When Owner Occupant Dies and The Home Has a Reverse Mortgage

This is a situation many heirs are beginning to deal with, and it's important to know what can happen after the death of a loved one who had such a mortgage.

Simply put, an heir has options: 1) He or she can pay back the loan; 2) sell the home to pay back the current loan amount, and keep the remaining proceeds; 3) deed the home back to the lender; 4) let the lender foreclose.

But really, the last two options should only be options when there is no equity left in the home, because why would an heir want to walk away from a potential sale and receive the remaining equity?  The first option may work for some people, if they have the ability to refinance with their own mortgage, thereby paying off the reverse mortgage.  But if an heir doesn't have the desire or financial ability to keep the home with a new loan, the remaining option is to sell the home.

Most original loan documents give a year to dispose of the property, but in practice, HUD will find out when the borrower passes away, and a due-and-payable notice will go out to the heirs giving them an opportunity to decide what to do. An appraisal may be required within 30 days, and a longer time period may be allowed for the heir to decide whether they're selling or staying.
It's a huge mistake to ignore this letter, because if 6 months passes by after the issuance of that letter, the home may be foreclosed on.  In California, from the initial filing of the foreclosure, there is another 121 days after which time the foreclosure is complete, and the heirs have now lost the home.

So the desirable situation is for the heir to keep in touch with the lender, answer their questions and get the home prepared for sale.  The lender really doesn't want to file foreclosure, they will only take the home back when they have no other choice, it's a cost to the lender, and they are not in the business of acquiring homes. So the lender will probably be very willing to work with an heir who plans on listing the home and getting it sold. That also sounds simple, but preparing the home for sale in order to get the best price may require pre-marketing work because an aged occupant may not have kept up maintainence, repairs, or upgrades for many years.  Be prepared for this, but it will be worth it for the heir if they stand to recoup a sizeable amount from the sale, i.e., what if the last statement balance on the mortgage was around $450,000, but the house is worth $750,000! A Realtor's job in this instance is to guide you through the preparation and actual sale of the home. See more information here.

If you need a Realtor to help you determine the value of a home with a reverse mortgage, please contact me right away, because time is of the essence! I have been helping clients with residential real estate since 1994.

Julia Huntsman, REALTOR, Broker | www.juliahuntsman.com | 562-896-2609 | California Lic. #01188996

Long Beach April 2019 Monthly Report, Graphics Style

April 2019 Market Report for Long Beach, California

 Median price for Long Beach in April was $633,000 based on 125 home sales (which is really not a lot for a monthly total), but the median days on market is only 20, yet about one-third of the active listings has been reduced. What this doesn't tell you is that the most price reductions are in the high end of the market which are taking longer to sell, because note that the sell-to-list ratio is 100%! As they always used to say in school, there's plenty of room at the top (because the bottom end of the market is and has been selling faster).

For help in this current market, don't be afraid to send me a message.  There are all different reasons for buying and selling, and I can help you with that!


Julia Huntsman, REALTOR, Broker | www.juliahuntsman.com | 562-896-2609 | California Lic. #01188996

What Is the California Tax Withholding for Buyers and Sellers?

Kitty says "Keep your eye on your withholding tax"

Very often sellers are unaware of this California tax withholding requirement to pre-pay their tax due on the gain of their property, and may equate it with capital gains tax or property taxes.

For income property sellers, and those doing property exchanges, installment sales and other transfers, this information may be most important:

The escrow officer must notify the buyer of his/her responsibility to withhold 3 and 1/3 percent of the gross sales price of real property sale, whether by an individual or non-individual such as an LLC, corporation, trust, etc., and pay it to the Franchise Tax Board, UNLESS an exemption applies.

The exemptions include sales less than $100,000; property last used as a principal residence; sales of decedent's principal residence by the estate; sale by 1031 exchange; seller's tax liability, calculated at the maximum rate (currently 12.3%) on the taxable gain, regardless of seller's actual rate, will be less than 3 1/3% of the gross proceeds and seller certifies that fact under penalty of perjury. 

For sellers in the pre-listing stage who are wanting to calculate their ultimate seller's net after a sale should be sure to give all such information to their tax adviser, if that is who is doing their calculations. Escrow is responsible for notifying the buyer of their responsibility to withhold, and the buyer must do so when escrow closes.  If the seller's actual tax rate is different than 12.3% above, then they need to consult with their tax advisor on the status of their particular state income tax requirements. 

See more information from the Franchise Tax Board  .


Julia Huntsman, REALTOR, Broker | www.juliahuntsman.com | 562-896-2609 | California Lic. #01188996

Have You Ever Been Hacked? What To Do Next

Online security affects all of us. Here is some new advice from the chief information officer Josh Sharfman at California Association of Realtors:

1. Isolate your computer by turning off wi-fi and unplugging the hardwired connection to the internet.

2. Change your password, but there's more on this:  Use a passphrase, as recommended by the National Institute of Science and Technology.  This means

• A unique passpharase at least 15 characters long and difficult to guess, such as "myllamahasnotoes".  Upper and lower case letters, numbers and special characters are counterproductive because a good password is one you can remember.
• Check your passphrase against a list on "Pwned Passwords at www.haveibeenpwned.com/Passwords, where you may also checks compromised accounts.
• Don't worry about periodically changing your passphrase. This may be controversial, but recent studies have shown that periodic changes are counterproductive.

 3. Enable multi-factor authentication (MFA) or (2FA).  This requires you to use two different methods of confirming your identity by text, phone call of verification code in an app. Go to www.turnon2fa.com to learn how to turn on MFA.

4. Update your security questions and responses, try to use less common questions.

5. Scan your computer using your installed antivirus software while it is disconnected from the internet. Reconnect your computer and then download updates and run antivirus scans again.

6. Reach out to your contacts to let them know you've been hacked, and you might want to give them the advice in this article!

For help on how to buy your next home, please contact me.  I have been a Realtor for 24 years, and I know how to help you. Both buyers and sellers are cautioned about wire fraud security in their transactions.  I have more information for buyers and sellers on my website at http://www.juliahuntsman.com.

Julia Huntsman, REALTOR, Broker | www.juliahuntsman.com | 562-896-2609 | California Lic. #01188996

Average Selling Prices for June, 2019 in Long Beach,Lakewood, Cerritos, Huntington Beach and Three Counties

View of downtown Long Beach

All these prices are for the month of June, 2019, based on data from CRMLS Infosparks:

Average prices for single family homes in Orange County were showing a slow downward trend since early 2018 but shot upward in May of this year, while Los Angeles County is trending up from $919,000 in December 2018, and San Bernardino County's average is now up the highest in the last 18 months as homeowners and investors find buying opportunity there.
The average days on market for the four cities is about the same as before.  However, in the very high end markets in Long Beach, properties over $1 million are generally on the market longer than those under $1 million.

Average single family home prices vary according to area, and here's what they look like locally:

June, 2019

Long Beach
 $661,746                 Avg Days on Market :34

Lakewood
$603,745                  Avg Days on Market : 28

Cerritos
$728,655                  Avg Days on Market :42

Huntington Beach
$1,014,446 (18 month high)   Avg Days on Market :40

Los Angeles County
$966,765 (still down from a high in May, 2018)

San Bernardino County
$377,714(highest average price in last 18 months)

Orange County
$1,087,04 (down slightly from May 2019 18-month high)

 

For condo prices, please contact me!

For an online and automated home valuation, try my site at http://www.juliahuntsman.com/home-evaluation.  It probably works more accurately for single family homes than condos in some areas, depending on what properties lie within about a one-mile radius.  Try it!  And I am always happy to do a more customized report to send out via e-mail.  If you're thinking about making a move, do it! It pays to keep an eye on things.

Julia Huntsman, REALTOR, Broker | www.juliahuntsman.com | 562-896-2609 | California Lic. #01188996

Top Floor Cathedral Ceiling Condo, Turnkey, under $420,000

Prime top floor condominium with spacious city views of the downtown Long Beach skyline. Cathedral ceilings and upper level clerestory windows offer plenty of light into the south facing living room. Extensive recent upgrades include stylish new kitchen cabinets, addition of dining area cabinets below new quartz kitchen counter and tiled backsplash, new gas stove, microwave and refrigerator. Bedrooms are spacious, closets have sliding mirror doors. Bathrooms have new dark colored cabinets, light colored counters, mirrors and tiled bath/shower areas, new appliances and new tile flooring. Hallway has additional counter and storage. A separate laundry closet in the hall includes a stackable washer/dryer. New vinyl flooring throughout sets off the light colored walls. Many Association features include the community pool and spa, exercise room and common area patio. There are two side-by-side parking spaces on the ground floor level in the gated parking garage. This unit is walking distance to Cesar Chavez Park, transportation and close to downtown entertainment, and is freeway close. A great opportunity at a good value.
Views, lots of light, Turnkey!
555 Maine Ave., #403, Long Beach.

• 2 bedroom, 2 full baths
• 2 parking, side-by-side
• South facing downtown city skyline
• Central Air/Heat
• Extensively remodeled, all appliances included.
• 
   MLS:  PW19086104
  Price, $410,000
  HOA dues:  $310/monthly 
• In escrow as of 4/24/2019 
• This unit closed on June 26,2019
  
  
  
  
  
  
   

Julia Huntsman, REALTOR, Broker | www.juliahuntsman.com | 562-896-2609 | California Lic. #01188996

What Does It Mean to Be a Co-signer on a Mortgage?

In today's world where there are higher home prices, many first time buyers, or younger buyers especially, are fortunate to have parents or grandparents to help them out financially.  There may be different reasons for seeking a co-signor on a mortgage loan, and sometimes there is another adult willing to help in that way.

According to an article by Lise Howe in REALTOR Magazine, 22.8 percent home purchase loans in 2017 included a co-signer, an increase from 2016 (data from ATTOM Data Solutions).

Frequently, buyers and sellers look to their Realtor as a source for answers during a transaction, but there are times we cannot advise when the question involves legal advice, tax advice, and other issues which are not included in a real estate license.  So a buyer and his/her co-signer really need to obtain advice and information about the responsibilities of being a co-signer.

So keep in mind, if you're a co-signer:

1. You are completely responsible for the loan payments if the buyer is unable to make payments.
2. The co-signer's credit report will reflect problems, if any, with the mortgage.
3. The loan affects the co-signer's own debt-to-income ratio, which could affect their own purchase plans in the future for borrowing capacity.
4. The co-signer's debts and financial information must be given to the lender as part of the buyer's loan process.
5.  Is your risk in the situation covered, i.e., your cash flow?

The decision for what type of mortgage to obtain is the buyer's responsibility, and it's the buyer's responsibility to search out their best options for borrowing.  So buyers, please talk to your tax advisors and a financial planner to make sure whatever you're considering fits into your financial capacity.

An option that does not involve co-signing is for the buyer to obtain help on the down payment only; with interest rates having dropped lately, buyers can qualify for more and possibly not need a co-signer. 

Please contact me if you would like more information about making a home purchase.  I have worked with many first time buyers in my 24-plus years of real estate experience!


Julia Huntsman, REALTOR, Broker | www.juliahuntsman.com | 562-896-2609 | California Lic. #01188996

A Few Positive Points about the Current California Housing Market

Here's some good news about the California real estate picture, in spite of everything else we hear/read/see:

• California unemployment is the lowest in over 40 years.
• The number of active listings increased in all California regions--highest number is in Southern California as of February, 2019:  over 26,000 single family homes on the market which is 20% more than last year.
•  California home price continues to grow at a modest pace, median price Feb. 2019 was $534,140, growth of 2.2%.
• The Inland Empire (i.e., San Bernardino County, and surrounding areas) price growth increased to 5.7% , compared to 1.4% in Los Angeles area. So what does this say about where it could be a good place to buy?
• Over all increase in owner-occupied single family homes from 2000: from 6,295,466 to 6,669,522 in 2018.
• More than half of California sellers surveyed by CAR think it's a good time to sell in 5 of last 7 months.
• Interest rates are low and may stay low for the rest of 2019! Good time for FHA buyers! The lower the rate, the lower minimum qualifying income for the buyer! Take advantage of low rates!
• Despite tough market conditions, first time buyer share is highest since 2012, at 34.8% in 2018.

Overall, the economy fundamentals are strong, including low national unemployment rates and increased job growt as of December, 2018.

While housing affordability is still an issue in California, prospective buyers do have options. And, a very important fact for buyers to learn is that there are LOW DOWN PAYMENT options, in the CAR survey over 70% did not know that an FHA loan only requires 3.5% down!!  FHA loans also allow for less perfect credit than conventional mortgages.
Please contact me if you are interested in buying or selling and let me put my 24+ years of experience to work for you!


Julia Huntsman, REALTOR, Broker | www.juliahuntsman.com | 562-896-2609 | California Lic. #01188996

That's Who We R®

That's Who We R®: The National Association of REALTORS®’ exciting new national ad campaign will clearly demonstrate the value of a REALTOR® to consumers, distinguish REALTORS® from other real estate agents, and deliver a sense of pride in REALTORS®.



Julia Huntsman, REALTOR, Broker |
www.juliahuntsman.com |
562-896-2609 |
California Lic. #01188996

Where Do U.S. Cities Rank on Vacancy Rates?

Jacaranda Trees in Stearns Park, Long Beach

The percentage or number of vacant properties in a region may indicate how easy or tough it is to buy or sell there, with higher vacancy rates usually meaning a buyer has an easier time of negotiating with the seller, but there are certain factors to take into account.  Lending Tree ranked the nation's 50 largest metro areas based on vacancies, and came up with some interesting numbers. Some, but not all, areas with more vacancies are more affordable than others.

Miami, Orlando, and Tampa in Florida have the highest vacancy rates, but those vacancies are also based on those areas being second home destinations, meaning they are not occupied all the time and therefore push up the percentage rate on vacancies.   San Jose, Denver and Minneapolis have the lowest vacancy rates in the nation--they have strong job markets combined with an influx of millennial buyers, factors which help sellers sell, but make tougher conditions for young homebuyers.
The next four cities with the lowest vacancy rates are Salt Lake City, Portland (Oregon), San Francisco and Los Angeles with 5.55% to 5.85% vacancy rates.

But a homebuyer might want to skip Florida, and head straight to Las Vegas, which has a 14.56% vacancy rate (4th highest in the nation on this survey) and a median home price of $212,300.  And speaking of median home prices, the lowest in this survey is in Buffalo, N.Y., at $135,000, with a vacancy rate of about 9%, which is the national average.

So while prices, and rents, are high on the west coast, if you are able to give yourself options, consider an area on this Lending Tree list.  It may not have the weather of the West Coast, but then that's why so many people have flocked here for generations, and created all that homebuying competition.
If you still think you'd like to consider a home in the Long Beach/Los Angeles metro area, I can help you with that, just go to www.juliahuntsman.com and search for a property! Or contact me by text or phone, or email! I have 25 years of experience to help you with.

Julia Huntsman, REALTOR, Broker | www.juliahuntsman.com | 562-896-2609 | California Lic. #01188996