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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

NEWS & ISSUES for BABY BOOMERS to GOLDEN-AGERS
October-December 2021 · Website: RealtorRadom.com · (310) 288-0479  CalRE #01184864
** Writer and Publisher since October 1999 **
SELLER IN POSSESSION
Beyond the Close
When a Seller needs time to vacate the property beyond the close of escrow, the holdover terms must be agreed to in advance and in writing. If a loan is used for the purchase, the lender needs to also approve those terms. There are two different forms that a REALTOR® uses to confirm the terms, depending on the number of days needed for the extension.

- 29 days or less: Form SIP, Seller In Possession, one page
This form does not create a "typical" tenant/landlord relationship. Some terms include:
- the holdover fee
- a late or non-sufficient funds fee, if the Seller does not adhere to the payment terms outside of escrow
- Seller continues paying utilities and must get renters insurance to cover personal belongings
- 30 days or more: Form RLAS, Residential Leaseback After Sale, five pages
This agreement contains more terms, including money that may be withheld from the Seller's proceeds, which is returned after the tenant vacates, if applicable.

However, neither form addresses a penalty fee for an unauthorized holdover (refusal to vacate), as a Seller is then considered a non-paying tenant. Just imagine the major issues that a Buyer inherits when they cannot take occupancy and the Seller needs to be evicted. And, yes, some unscrupulous Sellers have taken advantage of backed up Courts as a result of the pandemic. The COVID-19 Tenant Relief Act of 2020, by which occupants could not be evicted, did not apply to short-term, after-sale holdovers.

COVID-related laws are playing havoc with evictions. As a result, some Buyers are opting for this term when negotiating a purchase:
Seller is to vacate the property prior to closing date. And, should an unauthorized holdover occur, a $2,000 per day charge will be paid to the Buyer until vacated. When possible, a Buyer should delay the closing until after the Seller vacates. (CA's moratorium is expected to end September 30th.)
Avoid Probate
When an owner has not created a Trust or a Will for distribution of their assets, the process can vary according to state law and the complexity of the estate. Lengthy delays to heirs obtaining assets, costly legal expenses, bitter disputes among family members and a public court process describe some of the issues associated with probate. A leading CA law firm, Weinstock Manion, specializing in estate planning, offers an explanation of "probate" and how to avoid this expensive and lengthy process.

Definition
Probate is the process of settling an estate and passing legal title of ownership to heirs. With a valid Will, created by the decedent, probate begins when the named executor presents the document in the County courthouse. Without a Will, the deceased has died "intestate" and the Court will appoint an administrator who becomes the estate's legal representative.

Avoiding Probate
The transfer of real estate is not an asset that is exempt from probate. The sale of property in probate, which requires Court confirmation, is time-consuming to REALTORS®, Buyers and heirs.

Property owners try to save money by avoiding the expense of creating a Trust. In the end, the costs involved in a probate process are much greater and can be easily avoided with a Revocable Living Trust.
Are You a Squirrel?
The owner's daughter kept saying her father was a squirrel, he liked to hide things. While a floor safe was found and opened with a combination, there was a sub-compartment, but no key. A locksmith was summoned at her persistence and the heirs are $80,000 richer in found cash. Some bills were so old, one bank would not accept the money. If you are a squirrel, tell someone before it's too late! This house was eventually torn down!!!
NEW BUILDING LAW: READ
Winning an Offer
An article in the CA Real Estate magazine piqued my interest enough to share some pointers for home Buyers and Sellers. Today's multiple purchase offer environment is heart-wrenching for Buyers. And, for a Seller selecting the right offer (one that will close escrow), it is often like shooting dice.

As a listing agent, I created a list of Buyer's Offer Instructions to help both principals when dealing with multiple offers. A few hints from my guide and a few tips from the article on how to make a winning offer include:
#1. Prove the Buyer's Financing
Competing with all-cash offers is doable when an Advanced Loan Review approval and proof of cash for down payment and closing costs are included with the initial offer. When submitted, the Buyer can consider removing the loan contingency. With interest rates at rock bottom, many all-cash Buyers include the option to obtain a loan, requiring a longer closing period.
#2, Submit a Strong Offer
There are no rules, and a Seller can accept any offer without first countering to others. I counsel Buyers to submit an initial price that is very close to their maximum to get the Seller's attention. The objective is to get a Counter Offer and then determine the final price.
#3. Befriend the Listing Agent
While no secrets are shared and the same info is provided to all, the Buyer's agent should speak with the listing agent to inquire about any pertinent nuances. My Offer Instructions provide how-to details from the Seller and, if not followed, the Buyer may be overlooked.
#4. Minimize Contingencies
Making the cleanest offer that a Buyer is comfortable with is the goal. Waiving loan, appraisal and inspection contingencies or minimizing the days to remove are major benefits.
#5. Put More Skin in the Game
Whatever extras a Buyer can include in the offer to reassure the Seller that escrow will close is helpful.
BUYERS: Knowing when to walk away in a bidding war is key. If you stretch too much, escrow may eventually be cancelled.
Avoid an Assessor's Penalty
Here is a message from Jeffrey Prang, LA County Assessor:
"Many property owners are unsure of the requirements following the death of a property owner. Understandably, this is a difficult time for families and the Assessor may not be the first person you think of in the aftermath. 
  • A Change in Ownership Statement is required to be completed and submitted to the Assessor’s office. The Assessor’s office must be notified upon the death of an owner within 150 days of the date of death. There is a financial penalty for failure to file, unfortunately, so it’s important that property owners are aware of this requirement.
Our (Assessor's) office provides a list of helpful resources on our website, including fact sheets and all the required forms. I encourage you to look these over and familiarize yourself with the different requirements...learn more here."
Sept. 1, 2021: There have been 747 closed Westside sales of $5+ Million, an 81% increase over 2020.
Power of Attorney
When you assign multiple Successor Trustees to oversee the distribution of assets, consider how this may work, logistically. For example, you have three children: one lives in another state, one lives in another country and the youngest lives 20 counties away from the subject property in CA.

All co-Trustees need to sign every document when selling the family home, and utilizing electronic signatures is easy. However, an original signature is needed on the deed in order to transfer owner-ship. The out-of-country Trustee will be required to visit the local American Embassy to have their signature notarized, thereby satisfying the title company. Any last-minute, original signatures may delay the closing and create additional expenses to Seller's closing costs.

An easy remedy is to assign Power of Attorney to one of the three Trustees for the specific purpose of selling the home. This does not give decision-making authority to just one, but just makes the sale process easier. However, this assignment must be stated in your Trust. If not documented, but the co-Trustees agree, the title company or an attorney can draft an addendum to the Trust for the specific POA.

It is always a good idea to review your Trust over the years and to make needed changes.
Tidbits of News!
- Neighborhood News: Be the first on your block or in your condo building to learn about new listings and sale prices. The service is free, just e-mail RealtorRadom. State your street, surrounding area or an out-of-area location and MLS listings (with photos) will be sent, when applicable. Try it!
- World's Largest (not for sale)
Mumbai, India: the "big house" is the world's largest privately-owned residence with 27 stories; 400,000 sft. of living space and a required staff of 600 people to maintain. Recent valuation was $2.2 Billion. (Buckingham Palace is valued at $6.76 Billion.
Nanjing, China: the largest home on the planet is the former Presidential Palace. A publicly-owned estate with over 968,751 square feet is now a museum.
- Reminder: Click on the blue, underlined words for more news.
Self-Staging
Hiring a professional staging company to enhance furnishings is not needed to resell a home. Costs may include: an hourly designer fee, delivery charges and monthly furniture and accessory rental until the home is sold. NOTE: An owner should wait until the close of escrow to remove rented items in case the home has to be placed back on the market. This adds one or two months of staging costs, already in the thousands of dollars. Virtual staging is a viable option for vacant homes, as discussed in past editions.

A home should always appeal to a Buyer's senses: smell fresh; look tidy; light and bright; pleasing sounds; open spaces to roam and accessible for opening cabinets, drawers, closets. The goal at the property showing is to allow the prospect to see themselves living in your home, with their own furnishings.

This self-staging preparation can be done at no charge:
- Minimize: Remove clutter; organize countertops and pack away personal items.
- Openness: Uncover windows to show natural light; open doors and windows with screens for fresh air.
- Clean grass: If a dog visits your yard, make sure all residue is removed.
- Rearrange: If needed, move furniture to create a more open- room flow.
- Fresh smell: Do not use plug-in scents, fragrances or candles as people can be allergic or highly sensitive. Use odor absorbing products in advance of showings.

The item being sold is the home, not the furnishings. Even a vacant property sells for top dollar.
Not in a Hurry?
When a Seller says, "I'm not in a hurry to sell my home", they may believe that the longer their listing stays on-market a Buyer may pay their price. The reality is:
- A home usually sells for the highest price within the first two weeks on market; Buyer interest wains thereafter.
- Estate sales over $5M may take longer to receive an offer.
- The longer a listing stays active, prospects begin to question if there is an issue with the house.
- Heed your REALTOR's® advice when a price reduction is needed.
Building Issues
The home construction industry is facing major hurdles from issues that started before and during the global pandemic, and continues today. Here is what's happening:

- CA labor shortage
CA's construction labor shortage was becoming apparent before COVID began. Longtime workers who were starting to retire were not being replaced at an equal pace. For every five retirees, only one new construction worker is coming into the field. Even with an average starting wage of $21.62 per hour, labor v. technology is not appealing to young CA workers.
- Unexpected surge
As COVID required businesses to close, or lay-off workers, no one anticipated the demand surge for home remodeling. People were learning what they wanted or needed while spending 24-7 inside with family and a sudden influx of extended members. The building industry was caught off-guard.
- Scarcity and higher prices
A sudden drop in building materials, as lumber and steel mills closed during the pandemic, is now causing delays and huge spikes in prices. The cost of plywood is six times higher and steel 70% higher than pre-COVID. Sky-rocketing construction costs are a lingering issue.
- Backlogs
As businesses start to regroup, the building industry endures more hurdles with import backlogs and a long trail of permit and inspection delays. Coupled with a shortage of workers, the CA home building industry continues to struggle.
Failed Appraisal
During a fast-paced Seller's market, when prices are rising at breakneck speeds, the required lender's appraisal often becomes an issue. What does a Buyer and a Seller do when their negotiated purchase price does not cover the loan amount, according to an independent appraiser?

The lender needs to consider what may happen if a Buyer has to sell the home soon after purchasing. Can the resale price pay off the loan? Here is an interesting article from the Miami Herald, which offers some good suggestions when the appraisal falls short.

Pay special attention to the last paragraph in the article!
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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.

©2021 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.