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Assembly Bill 139

What Is Assembly Bill 139?

On September 21 of 2015, Assembly Bill number 139 was approved by the Governor of California and filed with the Secretary of State with regards to the creation of “revocable transfer upon death deeds” (RTDD) that would facilitate the non-probate transfer of real estate. Effectively, the bill provides a method for the owners of real estate to ensure that a piece of property is expeditiously transferred to the intended beneficiary without the review of a probate court. The bill is in place until January 1 of 2021, after which the creation of new RTDDs will depend on an extension of the bill. All RTDDs created during the bill’s tenure will last until otherwise revoked.

Why the Need for a Change?

While probate courts serve the purpose of resolving the complicated affairs of large estates upon a person’s passing, they are primarily intended for superfluous assets that have a high value. Normally, you can bypass the probate courts for pay-on-death accounts, estates whose total value is less than $150,000, or items valuing less than $100,000 if you so choose, but most pieces of real estate will have values far exceeding the limit of the simplified procedures. The courts can be held up for as long as a year under normal circumstances if there are legal concerns, holding the real estate in limbo until the matter is resolved. If there are more complicated issues and concerted legal efforts on multiple sides, it can go on indefinitely. The legal fees associated with a probate court average at $26,000.

When the property is a family home, this mire of time and money creates a staggering upheaval in the lives of survivors that is unneeded.

What Protections Are in Place Against Abuses of the RTDD?

At any time, issuing a new RTDD will override any previously issued RTDDs.

If a person is found to have committed a felony resulting in the death of the decedent or intentionally brought about their death through any means, then the terms of the RTDD are nullified. This is the same as any other form of transfer upon death, including those that normally go through the probate courts, as a basic legal precaution against rewarding people for murder. There is also a 120-day moratorium on selling a home after receiving it due to an RTDD to limit its potential usefulness in confidence schemes.

Should You Consider an RTDD?

An RTDD will be a valuable tool for leaving property to those who may occupy a special place in your life yet not fall under the definition of family. If you have a lifelong romantic partner, a friend, or another person you find deserving for your own reasons, then you can leave have the notarized deed guarantee that they will receive the real estate.

The deed is also a way to reduce some of the estate costs that will cut into your legacy without the legal complication of estate planning or forming a trust.

Ultimately, the RTDD is a new tool that homeowners can use to ensure that their property moves as intended after their death with low costs and relative ease. You should keep the possibility of using a revocable transfer upon death deed made possible by Assembly Bill 139 in mind when purchasing a new home or planning your estate.

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La Quinta Real Estate Projections

La Quinta Real Estate Projections 2015

A resort city, La Quinta was noted as one of the fastest growing cities in the country. This is driven significantly by the fact that the area is home to a number of top-notch, award-winning golf courses and their highly desirable communities. Because the region also includes plenty of social, cultural and recreational opportunities for you to enjoy, 2015 is a prime time to purchase La Quinta real estate, such as a getaway home or retirement retreat.

Continued Growth is Expected

The real estate market showed promising signs of growth during 2014 and this upward trend is expected to continue during 2015. In fact, projections show that sales of existing homes could increase as much as eight percent. This is partly attributed to the continued availability of prime real estate offerings in highly desirable locations that come complete with many of the most requested amenities. In addition, many home buyers in the market today believe that an increase in both housing prices and interest rates is imminent which is predicted to fuel further growth.

Housing Prices will Remain Flat

wpid-2015-real-estate

Expect to see the prices of existing homes to remain steady with only slight increases of about four to five percent over the course of 2015. This means you can continue to get significantly more house for your dollar compared to just a few short years ago. 2015 marks a fantastic year to take the leap and purchase that vacation home you have always wanted. However, it is important to not let this home buying opportunity slip past you as home prices are expected to continue to rise slowly over the course of the coming months.

Interest Rates will Climb Slowly

This year is a fabulous year to retire to Coachella Valley and find your perfect retiree home. Even though interest rates have remained low for the past few years, you can expect that trend to change — albeit slowly. The Federal Reserve Bank traditionally increases its target rate by the end of the year. This means that by mid 2015, the projected interest rate for a 30 year fixed rate mortgage will likely be about five percent. While this rate is still quite low, it is a barometer for what is to come in the coming years and ultimately makes your home buying dollars less productive. The moral of this story: close on your chosen piece of La Quinta real estate sooner rather than later during 2015, if at all possible.

Competition May Increase

According to projections, those people that fall within the same segment of the population as yourself will be the very ones who are looking hardest at La Quinta real estate during 2015. As people reach retirement age or decide that they are ready to scour the market for a vacation home, Coachella Valley looks quite attractive. With the region’s stellar climate and proximity to many cultural amenities, recreational facilities and entertainment options, you can expect to find more competition for those homes that meet your needs as the year unfolds. Putting your real estate needs in motion now helps to significantly increase the likelihood that you will be able to purchase the home of your dreams.

It’s no secret that the real estate market has taken a hit these past few years. After all, this segment of the economy was one of the impetuses behind its nosedive. Things have slowly started to turn around for the economy in general, though, and this has been largely fueled by an uptick in the housing market. In fact, 2015 looks to be a banner year in the La Quinta real estate market, brimming with opportunities that you do not want to miss.

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Real Estate Closing Costs

 

Real Estate Closing Costs

Whether you are buying or selling, first time buyer or seasoned real estate veteran, closing costs are some of the most complex and confusing aspects of real estate transactions.

The Closing Costs Basics

The simple fact of real estate is that there are many minor costs associated with buying or selling a home. Some of them can be surprising or confusing. If you are thinking about trying a sale-by-owner there are some factors to consider that might give you pause for thought. Saving that broker’s commission could actually be very expensive if you misjudge the price or fail to account for some obscure part of the cost.

If you are negotiating with a party who has much more experience in real estate you can never be sure of their intentions; it is essential that you have a professional on your side. You don’t want to have to come up with thousands of Dollars in additional costs at the last minute or find yourself renegotiating terms under extreme pressure, without professional support and advice.

Either A Buyer Or A Seller Be

As a seller, you should receive an estimate of proceeds as part of the listing agreement. As a buyer, you can expect to receive an estimate of your closing costs at the time that your agent writes the offer. The fees and costs that have to be covered during the closing of real estate transactions fall into three broad categories:

  • Legal fees
  • Financial fees
  • Buyer/seller adjustments

In California the transfer of real estate assets is handled by disinterested third party entities that hold all of the elements of the transaction until everything is in place. In residential real estate, buyer and seller are usually required to bring some amount of cash to the close of escrow.  When all of the necessary conditions have been met, the escrow is closed and funds are sent to every party that is meant to receive them. 

The Breakdown For Closing Costs

The Legal Fees

The necessity of closing costs is justified by the safety and certainty of transfer that they provide to both sides. An owner’s title insurance policy, purchased by the seller, makes sure that there is no delayed crisis that results from a cloud on the title. If the buyer is financing they are required to purchase an ALTA insurance policy with their home loan provider as the beneficiary.

The seller usually pays for the escrow service, all of the documentation to put the transaction together and notary fees. The buyer will have to pay an escrow fee also, along with notary fees and fees for the recording of all deeds that they take on to finance the purchase.

The payment of transfer taxes and commissions are paid at closing. Basically everything that is to be paid by agreement has to be paid in by both parties before closing and all of these funds are distributed in the final act of closing. There is some flexibility in agreeing who pays what. That means that the parties can agree to pay whichever parts of the closing costs it takes to make the sale happen, as long as there is agreement and the escrow company receives clear instructions.

Financial Fees

For sellers, there will be appraisal fees, beneficiary statements, and any loan interest remainder will become due at closing. They can be taken from the proceeds of sale along with any home loan prepayment penalties that are in the terms of the seller’s loan.

For buyers, many of the fees revolve around the creation of new home loans: Fees for appraisal, assumption fees if the buyer is assuming the seller’s loan, fire insurance premium and a mortgage insurance premium for new FHA loans. Financing also means there will be loan origination fees, inspection fees, and appraisal and notary fees for the buyer too. If the Veterans Administration is providing financing, the seller will be responsible for the pest inspection fees; otherwise the buyer usually pays for it.

An Aligned Transfer Through Adjustments 

In homeownership and real estate investment, there are periodic payment impounds of some sort, held all year round. For example, property taxes and insurance policies must be paid up to a year in advance. When the time comes to close, they usually have an overpaid balance. The buyer becomes responsible and reimburses the amount for the excess period to the seller. All financial liability and responsibility is stated and paid outright at the time of closing. The seller should be able to walk away without any further burden or expense.

The Plan Comes Together

There is an old saying that everything is negotiable. That is true but it is a little unconventional in residential real estate. The majority of transactions in real estate follow tried and true patterns. These are protocols that have been very successful in bringing buyers and sellers together over the years. However, sometimes it helps to get a little creative in the terms to make a great deal happen.

When you are dealing with maverick counter-parties, who want to do things differently, you need to make sure that you have the right professionals supporting you, advising you and doing the hard work of your negotiation. That is the only way to ensure that you receive a fair deal.

The transfer of high-end real estate can be extremely daunting and intimidating. It gets easier with experience but it must be done correctly every time. On a scale of complexity it is certainly more difficult to organize than eighteen holes of golf but generally easier than the average wedding. Like a wedding, it makes all of the difference if you have professional support and help to see that it goes without a hitch.  The cost of closing in the buying and selling of real estate is a fact of life in La Quinta, Coachella Valley, and across the nation. Make sure you have the professional advice that will keep all of the costs aligned with your best interests.

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Renting vs. Buying

Property Sale and Rent Signs

Renting vs. Buying – Statistics released by the National Association of Realtors show that, across the country, half of tenants are paying more than 30% of their income as rent. Also, the number of renters paying more than half their income for accommodation has increased dramatically in recent years. If you’re choosing between renting in a luxury Southwestern community and buying, it’s always a very personal decision that’s dependent on many factors. However, once you’ve found a community such as PGA West, The Hideaway, Traditions or The Reserve, which suits your choice of lifestyle, you will most likely find that the high cost of leasing makes buying-in an extremely appealing alternative.

Habituated to The High Cost Habitat

 Owning your own home has traditionally been preferable to renting, as renting accrues all of the investment value to the landlord. During the property and finance bubble of the last decade this basic truth was turned on its head, as housing prices spiked but rents did not keep pace.Even so, in many of the metropolitan areas of the country, tenants accept without question that they have to pay in excess of half of their income as rent. We, as a nation, have become so habituated to this that we often fail to see the alternatives, even when they are readily available.

With the collapse of the market and the rebuilding that has gradually happened over the last few years, the state of affairs has returned to its pre-bubble norm. Having stated that, the time to purchase your own home is always the time when you are ready to do so. The timeframe is unique to everyone. Leasing is a great way to discover a community and remain flexible; there are real short-term benefits. However, in the long-term, home ownership usually proves to be the better option.

If your payments for the home that you occupy are extremely high you want to build some equity. At the high end of the market the benefits of ownership are even more pronounced. Living in the right place and in a style of abundance is a fine end in itself but, with the high cost of renting, you never gain anything to show for it on your personal balance sheet.

If You Can Rent That Coachella Valley Home You Can Buy It

Too many people are paying an excessive share of their income as rent. This is particularly true for California residents, where property values and rents have been sky-high for decades. Not just in the lower income brackets but across the market as a whole. We have developed an acceptance of the high cost of renting, based on what we hear in the media, and become accustomed to the range of properties available at a given price level. It’s natural to aspire to the best possible living circumstances we can afford.

The dictum of location, location, location is deeply ingrained in our collective psyche. It’s the basis of the American Dream in the minds of consumers. Living in a luxurious abode is an achievable dream and one that can be afforded by many. It’s human nature to want to take it to the limit and keep up with the crowd. When we work hard we feel that we’ve earned it. So we cut back on other things to live in the nicer neighborhood and the bigger house with more luxurious amenities.

It seems that many people fail to question that if we can afford to rent in a great location then certainly we can afford to buy a similar home. Dollar for dollar a rental budget in the country club communities around La Quinta will get you a more luxurious home than in the big cities on the Coast. Joining a community that gives you the lifestyle of your dreams is affordable and you can have comparatively more for the same price, plus the equity of ownership.

When homeowners depend on financing, a large part of their payment is devoted to interest, that’s true, but they retain a growing equity share and tax time will often bring further benefits, depending on the circumstances. The simple fact is that the cost of financing for ownership is less than the cost of leasing a home.

Even with the added cost of insurance on a low down payment FHA loan the investment of ownership is still very competitive with the cost of renting. The value of the Coachella Valley region becomes apparent when you compare it with the urban areas of San Diego, Los Angeles and The Bay Area. It’s much more affordable to own here then on the coast. The investment that will get you a typical three bedroom home in Los Angeles has the potential to position your household in the country club luxury lifestyle to which we’re accustomed in La Quinta.

Some Thoughts on Lifestyle Choices 

Home ownership is an integral part of the Coachella Valley lifestyle. Opportunities are abundant and the communities offer a rich array of activities and settings. The market has returned to levels that are comparable to historic norms. Our communities continue to grow and thrive as the secret of desert living spreads across the country and the world. Renters risk higher payments as the market improves, whereas owners gain equity and can keep their costs relatively flat as their home’s market value rises.

A lease on a luxury home in one of the communities around La Quinta, such as PGA West or Hideaway, will give you a splendid opportunity to explore our way of life. But, when you look at the big picture, you will still live far more comfortably when you take ownership of your abode.

Once you’ve decided to stay in the area you should consider how to explore the opportunities available for ownership of some of the finest luxury homes listed as available for purchase. Now that the market is in line with its historic trend it’s a great time to discuss how you can make the most of the Coachella Valley lifestyle.

Sources

http://realtormag.realtor.org/daily-news/2013/12/10/us-in-worst-rental-affordability-crisis-ever NAR shows high cost of renting

http://www.calculatedriskblog.com/2013/05/real-house-prices-price-to-rent-ratio.html Comparison of renting versus owning in the historic trends. From Calculated Risk Blog