diego, I'm talking about the entire country, in good times and bad, the average was 7% a year, according to the National Association of Realtors. This means that if we see only average appreciation, home prices will double in 72/7 or 10.3 years!

Yes, in fact 20 years ago I remember them saying "We've just sold the last house under $100,000 in Escondido". And just this last week I read in the paper a similar article declaring, "Homes under $400,000 are almost extinct in Escondido."

Become A Millionaire

So how do you become a millionaire? Buy a house for $250,000 and pay it off in 20.6 years and you'll be one. How? In 10.3 years the house will be worth $500,000 and in another 10.3 years it'll be a million. Oh, you haven't paid off the loan yet? That's right, you still owe around $100,000 on it, so really you have $900,000 in equity, which is what we call the difference between what the house is worth and what you owe on it. OK, so you have another year to go, but in any event, at the end of the 22 years you'll own the house free and clear.

I know this sounds ridiculously hard to believe, but consider that 30 years ago people were buying houses here for $40,000. Then consider the Bay Area around San Francisco where small old houses, like the $400,000 Escondido ones, are going for $800,000 today. Is it so ridiculous to imagine that this area might become like that in the next 30 years? Most cities in San Diego County have no building room left, or are very close to it. After that, watch prices take off.

I mean, imagine you're on the moon, looking at the earth, looking at the USA from far above. Now imagine everyone in the USA all wanting to live in the little strip of land 10 miles from the Pacific Ocean. Got the picture? I realize not everyone wants to live here, but I want you to understand that a great many people do.

In San Diego, prices are expected to continue to rise because our population is increasing faster than we are building houses. That's the bottom line. People are coming from other states, from other countries, and we're having babies. Unless some disaster causes the number of people to decrease, home prices are expected to continue to climb.

So the question is, what do you do about it? Continue to watch? Or participate and take control of your financial future?

But I Can't Aford A Home!

Let's say you'd like to buy a home of your own, but think you can't afford to do it. I would say just the opposite - that you can't afford not to do it. Let's see if I can make it easier for you to swallow.

The government doesn't want you to pay rent your whole life and end up being dependent on the state, and so Uncle Sam is willing to subsidize your home purchase! Your mortgage interest and real estate taxes are tax-deductible. I'll explain.

Before you get your paycheck, your employer takes out the taxes, and then you get what's left to pay your rent, put gas in your car, whatever. But when you buy a house, you take your house payment out of your salary first, and then pay tax on what's left.

This is such a huge, critical, and important difference that I need to repeat it. As a renter, you're used to the idea of the government getting their share first and you living on what's left. As a homeowner, you use your salary to pay for your home first, and then let the government have a share of what's left. This is how the wealthy think. They think "how much tax do I want to pay?" not "gee, I wonder how much I'll have left after taxes are taken out." And owning your own home is a key step in starting to think like the wealthy.

Look At These Numbers!

In practice, it works like this. Let's say your family income is $80,000 and you pay $1500 in rent. If you buy a home for $400,000 with 20% down, your payment might be $2500 a month. Don't get upset about the 20% for now, just follow me here for the sake of discussion.

The $2500 comes from a home loan at 6%, real estate taxes, and insurance.

I know $2500 per month is more than $1500, but wait! $1609 of that is a tax deduction, meaning in the first full year of homeownership, you would pay taxes on an income of $60,684 instead of $80,000. Since you are in the 28% tax bracket and 9% state, you would save $7147 a year in taxes, or $595 a month!

(Disclaimer! I'm not a CPA, so I'm not qualified to give tax advice. The numbers I used assume you are already itemizing deductions on Schedule A. Consult your tax professional to see how the numbers work out on your specific tax return.)

So let's recap. Your rent was $1500, and now your mortgage payment is $2500, but Uncle Sam is giving you $595 of it! So your new cost to have that roof over your head is really $1905, $405 more than you were paying in rent. And you know what? There are special "first time home buyer" programs available so you can buy a home with below market interest rates so the numbers might even be lower.

But you say, "getting money back from Uncle Sam is great, but how can I possibly make the $2500 payment with my current take home pay?" Well, you don't have to, you can take the extra money out of your check now, and let Uncle Sam tax what's left, remember? You do this by telling your employer to take less taxes out of your check using a W-4 form. This way, you get the extra $1000 a month now to make the mortgage payment with, rather than getting a big tax refund at the end of the year!

"But I still have a big problem", you're thinking, "Where do I get the 20% down, that's $48,000!" Yes, it is. Now we get to where the rubber meets the road. You have to really want your own home, really believe that this is what you have to do for yourself or for your family.

You can of course, buy with 10% down, 5% down, or even zero down, but in those cases, your monthly housing expense will be much higher than rent, even after figuring the tax savings. If you can handle the payment, it still works out in your favor, because remember the 7% a year? That $400,000 house will be worth $428,000 next year, an increase of $28,000! So you might have to spend $500 a month more than you did in rent, but look - you paid $6000 a year more, but you gained $28,000. That's an amazing return, way better than a 401K, even a company matched 401K! If it were me, I'd put less in the stock market and buy my own home instead.

The Amazing Power Of Leverage

That reminds me of one of the best advantages to buying real estate, the benefit of leverage. As I said, if you buy a house for $400,000 in ten years it'll be worth $800,000 so you doubled your money in 10 years. By the way, this is not theory, but actual events that we have witnessed and participated in. We own many properties ourselves, and so I'm able to look back and give you the benefit of having done it.

But here's my point - you didn't have to come up with the whole $400,000 for the house, you only put 10% down. You only invested $40,000! So when your $40,000 becomes $400,000, that isn't a double, it's a ten-fold increase in your money!

More Benefits Down The Road

Oh, and there's more - once the value of your home increases, you can borrow against it and use the money for whatever you want. The money is tax-free, and the interest on this money is tax deductible. So while your renting buddies are paying 10% on their car loans with after tax money, you're deducting the interest on your car payment because you're a homeowner.

I know people who have used this method to pay for college for their kids, get the down payment to buy a second home or an investment property, or just borrowing against the house for tax-free retirement income.

And here's the best one - when you sell that $800,000 house that you paid $400,000 for, you can pocket the gain tax-free, up to $500,000 for a married couple. The money in your 401K may grow tax-deferred, but when you take out the money to spend in your retirement, you must pay taxes on it. With your personal residence that you've lived in for 2 years, you just put the gains in your pocket and pay no tax. This is incredible advantage that no other investment can offer! In fact, there are some interesting ways to retire using these tax-free gains, but that's another subject.

I challenge you to find me an investment other than real estate that gives you appreciation, leverage, tax deductions and tax-free capital gain.

Until you can do that, I think I'll keep my money in real estate.

How To Get That First House

So if you're convinced that you should own a home, how do you actually go about it? What if it's just too darn expensive in San Diego? Well, there are a number of special first time buyer programs to make it easier, and we'll definitely explore those together. But what if it's still too expensive?

In that case, "you gotta do what you gotta do". You could get a 3bedroom condo and rent out a couple of the bedrooms to roommates to help pay for it. You could buy a house out of state, rent it out, wait for it to appreciate, then sell it and use that as a down payment here. You could go where real estate is cheaper, like Hemet, to get your first house. Some people who work in San Diego County are going even further than that to get their foot in the door. I know it's hard, and it wasn't easy for me to get my first place either. You just have to grit your teeth and do it. The hardships are temporary, but the benefits last a lifetime.

My advice to you is to just go for it. Even if the first house isn't your dream house, you have to start somewhere. Face your fears and get it done. It's not just me saying this. In the book, "The Millionaire Next Door", the author says that more millionaires were made through real estate that any other method. Robert Kiyosaki in his "Rich Dad-Poor Dad" series talks about the "3 mountains" of financial security - your own business, stocks, and real estate.

Why Now Is The Perfect Time

Are you afraid house prices will collapse? With interest rates the lowest in 30 years, I think the risk is greater that the interest rates will go up, not that home prices will go down. But even if prices do go down a little, if interest rates tick up, the monthly payment on that house will be higher, even if the price is less. So your risk in trying to "pick the bottom" is that you'll miss out on today's very low interest rates. And besides, I don't believe that prices will fall in the entry-level price range, for a number of reasons that I'd be happy to share with you personally.

The next step is up to you. I'd suggest sending me an email or giving me a call and we'll see what can be done. Even if your lease isn't up yet, we should still get the ball rolling, because we may have some credit work to do, and that could take 3 months or more. If you're not ready to talk yet, but would like to be kept up to date with the real estate market, then please call and ask for our free newsletter.

Who knows what you'll accomplish once you have this big unfinished business of not owning your home out of the way? You know you need to do it - it's like a big weight holding you back until you get it done. Today's a good a day as any.

Buy your dream home with us

Memo to those wondering when the housing slump will end: It depends on where you live.

The Wall Street Journal's latest quarterly survey of housing-related data shows that the market for residential real estate is healing at varying speeds in different parts of the country. The Northern Virginia suburbs of Washington, D.C., and many areas in California that are near employment centers have shown signs of stabilizing, housing analysts say, while the outlook in other places-much of Florida, Detroit and Las Vegas-still appears bleak.

On the market in Alexandria, Va.

Thursday morning's report from the National Association of Realtors on June home sales is sure to inflame the debate on whether the housing market is bottoming, but clear answers are likely to remain elusive-partly because of the variations in performance around the nation.

In June, home sales were up sharply from the depressed year-earlier levels in Orlando, Minneapolis, Southern California and the San Francisco Bay Area, according to reports from local Realtor groups and MDA DataQuick, a research firm. But sales dropped 50% in Manhattan, according to Miller Samuel Inc., a New York-based appraisal firm. Sales also declined in Long Island, N.Y., and Charlotte, N.C., among other areas.

Where Housing Is Headed

A look at fundamental indicators in 28 major real-estate markets

A flood of foreclosed homes sold by banks over the past year has crushed prices of low- to mid-range houses down to levels that attract investors and first-time buyers in some areas, notably parts of California.

For Amy Musial, who manages a Starbucks in Sacramento buying a house became "a no-brainer" this spring once she and her husband realized that their monthly payments would be slightly lower than the rent they had been paying on a two-bedroom apartment. They paid about $229,000 for a three-bedroom house that had been through a foreclosure. Several years ago, the same house could have sold for more than $350,000, estimates Shelley Hescock, the real-estate agent who represented the Musials.

But prices of higher-end homes around the country have been slower to fall because there have been fewer foreclosure sand other forced sales of such properties. That is changing as more owners of fancy homes lose jobs, fall behind on mortgages or chop asking prices to realistic levels.

At both the high and low ends of the market, there are still plenty of reasons for caution. Rising unemployment is removing potential buyers and turning others into sellers. Credit remains tight. Appraisers have become more conservative and their estimates are causing many potential sales to fall through. Large numbers of foreclosed homes are likely to weigh on the market for at least another year or two. And a federal tax credit of as much as $8,000 for first-time home buyers ends Nov. 30.

"People are being more conservative with what they're buying," says Matthew Montgomery, a real-estate agent at Hammond Residential who works in the Boston suburbs of Newton and Brookline, Mass. In general, he adds, "the bigger the house, the harder it is to sell."

In the Washington, D.C., area, government-related employment has held up and helped revive housing demand, says Jody Kahn, an analyst at John Burns Real Estate Consulting, a research firm. "Good locations in Alexandria and Fairfax [Va.] are seeing some emerging price stability and even small increases," Ms. Kahn says, and Maryland's Montgomery County "is showing price stability." More remote suburbs will take longer to recover, she says.

In California, San Diego and Sacramento both have become much more affordable, she says. Ms. Kahn also thinks prospects are relatively good in Denver; Raleigh, N.C.; San Jose, Calif.; and the Texas cities of Austin and San Antonio-areas that generally avoided the housing bubble and so don't have as much need to adjust.

Thomas Lawler, an independent housing economist in Leesburg, Va., says areas that seem to be nearing stability include San Diego, Sacramento, Minneapolis, Boston and the Virginia suburbs of Washington.

Among metro areas that "still have a long road to recovery" are Detroit, Phoenix, Las Vegas, Miami-Fort Lauderdale and Chicago, says Ms. Kahn. Mr. Lawler includes New York, Seattle and Portland, among others, in this category. Problems in these areas include high unemployment and large numbers of vacant homes.

Of course, there are lots of variations within metro areas. The most appealing neighborhoods, offering short commutes and good schools, may vastly outperform marginal areas that thrived during the boom.

Check out homes in La Jolla & Surrounding areas!!!

La Jolla is a town offering a world class university, the surf and the sun, and a temperate climate year round. Do you want that?

Many come and wander the streets of the village of La Jolla, or go to the ocean wishing that they could enjoy the atmosphere on a day to day basis. Others stay, buy a home in La Jolla and never leave ...

La Jolla is the most famous neighborhood in San Diego. It is home to UCSD, the University of California, San Diego. Rising abruptly from the coast, La Jolla has many large expensive view homes. That's not the whole town, though.Along with some apartments, there are many modest homes that are well maintained and have good views of the ocean.
Descending the hills to the coast of California, you are at once taken by the beautiful variety of trees, such as eucalyptus, pine, palm and plant life adorning the seascape hillsides.

The roads wind their way past diverse networks of La Jolla homes, many of which appear at first unassuming but with the views of the Pacific Ocean their values increase immensely and make for a very relaxing place to call home in La Jolla.

The Village of La Jolla is by the coast and has coffee shops, galleries, antique shops, boutiques and restaurants. La Jolla even has a branch of the Hard Rock Cafe.

Business here is dominated by the University and tourism. Along Torrey Pines Road at the northern end of the zip code boundary, there are a series of office-research buildings with prominent pharmaceutical and business names that attract people to work here.

There is a reason why the Robb Report, in 2002, declared La Jolla to be the best place in the United States to live. Want to have some fun?

There is a magic when a hill meets the water. Natural beauty is everywhere. The climate in La Jolla is the best in the United States, the vegetation abounds and views are spectacular.

Thinking about selling your home???

Are you looking to increase the value of your home while staying within your budget? Full remodels, even for one room, can cost many thousands of dollars, and while the cost may be worth it if you're planning on staying put, most remodeling projects increase your home's value by at most 80 or 90 cents for every dollar you invest. Thus, if you're looking to sell your home right away, or if you're buying and selling a home for profit, you want to keep your improvements simple and cheap. Here's how.

1. Spruce up the yard. Get rid of trash and yard waste. Keep your lawn in good condition and mow it. This includes using a weed whacker to get in the tight corners and along the edges of sidewalks and the house. Trim the hedges, get rid of weeds, and mulch the flower beds. If you don't have much to work with, plant some flowers or install some landscaping appropriate for your home and climate.
2. Eliminate clutter inside the home. If you're going to be showing the house to potential buyers, get the house organized and get rid of clutter or put it in storage. A nice, tidy house will seem larger and more elegant.
3. Wash walls and windows. It's a lot cheaper to wash walls or siding than to repaint or replace siding, and many times a good cleaning will make your home's finishes look good as new. Pressure-wash your home's exterior, and wash interior walls. Clean your windows so that you can't tell they're there.
4. Add a fresh coat of interior paint. Sometimes you just really need to repaint, but you can do it yourself relatively cheaply on interior walls. First, patch up any holes, no matter how small. To get a silky smooth finish, apply a coat of primer. After the primer dries, lightly sand it with a fine grit sandpaper (220 grit). Apply the first coat of latex paint, and then lightly sand that layer also. Wipe the walls down with a damp cloth after each sanding session. Then apply the final coat of latex paint.
5. Put up fresh curtains and blinds. Blinds and curtains are relativly inexpensive. Over time, the sun fades the colors from your blinds and curtains, so new ones will make a better impression than old ones.
6. Clean up the carpet. You can shampoo or steam clean your carpets, or you can use a dry cleaning system (available from various sources, such as Oreck), which requires no water or steamer rentals, and which dries instantly and kills virtually all mold and bacteria. Apply according to the manufacturer's instructions, and then vacuum. If all else fails, get a professional to do the carpets for you. You'd be surprised how much better your carpet will look after a good cleaning.
7. Install modern light switches and outlets. Some of the new style switches can be easily installed using the wires already running to the old switches. Just be sure to turn off the power to the room or entire house before doing any work. The new outlets look nice, and give the impression that the electrical wiring in the house is newer than it really is. Dimmer switches are especially desirable, although this can be illegal if the outlets are of three prong type while the wiring is two prong. It also could lead to trouble if the buyer's home inspectors catches on.
8. Refinish kitchen cabinets. Outdated or worn cabinets can bring the whole kitchen down, but refinishing them is relatively cheap and easy to do. If you have a dark or small kitchen, make it look larger and brighter by using a lighter finish on the cabinets.
9. Up the wattage of your light bulbs to make things even brighter. Just make sure you don't exceed the maximum specification for lamps and other lights. (You could use compact florescent light bulbs in order to make the room brighter without getting new fixtures, plus they save electricity meaning they save you money.)
10. Get a professional floor plan company to check on your home's square footage, which is sometimes higher what your county assessor has recorded. Because homes sell for hundreds of dollars per square foot, even a small increase will more than pay for the service (typically a few hundred dollars). You'll be able to list your home for more money, but at the same price per square foot.
11. Wood Trim and Cornicing are a cheap and easy do it yourself idea that can add tons of "WOW" factor to the look of your home. Simple ceiling trim and armchair railing are the easiest and most typical upgrades found in newer homes. To make an even bolder statement, paint the walls a neutral, flat color and paint the trim a high gloss white.

Tips

• Improve the things people can see. Getting rid of highly visible eyesores will add the most value per dollar to your home.
• Remember the senses. Put out fresh flowers for your open house; they make even the most dungeon-like house look inviting. Bake some oatmeal or chocolate chip cookies--they invoke good thoughts for most people. Then leave them out for visitors. If you don't have time to bake, burn a candle or use potpourri. Use smell sparingly; some people are more sensitive than others. Consider playing some very soft classical music in the background.
• Consider turning on all the lights when the real estate agent arrives with potential buyers. On the one hand, this will help to brighten up your house. On the other hand, lights on in the daytime is a huge "red flag" for some buyers. Either way, it will make a lasting first impression.
• Do it yourself when possible. If you know what you're doing, a little elbow grease can add a lot of value.
• As a last resort, consider flooring options. If your carpet is in really bad condition, you can replace it, or you can restore the original hardwood floor. Hardwood floors are very popular right now, and in a lot of cases old houses have nice hardwood flooring underneath the carpet. Rip up a bit of carpet in a closet or other inconspicuous area to check the floor's condition, and compare the price of restoring the hardwood to that of installing new carpet.
• Don't be afraid to spend a couple of extra dollars on good paint rollers. Those 5- for- $10 rollers will make your walls look blotchy.
• Paint with a neutral color such as beige. It will make the house seem larger, and it will be inoffensive to buyers.
• Semi-gloss paint will make your walls seem brighter. If your walls have imperfections, such as dents in the drywall or cracks in the plaster, consider using flat paint to hide those imperfections. Keep in mind that flat paint shows dirt easily and is difficult to clean, so leave it until just before your open house!
• Install ceiling fans. If you live in an area where warm weather is common, replacing built in ceiling lights with ceiling fans will improve the form and function of your home. You can find ceiling fans at a "big box" retailer or at your local hardware store with lighting for as little as 20.00 a fan
• Use floor and table lamps in every room and sheer curtains to make your open house more inviting. Lamps give a softer light, and the curtains let in sunlight, which makes the room more home-like and less clinical. You can pick up decent stuff from garage sales if you don't have any.
• Check the main circuit breaker panel to see if the kitchen, bathroom and garage circuits are protected by GFI breakers. If not, install GFI outlets in those locations. local laws can vary. Some cities/counties do not require GFI receptacles. A GFI is usually only needed within a certain amount of feet within a water source. GFI outlets are $11.00+, minus the cost of the wall plate. They are expensive, but sometimes mandatory. If there are multiple outlets on one circuit, only the outlet that supplies power to the rest of the outlets/room needs to be GFI protected.
• Clean, clean, clean. Nothing improves the value more for so little of an investment than a good cleaning. Houses that look and smell clean have great market appeal. Even an older house with older appliances will fare well if everything is sparkling clean!
• You may wish to consult with a state licensed appraiser before doing any remodeling. An appraiser can give you valuable insight into what your market area can and cannot support.