Don King

Everyone has their own idea of what they want in a home. You need to buy a place in which you and your family will be comfortable.

On the other hand, you probably won't be in the house or condo forever and, when the time comes to sell, it would be nice to learn you made a sound financial investment.

Here are some thoughts about purchasing a property that will likely appreciate in value over the years.

There are some really unique homes out there. Custom houses or tract houses that have been severely customized can be very dramatic and appealing. Just keep in mind that a home with mass appeal will generally increase in value more that a property that will attract only a few buyers.

If you are buying a detached home, you would be wise to select one with at least three bedrooms. Two bedroom houses have limited appeal unless they are in a senior area. Condos with two bedrooms are much more popular than one-bedroom units.

A detached home will generally appreciate in value faster than a condo. Even though a detached home is more expensive, most buyers appreciate the privacy and lower homeowner dues. The exception is a detached "manufactured home" which will not usually hold its value very well.

Remember the old adage of "Location, Location, Location". A desirable school district (such as Poway Unified) will attract more buyers and thus increase value. Also, being in a quiet, safe area is a fine idea.

Finally, according to the National Association of Home Builders, here are the top kitchen and bathroom features sought by home buyers.

Kitchen: 1) Walk-in pantry; 2) Kitchen island; 3) Built-in microwave; 4) Water filtration system: and 5) Storage area for appliances.

Bathroom: 1) Linen closet; 2) Exhaust fan; 3) Shower separate from a tub; 4) Water temperature controls; and 5) Whirlpool tub.

So, when you buy a home, choose one you love but just remember that you may want to sell it someday.

Floods in a home are more common than you might think. They can result from a leaky roof, broken water pipe, or malfunctioning dishwasher.

If you have a flood, it is imperative that you take immediate action. Just mopping up the water won't hack it.

Left unattended, water can result in mold and possibly ruined cabinetry. Professional flood abatement includes the use of heat and fans to thoroughly dry all areas.

As soon as you notice a flood, contact your homeowner insurance. In most cases your policy should cover the cost of repairs, less any deductible.

Beware that some insurance companies will pressure you to use their restoration contractor. This is a potential conflict of interest - you want to make sure the job is done right and the insurance company wants the issue resolved as cheaply as possible.

Know your rights. The California Fair Claims Settlement and Practices Regulations allow homeowners to hire the contractor of their choice rather than just settle for the once the insurance company pushes.

The bottom line is a flooded home is a serious situation and it is imperative that you take action to resolve the situation and avoid future problems.

I have recently spoken with several people who were not at all familiar with the current laws regarding capital gains taxes when you sell real estate.

So, even though the current laws have been in place for a number of years, I think it is worthwhile to review them.

First, let me emphasize that I am not a tax professional. I'm just telling you how I believe the tax system works from the standpoint of a real estate broker. Before you make any decision regarding buying or selling real estate, I recommend you talk with your tax attorney or CPA.

When you sell a house or condo, if you have lived in your property for two consecutive years out of the past five, you may exclude $250,000 in profit from capital gains as a single person or $500,000 as a married couple.

So, if the property has been your personal residence, you may not owe any capital gains taxes at all.

Many people were familiar with the previous tax laws, where you had to roll your gains into another property of equal or greater value. That no longer applies. You don't even have to purchase another home.

There also used to be a one-time capital gains tax exclusion of up to $125,000 for sellers over the age of 55. This law is also gone but, with the new law, you don't need it.

If you lived in the property for less than two years, you may still be able to exclude a prorated amount of profit from capital gains taxes, depending upon the reason for your move. If you are transferred to a job more than 50 miles away; have to move for health reasons; or have unexpected circumstances such as multiple child births, divorce, or death in the family, check with your tax professional.

If you are selling a property that was not your personal residence, you face a decision. You can sell and pay capital gains taxes (currently the rate is 15%) or you can execute a 1031 tax deferred exchange to roll the profit into another investment property.

If you plan to sell an investment property in the Rancho Bernardo area, I can hook you up with a very good escrow officer who has extensive 1031 exchange experience and can make the transaction go much smoother.

I hope this answers any questions you may have regarding capital gains taxes. If not, please call me at 858-487-2308.

So you want to buy a brand new home. Should you work with an agent or just walk into the builder's sales office and check out the model homes?

Builders are affected by this "buyer's market" just like other homeowners. So they are offering incentives to attract buyers.

One incentive is a commission to real estate agents who bring prospective buyers to the sales office. If an agent accompanies you on your first trip to visit the models, most builders will pay the agent and you can benefit from the agent's professional advice.

So, what can an agent do for you when you purchase new builder construction?

First you need to know that the agent's role will be less than if you bought a resale home. When you buy a resale, your agent will represent you throughout the entire purchase. The services an agent can provide for new construction are limited but still valuable.

A recent survey by J.D. Power and Associates revealed that builders will now give a buyer an average of $16,500 in incentives. These incentives can come as a reduction in the base price of the home or free upgrades. An experienced agent can help you get maximum incentives.

In addition, your agent can offer advice on your purchase such as insisting upon the right to a professional home inspection, a function most builders will insist you don't need.

If your are considering new construction in the Inland North County portion of San Diego, it would be my pleasure to help you and, assuming the builder is cooperating with brokers, my service will be free.

You have probably heard the terms "seller's market" and "buyer's market". But what do they mean?

Real estate values go up and down, depending upon supply and demand. Obviously, the quantity of homes for sale is the supply and ready, willing, and able buyers provide demand.

Simply put, a seller's market is when there are more willing and able buyers who wish to purchase a home than there are homeowners who are willing to sell. This puts the seller in the driver's seat - they can demand higher and higher prices and offer fewer terms. The result when demand exceeds supply is rising home prices.

Now we are in a buyer's market. There are more homes on the market than there are ready, willing, and able home buyers. This means not all homes on the market will sell and owners who really need to sell are motivated. Supply exceeding demand means lower prices.

So, if you were a potential buyer, would you rather purchase a home in a seller's market or a buyer's market? The obvious answer seems to be that buyers would rather purchase in a buyer's market. So why don't they?

A funny contradiction in real estate is that buyers tend to leap into the purchase process in a seller's market and not in a buyer's market. Why? The simple answer is they are motivated by greed or fear.

During a seller's market, greed kicks in. Buyers see home values rising quickly. They think they can buy a house and watch the value go up and up. This is the time buyers should be cautious because the market is nearing the top. But instead they charge into the market to get on the gravy train.

On the other hand, during a buyer's market, buyers see house prices declining. This should be the time they enter the market to take advantage of the large selection of homes, bargain prices, and motivated sellers.

However, they are afraid. If the market continues to decline, the property they buy might drop in value. So they sit on the sidelines until the market has already turned around and prices start rising rapidly in the next seller's market.

Buyers would be wise to buy during a buyer's market. In fact, when enough buyers jump into the market, that increased demand is what initiates the next seller's market.

In Southern California, we have been in the current buyer's market for three and a half years. If you are a prospective home buyer and hope to take advantage of the buyer's market, you should take action soon.