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Real Estate
e-Newsletter
by Cynthia S. Radom
Award-winning Certified Seniors Specialist REALTOR® - Specializing in Trust Sales
Since 1994
Coldwell Banker Realty - Beverly Hills CA
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NEWS & ISSUES for BABY BOOMERS to GOLDEN-AGERS |
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** Writer and Publisher since July 1999 **
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Who coined the phrase: Location, Location, Location? A British real estate tycoon named Lord Harold Samuel, founder of one the largest UK property companies, is attributed to creating the phrase. But, in 1926, the Chicago Tribune ran a classified real estate ad using the same three words at a time when Lord Samuel was only 14 and too young to be making property deals. The debate continues.
The repeated use of one word: location, was to emphasize that the value of the property depends on where it is located. The phrase attracts Buyers and hints that an up-charge may be included because of the location.
This year I will celebrate 30 years as a residential REALTOR® in Beverly Hills. I’m here to tell the Trib and Lord Samuel, both are incorrect. There is only one word that matters when selling any property, and it is not "location".
It's all about the word, PRICE.
Pricing a property is a compilation of all aspects including: condition, features, size and location then compared to recent sales in the area. The key pricing strategy is to start at or below market value. The main objective for a Seller is to attract several Buyers and create a bidding frenzy. When the Buyers see added value, they will offer above the asking price.
Nothing is more important than pricing a property to sell, no matter where a property is located. It could be a swamp in the desert, but the Buyer needs to believe they received value for the price paid. If it’s not priced for value, the property will stay unsold on the market until the price is reduced.
When the interest rates were historically low, and money was cheap, an owner could ask any price and it would most often receive multiple offers. In today’s real estate market, the asking price matters more than ever. Especially if the home is a fixer or teardown. Sellers (and Buyers) need to realize that the cost of labor and materials is far higher today than in pre-COVID years. Yet, despite rising mortgage rates, when a property is priced to sell, the SoCal area is still seeing multiple offers above the asking price.
Sellers, the one most important word in real estate: Price, is ultimately decided by the Buyer.
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Just like a listing agreement for a Seller, get ready to sign a Buyer Representation & Broker Compen-sation (BRBC) Agreement when wanting the expertise and time of a REALTOR®. The Agreement terms will be decided between an agent and a prospective Buyer to specify their working relationship, just like any other professional. More importantly, it will ensure that an agent gets paid for their time and efforts to navigate the complex legal, financial and decision-making process of buying a property.
The terms will also satisfy the "procuring cause" without questioning which agent found the property for the Buyer. The BRBC is becoming an industry standard nationwide.
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Fire Prevention
Homeowners who live in the hills or near any undeveloped land, known as a Fire Hazard Severity Zone, are aware of their required annual responsibility for brush clearance. Every year personnel of the LA County Fire Department make a property inspection of these areas, today it is done with the use of drones. If non-compliant a letter is issued to the property owner to cooperate.
Assembly Bill 38 took effect in July 2021, commonly referred to as Real Estate Inspections. Any Seller of a single-family home that was built prior to 2010 and located in a high or a very high fire severity zone must disclose to the Buyer when the latest brush clearance inspection was performed and submit a compliant “defensible space” inspection report prior to closing.
There are two parts of this Seller disclosure form given to the Buyer:
1. Fire Hardening: Includes hillside brush clearance and any feature that may make the structure vulnerable to wildfire and flying embers (see 2B of the form).
2. Defensible space: A designated area surrounding a structure that is free of highly flammable vegetation.
If the Seller has not complied with issues cited by the LAFD or has not received an inspection clearance within six months of closing, the responsibility for compliance needs to be negotiated with the Buyer before the close of escrow. For homes with an HOA, the Association normally takes care of the compliance.
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When longtime homeowners say, one day I will move, my reply is always, where are you going? A lifestyle change in the later years does not come quickly and planning takes time. Now is the time to consider the options for your next home, prior to dealing with physical, emotional, financial and health issues.
There are so many options to explore, this may take months, even years, to finalize. People say, I can still walk the stairs or I can still handle the upkeep or I want to wait, but waiting may ultimately remove your control to make decisions.
Consider the initial questions of what, where, when and how?
WHAT?: This is the big one because it's not about today, it's more about tomorrow. Explore your options: a condo, a rental, a Seniors active community or an assisted-living residence where you can age in place. Each takes an analysis of how you are today (physically and financially) and how you want to live in the coming years. Touring different buildings, communities and residences, especially in faraway areas, takes time and effort.
There may be a specific community that fits your desires, but a waiting list may take years for an opening. In this case, place a money-back deposit to hold a place in line and if you're not ready when called, then ask to be called in the future.
WHERE? Closer to family, to the desert, to another state, to northern CA or stay in the same area? Prop 19 allows you two years to explore a new CA county and keep your low property tax. The try it before you buy it option is invaluable.
WHEN? Set a timeline. If the stairs are starting to bother your knees, moving sooner rather than later will be the motivation for a more manageable lifestyle.
HOW? As a Seniors Specialist REALTOR®, I can help by offering some thoughts and a preliminary roadmap based on your answers to a few questions.
Call me for a discussion, or better yet, for a personal meeting. I have helped hundreds of people just like you so take advantage of my expertise...(310) 779-1715.
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FOR SALE: Newly Built Home in Brentwood: Click here for details. |
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Induction vs. Gas Cooktop |
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Before replacing your worn-out gas cooktop, recall that CA wants you to convert to all-electric sooner rather than later. There are already laws in place to lower the carbon footprint of new construction in California and by 2035, 100% of new cars and light trucks sold in the Golden State will be zero-emission vehicles, including plug-in hybrid electric vehicles. If you've been cooking with gas, the thought of going electric may be totally unsatisfying. However, there is a third choice and it's time to consider an alternative...an induction cooktop.
Watch this video as Dean Sharp, The House Whisperer on KFI-radio, compares induction to gas cooktops. Is the former all it's touted to be vs. gas cooktops; more accurate, faster, more powerful, more responsive and no heat to the touch of skin when activated? Also, there is no need to replace cookware as long as you have magnetic pots and pans; i.e. cast iron, stainless steel and most non-stick. Only copper and aluminum will not work on induction cooktops. |
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You're not ready to sell, so you're just going to rent the home until you decide what to do. Before you move out or start looking for a tenant, consider the following:
- Taxes: Turning your house into a rental property can have a significant tax hit if you decide to sell later. Also, rental income is taxable.
- Fix-up: All those little things that were never fixed or replaced will need to be addressed: the cost of painting throughout, replacing the carpeting, tenting for termites, installing mandated safety features and other high-cost cash outlays before renting.
- Expenses: There are fixed costs to be paid: property taxes, insur-ance, HOA dues/assessment, pool and gardening services and mortgage payments. Also, unexpected costs when a tenant needs to be evicted or doesn't pay (like the COVID moratorium) or trashes the home before vacating.
- Landlord: Who is responsible for 24-7-365 emergency calls and repairs? If there are multiple property owners, how does one sell their portion?
There is a lot to consider before you convert a home into a rental. Then, years later, when you decide to sell with a much higher tax structure, do you turn over the property with a 1031-exchange? And you thought paying capital gains tax was a big bite.
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Tidbits of News!
- " How Century City Became the Best Office Market in the Country” - article.
- Homeless Facility: A 33-bed interim residence will be built at Pico and Midvale in WLA, one block west of Westwood Blvd. for the "local" homeless.
- ULA Tax Remains: The two lawsuits disputing the "Mansion Tax" were formally dismissed stating, "failure to state facts sufficient to support any claim".
- CLUE Report: "Comprehensive Loss Underwriting Exchange" is a report that can be ordered by the Seller which provides a list of insurance claims as an addendum to the Transfer Disclosure State-ment provided to the Buyer. This is not mandatory.
- FHA Loans: Easier qualifying FHA mortgages have a borrowing limit up to $1,149,000.
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Winter rains, chilly weather and overcast skies. Forget Spring cleaning, now is the time to finally get rid of the stuff you've been accumulating for decades! Look around, what do you see? Old newspapers, last year's bills, expired coupons, scattered clothes (because the closets are too full).
Decluttering 101
Traditional rule: If something hasn’t been used or worn in three to five years, it goes unless it offers great sentimental value. Here is an easy-to-follow way to get back to the home you once had:
- Start with one room and finish the job before moving on.
- Take one area within that room: a closet, a desk or a workspace and
continue until the room is decluttered.
- Use large garbage bags and label: TOSS or DONATE. There are numerous charities that will pick up a variety of items in good condition. When calling about a donation, ask what items are not accepted.
Medicine Cabinet
All the expired or unused Rx and OTC medicines must go. Ask your pharmacy if they have a drop-off option. Do not flush the contents as some meds cannot be filtered through the water supply.
Garage Cleanout
This area is a beast of another kind. Take a deep breath, open the garage door (where a car usually enters) and start removing every-thing.
- Visually identify four sections in the yard and place each item accordingly: TOSS, DONATE, KEEP and HAZARD.
NOTE: Anything that contains hazardous or explosive material must be disposed of at a recycling center, i.e.: paint, lawn and garden fertilizers, electronic items, etc.
Enlist the help of your gardener who knows where to dispose of hazardous waste. Ask your housekeeper, or hire a cleanup service to help declutter.
Lastly, call your offspring and tell them to pick up their stuff or it will get tossed. Then sit back and enjoy your newly refreshed home.
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In every CA real estate transaction it is the Buyer's responsibility to complete due diligence. This means learning as much as they can about the property during a contingency period by hiring third-party vendors to inspect, from the roof to the sewer pipes and review any permits on file.
Just a few years ago, it was the Seller who obtained retrofitting and termite inspections as part of their disclosures, and reports were given to the Buyer. Today, the Buyer is responsible for obtaining all investigations or waiving.
A REALTOR® may suggest that a Seller obtain an inspection report prior to listing. In theory, it may cut down the days that a Buyer removes inspection contingencies. But, it is best to let the purchaser complete due diligence.
A Buyer may:
- Want to hire their own trusted vendors.
- Not accept the findings of a Seller's report and re-inspect.
- Opt to rebuild or do major work to the structure and the Seller's report isn't needed.
A Seller's report may disclose an issue where there is no issue. This happens: a vendor can be wrong, so let the Buyer's vendor be wrong. It is not suggested by a majority of agents that an owner obtain inspections.
There are, however, reports that a Seller must purchase or provide to the Buyer including a preliminary title report, Natural Hazard Disclosure report, HOA package and City of LA report (both where applicable). There are also Seller questionnaires that provide known disclosures about the property, and numerous "advisory" forms created by the CA Assoc. of REALTORS®
that are provided to the Buyer.
Each principal should focus only on their individual responsibilities. There's plenty to do.
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CORRECTION: Reference the Fractional Ownership article in my last Newsletter. I am informed that the Specific Plan for One Beverly Hills, approved years ago, does allow fractional ownership units!!!
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Respecting your privacy and confidentiality, names and e-mails will only be used for providing pertinent material from Cynthia S. Radom and will not be shared with any other organization.
©2024 Coldwell Banker Real Estate LLC. Coldwell Banker® is a registered trademark licensed to Coldwell Banker Real Estate LLC. An Equal Opportunity Company. Equal Housing Opportunity. Owned By a Subsidiary of NRT LLC. This is not intended as a solicitation if your property is already listed.
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