Archive for the ‘CA’ Category

Possible End to Housing Shortage in CA?

Tuesday, March 27th, 2018

There is a new voter measure that could put an end to the housing shortage in California if placed on the November voting ballot and passed. The proposition would allow homeowners 55 and older to reap tax benefits upon selling their homes by eliminating the “disincentive” to sell, and making it possible to move to other California counties while taking the tax benefits with them.

Here is how the proposal would work: older homeowners who want to sell their larger homes and downsize would be able to do so, while being allowed to move from any county in CA to another without a big tax hit, so long as the new property value is the same or less than the home they are selling.

This may sound familiar to you – it draws on the premise of Proposition 13, and this new measure would allow the sellers to retain their benefits under that law. Currently many would be downsizers have elected to stay in their larger homes in order to prevent higher tax liability by losing their Prop 13 status upon selling.

Prop 13 allows property taxes to be capped at 1% of the purchase value of the property, and they are normally limited to 2% annual increases so long as the homeowners stay in the home. Sale of the home results in a reassessment of the property value for the new purchasers – thus the reason many would-be sellers have decided to stay put.

Currently, homeowners who want to downsize and move to different counties, say to be closer to family or save money on living expenses, may opt NOT to sell for the reasons above. This creates a problem for current homebuyers, as inventory remains very low. This drives up prices and encourages multiple offer situations – not good news for buyers as they may get priced out of markets, especially with interest rates and prices increasing simultaneously.

Both the California Association of Realtors and California Chamber of Commerce support this measure, as it is seen as one way to ease the housing problem in the state by increasing availability of “modest-priced homes and move up housing for young families.” Many counties in California oppose these inter-county tax transfers, as they could reduce revenues collected in property taxes upon the sale of homes.

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California Real Estate is Heating Up

Wednesday, November 4th, 2015

CaliforniaHomeSales

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Get Ready for A California Foreclosure Wave

Tuesday, February 24th, 2015

There is a big wave coming to Southern California and it will not be found in the ocean. Foreclosures have hit their highest level in two years and should begin to affect real estate inventory soon, at least for a short period of time.dreamstime_5042227

According to new data released this month by RealtyTrac, one of the largest real estate data firms, the number of homes repossessed by banks in California in December reached the highest levels since December 2012 – nearly triple.

California’s Homeowner Bill of Rights, which is about a year old, has prolonged the foreclosure process for banks, who must now abide by the many protections provided homeowners under the bill, and now that the banks have had time to adjust to the new rules they are going after repossessions.

Notices of default, the first indication that a home is about to enter the foreclosure process, are currently at the same level they have been for the last six months, but will soon rise if all indications are correct.

Real estate agents and homebuyers will soon start to see more foreclosures and short sales popping up, just in time for the Spring selling season. But keep in mind that these sales are not the bargains they once were – even though banks want these properties off their books, they want to sell the homes for value as well. (click here for more information on the changing value of short sales).

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Updated California Residential Purchase Agreement Coming Soon

Tuesday, September 16th, 2014

If you are a real estate agent in California you may have heard that there will  be a new Residential Purchase Agreement (RPA) on November 24, 2014. What does this mean to agents? First of all, it means you will need to learn how the new contract will affect your sales. Since many agents don’t bother to ready through the RPA on a regular basis, this is a chance to start off fresh and really understand how the document works and protects your buyers and sellers. http://www.dreamstime.com/-image9839542

Here are some of the highlights of the new RPA.

1.  Extended buyer contingency period. The standard contingency period of 17 days will be extended to 21 days. This offers more protection for the buyer, but may have the sellers biting their nails for 4 extra days. Nevertheless, it gives the lender more time to secure the loan and provides better peace of mind for all in that respect.

2.  Loan and appraisal contingencies will be separate. The current contract ties the two together, so that removal of one means removal of the other. The new RPA will separate these two contingencies, such that the buyer will still have an “out” if the home does not appraise or if the loan is denied, even if the other contingency had been removed. However, the seller is protected as well, in cases where buyers have waived or removed the appraisal contingency, as they cannot back out if the home does not appraise.

3.  Buyer direct deposit added to initial deposit field. There will now be a check box allowing the buyer to select to send their initial deposit to escrow via direct deposit.

4.  All cash offer added to first page. The “all cash offer” check box has been added under Finance Terms in section 3 on page one.

5.  Broker scope of duty. An entire paragraph has been added (section 18 B) that outlines the broker’s scope of duty in regards to the contract – what the broker is and is not liable for in relation to the contract. This provides more protection for brokers.

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It is important to take a class to understand all the changes to the RPA so that you are prepared and know the legal ramifications. Most local associations are offering free classes, so check with yours and sign up. As with all legal documents, changes usually offer further protection to the parties involved in signing them, so make sure you are able to best represent your clients and stay educated!

For a list of courses around the state click here.

For a list of online self-study courses click here.

 

 

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Your HOA Dues May Soon Get a LOT More Expensive

Friday, August 1st, 2014

If you live in an HOA community in California, you’d better start collecting your change. California Assembly Bill 698 could take responsibility for exclusive use common areas away from home owner associations, and place it in the laps of homeowners. It is imperative to understand the proposed changes, as it looks like they may soon take effect.images

The bill rewrites  Civil Code section 4775, which specifies who pays to maintain, repair and replace identified areas of residential developments governed by homeowner associations called exclusive use common areas. Under the new rules HOAs will be able to redefine the maintenance requirements for these areas, and homeowners will have to comply - the HOA will be able to bring action against the homeowner for failure to do so. This will give much power to HOA boards and could lead to abuse.

Here is how certain areas are defined under current rules (check your HOA documents to see if you have exclusive use common areas):

Common areas – the associations are liable for maintaining these areas, which typically include areas that server the entire development such as pools, grassy areas,  play areas or parks, and roofs if the development is a condo or townhome.

Separate interest areas – these areas are usually the responsibility of the homeowner, and include the interior of townhomes or condominiums.

Exclusive use common areas – such areas are considered “appurtenant to” to the property (meaning they are attached or considered to go along with the property), and these areas tend to be maintained by the HOAs currently. They usually include areas that are useable by some owners, but not all, such as a deck or patio.

Homeowners who do not comply under the new rules will be subject to assessments or fines by the HOAs. They may also be able to place liens on the properties and force sales where there is no compliance with maintenance requirements. If homeowners are unable to pay, this could lead to foreclosure (worse case scenario).

How to prevent new changes in your HOA policy: The only way you can prevent such changes from occurring in your HOA community is to get involved and vote against any changes that will give broad power to your HOA. You need to be very aware and very involved – you cannot rely on others to deal with this problem because you will need a majority vote and there is strength in numbers.

You also should learn as much as you can about common area and exclusive use common areas boundaries defined in property surveys of your home and development, including any government definitions. The more you know, the better empowered you will be to make a difference in your community and your wallet. To see the bill, click here.

 

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California’s Water Crisis

Tuesday, March 25th, 2014

The following infographic contains interesting information about the water shortage in California, and how it will effect residents moving forward.

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California Median Home Prices

Tuesday, January 28th, 2014

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California’s Improving Markets

Monday, April 8th, 2013

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A History of California Home Prices

Tuesday, February 26th, 2013

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Home Buyers’ Shifting Desires

Wednesday, January 2nd, 2013

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