New Tenant and Landlord Law Effective January 1, 2013

Starting January 1, 2013, it is a landlord's obligation to disclose to a prospective tenant if the property to be leased is in foreclosure. "Foreclosure" starts when a Notice of Default is recorded against the property.

 

This disclosure must be made before executing a lease agreement. If a landlord violates this law, the tenant can elect to void the lease and recover one month’s rent or twice the amount of actual damages, whichever is greater, plus all prepaid rent. If the lease is not voided and the foreclosure sale has not occurred, the tenant may deduct one month’s rent from future amounts owed. The written disclosure notice as provided by statute must be in English, Spanish, Chinese, Tagalog, Vietnamese, and Korean.

It is recommended that tenants seek the advice of an attorney if they encounter such a situation.

4 Seller Mistakes Nobody Talks About

1. Whether it's a short sale or a so-called standard sale, sellers PLEASE DO NOT TURN OFF THE UTILITIES AT THE PROPERTY after you move out. The agent needs them on to show, and the buyer will need them on to do inspections. If the house is vacant, nobody is using water and electricity, so sellers, JUST DO IT. Keep it on!


2. Avoid scheduling movers until contingencies are released and the buyer's funds will be forfeited if the deal falls through. Delays with closing dates are known to happen. If CLOSING on your deal is a MUST in order for you to move, sellers must be double careful. An experienced agent will not lead you down that road


3. There is a Murphy bed in the home you are selling. We all know a murphy bed is a piece of furniture and furniture is not included, right? Except the Murphy bed is affixed to the wall and the floor, in theory making it part of the house! If the listing agent is not clever enough to give the seller guidance on how to handle this situation ahead of time, the seller should bring it up BEFORE THE CLOSE. This situation happened and the listing agent (not Sylvia Jonathan) NEVER DISCUSSED IT WITH THE SELLER.


4. The house is in escrow. It's vacant now, 30 days to close. Sellers, do not stop the gardening service or stop watering the landscape. The sale is as-is, but that means "as-is" as of date of sale not the date you move out. Sellers, maintain the home as it was when you had it for sale.

Gifting of Real Estate and Quick Claims

This excerpt is from Duan Gomer's curriculim for real estate agents. It describes exactly what I have encountered time and again as a REALTOR when speaking to my clients:

My teaching experience has taught me that most taxpayers don't understand the problems and possible penalties of gifting real estate that has been held by one party for a long period of time. Normally, when property is gifted, there is one phrase that you should recite, "Basis follows a gift."

Let's assume that a widowed mother is ill in the hospital. She owns a home that she bought many years ago for $30,000 and over the years, the basis has grown to $350,000. Fair market value is a legitimate $700,000. She doesn't have many other assets. There are two children and she intends to leave all of her assets to them.

If the children receive the property after her death, the basis of the property is the fair market value at the time of her death or the later alternate valuation date if one is used for estate tax purposes. If the children receive the property and sell it the next day for a net price of $200,000, there is no income tax to be paid. This great benefit is called "Full Step-up of Basis".

However, if one child convinces the mother to "gift" them the property before she dies, the basis for the children would be $350,000. When they sell the property soon after for a $700,000 net price, they would have to pay a capital gains tax on $350,000. All because they couldn't wait.

This problem arises whenever a person "gifts" a property to someone, and the basis is much lower than the Fair Market Value. If I bought a home and then gifted it to someone immediately, their basis would be the same as mine. Since I just purchased the property, there is no difference between Basis and Fair Market Value.

Get tax advice on how you should hold title and how a survivor should react later. Wills, trusts, health care directives, final intention, etc. should all be evaluated. So many people are always a day late and a dollar short. You don't have to pay an arm or a leg for these services but if you don't do them, remember, "Those who dance must pay the fiddler."

Pasted from <http://exams.duanegomer.net/new/swc3a.asp>

Zillow - Valuation Source for the Uninformed

We are in the age of Do-It-Yourself efforts. Works great in some areas and activities, not so much in others. You can buy a hair trimming kit and cut your own or others' hair, with varying degrees of success. You can wax your own legs. You can build your own birdhouse, or even a Japanese beetle trap (I am told). You can watch the New Yankee Workshop and build something useful for your home if you have highly sophisticated machinery and nimble hands. If you get it wrong, you might waste a few hundred dollars of lumber…

Buying or selling a home is not a do-it-yourself job, just as pulling your own tooth or removing your appendix is not. I know you doctors and dentists are cringing at this point. I mention the latter two pieces of professional work to make it obvious to the individuals who might be the most self-assured. Some things are best left to professionals.

[caption id="attachment_1803" align="aligncenter" width="300"] July 2012 Zestimate and Actual Sale[/caption]

In my career as Realtor in Orange County I have come across many a home buyer who readily pulls out Zillow's Zestimate and tries to justify his or her opinion of market value for a home when writing an offer. Funny enough, they never write offers based on Zillow's HIGH Zestimate, only the posted lowball values! Sadly, I have had more than one buyer lose a good house because a friend or relative second-guessed a solid market analysis and the proposed offer price.Hey, they argue, Zillow Zestimate says it is worth 25,000 less.

I decided to do my own research of Zillow Zestimate accuracy, because for some buyers, if I tell them Zillow is wrong, they don't believe until they see it, and that is usually  after the closed sale to another buyer. I have accumulated Listing, Zestimate and SOLD data over the period of about five weeks during July/August 2012  for the city of Irvine. It's a small sample, but I venture to state that in Orange County, it is a representation of what the facts are. The variance of Zestimates vs. actual Sales Prices runs from Zestimate undervalued by -21.25% to overvalued by +35.16%. How would you like to be the buyer who assumes a home is worth 35% more than what it will sell for? On the flip side of the coin, picture the buyer who writes an offer based on the perception of the more than 20% lowball Zestimate, only to be beaten by the realistic and savvy home buyer who lets his real estate agent guide him in the actual market situation. I know that Zestimates are generated by a computer who has no idea of location, condition and upgrades. Zillow properly inserts a disclaimer that the Zestimate is not an appraisal. Of course, consumers take away the tidbit that justifies their preferred position, no fault of Zillow. Zillow will continue to post Zestimates; it's what brings visitors to its site and generates income through auxiliary services. The wild numbers are of some entertainment value and occasional annoyance to real estate agents but also a source of confusion for home buyers. In a changing market, whether it's going up or down, having up-to-date real-life information is crucial. When you want to buy a home in Irvine and greater Orange County, you might want to hire a live real estate agent and listen to the market analysis she offers.

For copies of the actual analysis spreadshett, please contact me via phone or email.

[caption id="attachment_1778" align="aligncenter" width="300"] Real Estate Matchmaker[/caption]

 

 

Spotlight on Sylvia - Ask A Realtor

[caption id="attachment_1796" align="aligncenter" width="238"] Sylvia Jonathan with Cairn terrier Louie[/caption]

The latest interview in our series spotlighting the Realtors who answer the  questions in the Ask A Realtor  section is Sylvia Jonathan of Irvine, California. Sylvia takes pleasure in  helping buyers realize their dream of home ownership, diligently searching for  the right property. Her services for sellers are geared towards helping to  prepare their property for sale and marketing it for the best possible sales  price so the sellers can move on.
Read more: Ask A Realtor Spotlight: Sylvia Jonathan | REALTOR.com® Blogs