Realty Trivia Challenge

TriviaWhat is considered the most expensive house ever built?

A. Bill Gates’ House in Medina, Washington

B. Donald Trump’s Mar-A-Lago in Palm Beach, Florida

C. William Randolph Hearst’s Ranch in San Simeon, California

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Answer: C. William Randolph Hearst’s Ranch in San Simeon, California Publishing magnate William Randolph Hearst certainly knew how to live the high life. The Hearst Castle aka “The Enchanted Hill” is a 90,000 square foot compound with 165 rooms and 127 acres of gardens, terraces, pools and walking paths. This magnificent property features 56 bedrooms, 61 bathrooms, 19 entertaining rooms, a private cinema, zoo and airfield. It was built between 1919 and 1947 by architect Julia Morgan and cost more than 500 million in today’s dollars to construct. Overnight guests have included Charlie Chaplin, Winston Churchill and President Calvin Coolidge.

Have you ever been to Hearst Castle?  If not, put it on your list of things to do when on the Central Coast.  My friend Brian proposed to his wife Michelle there…..romantic!

 

Source:  American Home Shield

Real Estate Humor

flower arrangementA client bought a new home and the broker wanted to send flowers for the occasion. They arrived at the home and the owner read the card; it said “Rest in Peace”.  The owner was angry and called the florist to complain. After he had told the florist of the obvious mistake and how angry he was, the florist said. “Sir, I’m really sorry for the mistake, but rather than getting angry you should imagine this: somewhere there is a funeral taking place today, and they have flowers with a note saying, “Congratulations on your new home”.

Source:  http://capropertyfinder.com/real-estate-jokes-pictures-comics-cartoons-humor-one-liners/#sthash.l8GfYK6R.dpuf

Tips for Sellers

for saleIt can be a bit overwhelming when deciding to sell your property.  The most important thing to remember is to be flexible, especially with sale terms. Purchase price, closing dates, move-in dates, storage, appliances, furniture and fees may all require a little negotiation. Whatever the terms, don’t let personal feelings stand in the way of a good deal.

Start with the basics.  Curb appeal, cleanliness, overall good condition and updates are especially crucial. Any little flaw should be taken care of before the first buyer drives up.

  • Attend open houses in your neighborhood to see what “sell-ready” really looks like. If you’re shy, ask your Real Estate Agent to walk you through a few sell-ready examples.
  • Start with the exterior to ensure you’re  making a good first impression. Clean up the front area including the  yard, front door, porch and garage door.  Change the lights on the front of the house, and if necessary, reset the walkway stone.
  • Clean the interior beyond your standards.   Even if they are impeccable, rent an industrial carpet cleaner or hire a professional cleaning service. Brighten the interior ambience with light  fixture updates, as new lighting is one of the most inexpensive and noticeable improvements you can make prior to listing.
  • Fix leaky faucets and make sure the water pressure is strong in both the kitchen and bathrooms.
  • If necessary, a great way to improve the appearance of your home is to paint. Use only neutral colors that can easily lend themselves to different décor and styles of furniture.

Don’t reject low offers; negotiate

  • Don’t dismiss lower-than-expected offers. Instead, consider buyer incentives that help you meet your asking price.  Offer to pay the buyer’s closing costs, moving costs or loan origination fee. These can help the buyer with upfront costs. As well, you may consider offering a limited home warranty that covers HVAC systems and some appliances for a definitive period of time.
  • Be careful of purchase offers that are contingent on the buyer selling their home first. Their home may be in a softer market than yours and you could be in for a long wait. Be sure that the purchase agreement includes a contingency-release clause. This way you’ll be able to sell if another buyer comes along.
  • The purchase price is just part of the deal. Anything that makes your property stand apart from the competition will give it an edge in a buyer’s market.

 

Options for Holding Title in California Real Estate

holding titleVesting, or how to hold title to real estate, is important for estate planning and tax reasons. Each state in the U.S. has its own vesting rules. When you purchasing real estate, you should consult with an accountant or tax attorney before the sale closes and the deed is recorded.  Disclaimer:  I am NOT a CPA, tax professional or attorney but as a real estate broker/agent in California can provide an overview of some of the options.

Title to real estate in California may be held by individuals, either insole Ownership or in Co-Ownership.  Co-Ownership of real property occurs when title is held by two or more persons.  There are several variations as to how title may be held in each type of ownership.  The following brief summary highlights eight of the more common examples of Sole Ownership and Co-Ownership.

Sole Ownership

1.  A Single Woman/Man:  A woman or man who is not legally married.  Example:  Jane Doe, a single woman.

2.  An Unmarried Woman/Man:  A woman or man, who having been married is legally divorced.  Example:  Jane Doe, an unmarried woman.

3.  A Married woman/Man, As Her/His sole and Separate Property:  When a marred man or woman wishes to acquire title in her or his name alone, the spouse must consent, by quitclaim deed or otherwise, to transfer thereby relinquishing all right, title and interest in the property.  Example:  Jane Doe, a married woman, as his sole and separate property.

Co-Ownership

4.  Community Property:  the California Civil code defines community property acquired by husband and wife, or by either.  Real property conveyed to a married woman or man is presumed to be community property unless otherwise stated.  Under community property, both spouse have the right to dispose of one half of the community property.  If a spouse does not exercise her/his right to dispose of one-half to someone other than her/his spouse, then one half will go to the surviving spouse.  If a spouse exercises her/his right to dispose one half, that half is subject to administration in the estate.  Example:  John Doe & Jane Doe, husband and wife.  Example:  Jane Doe, a married woman.

5.  Joint Tenancy:  a joint tenancy estate is defined in the Civil Code as follows “A joint interest is one owned by tow or more persons in equal shares, by a title created by a single will or transfer, when expressly declared in the will or transfer to be a joint tenancy.”  A major characteristic of joint tenancy property is the right of survivorship.  When a joint tenant dies, title to the property immediately vests in the surviving joint tenant(s).  As a consequence, join tenancy property is not subject to deposition by will.  Example:  John Doe and Jane Doe, husband and wife as joint tenants.

6.  Tenancy In Common:  Under tenancy in common, the co-owners own undivided interests, but unlike joint tenancy, these interests need not be equal in quantity or duration, and may arise at different times.  There is no right of survivorship; each tenant owns an interest which, on his or her death, vests in his or her heirs.  Example:  John does, a single man, as to an undivided 1/3 interest, and Henry Adams, a single man as a n undivided 2/3rd interest, as tenants in common.

7.  Trust:  Title to real property in California may be held in a title holding trust. The trust holds legal ad equitable title to the real estate.  the trustee holds title for the trustor/beneficiary who retains all the management rights and responsibilities.

8.  Community Property with Right of Survivorship:  Community Property of a husband and wife, when expressly declared in the transfer document to be community property with the right of survivorship. and which may be accepted in writing on the face of the document by a statement signed or initialed by the grantees, shall upon the death of one of the spouses, pass to the survivor, without administration, subject to the same procedures as property held in joint tenancy.

I strongly recommend you seek professional counsel from a CPA, attorney or tax professional to determine the legal and tax consequences of how title is vested.

Mortgage Debt Forgiveness Act of 2007 Extended

taxesThe Internal Revenue Service’s Mortgage Debt Forgiveness Act of 2007  has been extended through the end of 2013. What does this mean?

You probably recall the Mortgage Debt Relief Act of 2007 allows certain taxpayers to exclude income connected with the discharge of debt on a primary residence.  This includes debt that has been reduced through the restructuring of a mortgage as well as mortgage debt forgiven in connection with foreclosure, short sale, or deed-in-lieu of foreclosure.

The recent extension comes as part of the vote that passed so we do not go over the “fiscal cliff.”  This vote should motivate potential short sale sellers to list and sell their homes in 2013.

According to the IRS (Tax Tip 2011-44), here are 10 facts that the IRS wants people to know about Mortgage Debt Forgiveness. (Information courtesy of the IRS. Please check with your tax advisor/CPA regarding your specific situation.)

  1. Normally, debt forgiveness results in taxable income. However, under the Mortgage Forgiveness Debt Relief Act of 2007, you may be able to exclude up to $2 million of debt forgiven on your principal residence.
  2. The limit is $1 million for a married person filing a separate return.
  3. You may  exclude debt reduced through mortgage restructuring, as well as mortgage debt forgiven in a foreclosure.
  4. To  qualify, the debt must have been used to buy, build or substantially improve your principal residence and be secured by that residence.
  5. Refinanced  debt proceeds used for the purpose of substantially improving your principal residence also qualify for the exclusion.
  6. Proceeds of refinanced debt used for other purposes – for example, to pay off credit card debt – do not qualify for the exclusion.
  7. If you qualify, claim the special exclusion by filling out Form 982, Reduction of  Tax Attributes Due to Discharge of Indebtedness, and attach it to your  federal income tax return for the tax year in which the qualified debt was      forgiven.
  8. Debt  forgiven on second homes, rental property, business property, credit cards or car loans does not qualify for the tax relief provision. In some cases, however, other tax relief provisions – such as insolvency – may be applicable. IRS Form 982 provides more details about these provisions.
  9. If your debt is reduced or eliminated you normally will receive a year-end statement, Form 1099-C, Cancellation of Debt, from your lender. By law, this form must show the amount of debt forgiven and the fair market value of any property foreclosed.
  10. Examine  the Form 1099-C carefully. Notify the lender immediately if any of the information shown is incorrect. You should pay particular attention to the amount of debt forgiven in Box 2 as well as the value listed for your home  in Box 7.

The follow-up question is does the tax forgiveness apply to state taxes as well?  The California Association of Realtor® recently issued the following statement about California taxes in a short sale:

“The state Senate today passed C.A.R.’s tax relief bill without a single “no” vote. SB 30, which provides tax relief to those who are selling a home in a short sale, will now be considered in the state Assembly.

In late May, the Senate Appropriations Committee linked SB 30 to SB 391, a C.A.R.-opposed bill that creates a recording tax. This link, in the form of an amendment, says that SB 30 cannot take effect unless SB 391 does as well. While we are troubled by this transparent political maneuver meant to force C.A.R. to support the recording tax, C.A.R. will continue to work toward the passage of SB 30 in the Assembly, the defeat of the recording tax, and the delinking of the two bills.”

Again, check with your tax advisor/CPA for details regarding your specific situation.

Source:  Short Sale Expeditor and IRS

For previous articles, visit http://www.SonjaBush.com