We all know that Orange County real estate is desirable, offering tons of luxury home markets, great year round weather and laid back suburban life just a short commute from big cities and fun. If you are thinking of buying a home in Orange County, these are some important tips and tricks to be aware of.
1. Mello-Roos Taxes
What is Mello-Roos you ask? Back in 1978, California passed Proposition 13 which limited property taxation and so in 1982 the State Legislature got creative and passed Mello-Roos taxes to help raise money for developing communities. These taxes are levied as part of the annual property tax bill and paid each month to pay back bonds taken out by a city or county. The bonds taken out by a city or county are for construction and improvements such as building roads, supporting schools or developing infrastructure.
Some home buyers are terrified of Mello-Roos, but there’s no need to panic when you see this pop up in a home sale. Listen to the facts and realize there are more than a few advantages to buying a home with Mello-Roos. First of all, Mello-Roos bonds do not last forever; the payment can extend anywhere from 30- 7 years when the bond is first taken out and depending on how long ago the bonds were taken out, a particular home may only owe for another few months or so. Also, communities with Mello-Roos are great family friendly cities because they are supported and maintained by these taxes. They have greater housing inventory, low crime rates, top-notch amenities like clubhouses and parks and of course highly desirable new schools.
Mello-Roos is commonly found in newer South Orange County communities like Irvine, Mission Viejo, Laguna Hills, Aliso Viejo and Coto De Caza.
2. Leased Land in Orange County
Some homes in Orange County are build on leased land so when you buy a house, you own the structure and not the land underneath it. This is most common in Huntington Beach and other coastal real estate. You may come across this if you see a luxury home listed for a steal. It looks like a great deal but in fact you will be paying more in the long run because you will have to pay a lease every month for the land. Benefits of buying a home on leased land include a cheaper home price in an amazing location and lower property taxes.
Things to consider when you purchase a house on leased land include what will happen when the lease on the land runs out. A lease that exceeds the amount of time you plan to stay in the home and your mortgage loan is ideal. If the length of the lease remaining is shorter than the time you plan to stay, then you need to find out what happens to your interest in the property when the lease ends. Study the “surrender clause” to find out what happens to you and the home when the lease runs out. Buying leased land isn’t a bad thing; you just have to know the facts are so you can plan for the future.
3. Home Longevity
Wind, rain, hail and snow can take a toll on your house and none of those are a worry in Orange County. Because homes in Orange County don’t have to stand up to these extreme weather conditions, they last longer and hold their value longer. Exterior paint lasts longer, there’s little need to worry about storm proofing your home and standard insulation is sufficient.
Orange County homes will also save you money because you won’t be replacing appliances and repairing your home for winter months. A new hot water heater can cost up to $800 and reroofing will set you back over well over $1,000 after materials and labor costs. Heating and cooling costs in Orange County are also easy to keep down because our weather rarely spikes up higher than 85°or dips lower than 60°.
4. Escrow
In California you don’t deal with a closing attorney, you work with a licensed escrow agent or company. An escrow is opened when a buyer and seller sign a sales contract and a home purchase begins. During escrow, a neutral third party assures that the lender releases the home purchase funds at the same time the deed is officially recorded to reflect new ownership. By using a third party escrow company or agent, everything is reviewed and put in order so the process goes smoothly. For anything and everything you want to know about the escrow process in Orange County, consult the official California Department of Real Estate informational survival guide.
5. Orange County has a rich history
There are plenty of fun facts and stories for our county to tell. One includes our part in the California Mission history which residents and visitors can see today in San Juan Capistrano. Back in 1775 Mission San Juan Capistrano was founded by Father Lausen, a Catholic Spanish priest sent to bring the European and Christianity to the natives. The Mission was a hub for the farming and agriculture, new technology and a centralized community of native Californians. Today the Mission and architecture have been preserved making the few square blocks of San Juan Capistrano’s downtown village a true history of western small town life. The town showcases historic buildings, a museum and eclectic shops to explore for a walk through history with an urban twist in the OC.
Another fun fact about Orange County’s history includes the humble beginnings of our priciest luxury real estate markets. Back in 1906 a Newport bay-front home cost as little as $500! In fact, the Balboa Pier was erected to attract buyers because the city was so unpopular. Today, Newport Beach is the second most expensive luxury market in Orange County with an average home listing price of $2,865,000. Nearly all luxury home markets in Orange County with an average listing price tag over $1M are beach cities like Laguna Beach, San Clemente and Dana Point with beach front properties priced upwards of $10M.
Balboa Island, 1921. Courtesy of the Los Angeles Public Library’s Photo Collection
Now that you know all the ins and outs of Orange County real estate, you’re ready to jump into the market. The best way to check out the best Orange County homes for sale is by making an appointment with us at Elite So Cal Homes. Call or email us today and we’ll help you in the home buying or selling process.