What can Props 58 and 193 do for you?

By: Cathy Strini

As real estate agents, it is our fiduciary duty to act in the best interest for our clients. This requires us to constantly expand our areas of expertise.. from termite infestations to mortgage applications, we deal with it all! We also realize the value in sharing our acquired knowledge and educating our clients (and blog-readers). Knowledge is power..and often can lead to saving you or your loved ones thousands of dollars! Today we will be introducing Propositions 58 and 193 and their significance in the current real estate market.

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In California, real property* is reassessed at market value if it is sold or transferred. A home is generally taxed at 1% of it’s assessed value, meaning that in today’s market your property taxes may increase dramatically following a reassessment.

For example:  Imagine you bought your home in 1996 for $110,000. The original property tax would be $1,100 a year. Assume that you now want to sell or transfer the home and it is worth $1 million in the current market. The new owner would pay property tax on $1 million, or $10,000 the first year.

If you are selling your home to stranger, this increase in property tax probably means nothing to you. However, if you are looking to transfer your home to your child or grand-child this significant increase in annual property taxes may be off-putting.

Introducing Propositions 58 & 193 (codified by Section 63.1 of the Revenue and Taxation Code):

These constitutional initiatives provide property tax relief for real property transfers from parents to children (58) and from grandparents to grandchildren (193). Essentially, Props 58 and 193  exclude these home transfers from reassessment which makes it easier (and more affordable) to keep property in the family.

This exception, however, is contingent upon certain conditions, namely that the proper application is filled out within 3 years of the transfer date. We want to highlight a few of the other requirements/stipulations of the propositions.

  1. Transfers of primary residences have no value limit. So, even if your home is worth $4,000,000 in the current market, your child may still pay taxes as if it is still worth the $450,000 you originally paid for it. It is important to know, your primary residence does have to have a Homeowners exemption recorded on title prior to the transfer to reap this benefit.  Note: The amount that is taxed can be increased by a maximum of 2% each year. Thus, the property tax may have increased since you first purchased the home.
  2. If you are transferring property that is not your primary residence, the first $1 million is exempt from reassessment. This means that while multiple non-residence properties may be transferred, the cumulative exclusion amount may not exceed $1 million. Note: The million dollar exclusion applies separately for each transferor. Thus,  there is a $2 million limit to property owned by an eligible married couple.
  3. Eligible children are defined as:
    1. Any child born of the parents
    2. Any stepchild while the relationship of stepparent and stepchild exists
    3. Any son-in-law or daughter-in-law of the parent(s). Spouses of eligible children are also eligible until divorce or, if terminated by death, until the remarriage of the surviving spouse, stepparent, or parent-in-law.
    4. Any adopted child who was adopted before the age of 18.
  4. An eligible grandchild for purposes of Proposition 193 is any child of parent(s) who qualify as child(ren) of the grandparents as of the date of transfer.
  5. Transfers by sale, gift or inheritance qualify for the exclusion. The person doing the transfer, who can only be the parent or the child, must own the home.
  6. Important note for Prop 193: The parent of the grandchild must be deceased as of the date of the transfer.

A little research could save your children or grandchildren a significant amount of money! However, we have worked with enough families to know that sometimes the worth of a family home is not just weighed in it’s market value, but in the memories and love it also holds. Make it easier to keep property in the family by taking advantage of Props 58 and 193.

Remember, the exclusion does not happen automatically. You must complete a “Claim for Reassessment Exclusion for Transfer between Parent to Child” (Prop 58) or a “Claim for Reassessment Exclusion for Transfer from Grandparent to Grandchild” (Prop 193) form within 3 years of the transfer. Copies of each form are attached below. For more detailed information, check out the sites below. Feel free to fact-check and let us know what additional facts you would have liked us to include.

http://www.boe.ca.gov/proptaxes/faqs/propositions58.htm

http://www.sfaa.org/mar2008/0803ogrady.html

*Real property is defined as any property that is attached directly to land, as well as the land itself.

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Congratulations to the Griggs!

By: Michelle Accetta and Lauren Weber

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We were so fortunate to have met the Grigg Family through our friend Heather Valentine,  aka @onefitmother, and had a hunch that if they were friends of hers they were going to be nothing short of amazing. Our instincts were right!  From the moment we met them they exuded the same positive energy that Heather has and we were instantly impressed with their parenting skills. With four little ones under their belt, they sure made parenting look easy!

One of the reasons we love what we do… we get to meet inspiring people like the Griggs. The Griggs family atmosphere was what really inspired us. Their family operates from a place of love. Amy and Nathan are such amazing parents, their children are inquisitive, bright and extremely well behaved (we think they should write a book – they really are that great). From our experiece with them, we saw that as parents the Grigg’s are always acting for what is best for their family and always looking to expand the minds of their children. A great example of this is at the close of escrow, Nathan held their one year old , Gwen, who wanted to touch the chandelier in the kitchen. From our experience, most parents would ignore the request or even scold the child for making it. Instead, Nathan let her touch the chandelier and explore what happened when she touched it. We can see from this short glimpse into their world that learning and growing is really supported in their home. We imagine each and every one of them to do big things in this world because of their supportive family atmosphere and the encouragement of curiosity and wonder!

It was a family affair every time we showed the Griggs a house and no one was left out. They packed up the kids, headed out, and always showed up with a cheerful attitude. Because the Griggs knew exactly where they wanted to live, what qualities they needed in their home, and what their nonnegotiables were, it made identifying a home for them very easy. They would apologized for being “picky” when they would immediately say “no” to a potential home, but knowing what they wanted made the search process quick. We assured them that being “picky” was a good thing, because it meant they knew what they wanted. Finding a home really is mostly a process of elimination and identifying your “must haves” and “nonnegotiables”.

Here are three tips to help identify your home quickly and efficiently:
1. Location, Location, Location!
If you are unsure of where you’d like to live, start driving around the different neighborhoods you are open to and eliminating the areas and streets you can not see yourself living in. This way when a home comes on the market you don’t waste your time  driving to the property, arriving to an area you know you would never live in and then contemplate a kitchen remodel when the whole thing is wrong from the start. Believe us  you will save your self precious time and energy this way. Visit the different neighborhoods at different hours of the day. If you can narrow down your ideal neighborhood first, you are in good shape!

2. Must Haves and Nonnegotiables
Make a list of your top three “must haves” or “nonnegotiables”. If there is more than one decision maker in the buying process be sure to have an open discussion about what these items are. You may be surprised at what is important to everyone involved, make no assumptions!  ie: can not be on a busy streets, close to the freeway, must have a large yard, must have a walk-in closet, can not have a death on the property in recent years, etc.

3. Are you willing to do work to the house?
Knowing whether or not you are willing to do work to the house is important in the beginning stages of your process. If you are open to doing work, set aside a budget so you know once  you view the home if the amount of work needed to make it what you want is worth the time and money.

Thank you again to the Griggs for allowing us the privilege of representing you in your home buying journey. It was great getting to know your loving family.

 

 

Neighborhood Spotlight: Kathy Burkholder

By: Cathy Strini

After meeting Kathy while out in the Golden Hills neighborhood, we were intrigued by both her and her line of work. Kathy’s Critters offers fun and educational zoology presentations for schools, birthday parties and other special events. From snakes to tarantulas to Madagascar hissing cockroaches, Kathy and her crew specialize in “misunderstood, but friendly critters”.  Former “Zookeeper” at the Insect Zoo, Los Angeles County Natural History Museum and Nature and Science Instructor for the City of Manhattan Beach, Kathy has years of experience working with reptiles, amphibians, arthropods. She has a degree in horticulture, but is always looking to learn more! Through conferences and research, Kathy works continuously to stay on the forefront of Entomology and to connect with other educated enthusiasts.

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Lauren, Kathy, Michelle

Kathy’s connection with her critters goes beyond the knowledge she has acquired through work and study. Even as a young girl she had a love for all bugs and reptiles!  When she was not out searching the gardens, she was inside teasing her siblings (and mother!) with her newly found “pets”. It was inspiring to hear first-hand how Kathy was able to create and grow a thriving business centered around her life-long passion. A true entrepreneur, Kathy has created a space to share her enthusiasm while educating others.  As a lifelong South Bay resident, Kathy has seen the area change tremendously and was able to share both some of her favorite memories and also how the community has helped foster the growth of her business. We love that we have neighbors who are actively working towards their dream careers, but still maintain a community-based mentality!

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Kathy and Jabba

We had a chance to meet some of Kathy’s little friends and to see her in action with them!

 

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(Left) Corn Snakes Hamlet, Ophelia and   Portia          (Right) Spike the Bearded Dragon

 

Kathy was kind enough to participate in a little Q&A session with us so continue reading to learn more about her:

1. Tell us about your experience in the “critter world” and how it led to starting your business.
 I have always been interested in the life sciences. In college (El Camino), I received my A.S. in Horticulture and took every Entomology class they offered.
 

I continue my education constantly by conducting my own research and attending annual educational Entomological conferences along with educators and scientists associated with institutions, universities, museums and butterfly houses from around the U.S. and abroad.

When I was a single mom with two children, I worked many jobs, sometimes two or three at a time. One of my favorites was as an Animal Control Officer at the Humane Society. I also worked at the Agriculture Department in pest control for projects such as the Mediterranean Fruit Fly and Japanese Beetle. While there (about 25 years ago), I was offered a position at the Los Angeles County Natural History Museum as the Insect Zoo Technician (“Zookeeper”) for the Insect Zoo. Part of my job required that I do outreach programs, travel to schools throughout the county, and give lessons and assembly programs on the live insects we brought to them. After one of my programs, a teacher asked me if I knew anyone who did the same type of program only with reptiles. I thought to myself, I have enough of my own, so I offered to bring some. Word-of-mouth spread, and Kathy’s Critters began.

Eventually, Kathy’s Critters became my only job and I’ve been doing it ever since (over 20+ years).

2. Introduce and tell us a little bit about three of your favorite critters.
 As everyone knows, a mother loves all of her children equally. With that said, I have a fondness for the animals I’ve had the longest time, and they hold a special place in my heart. They include two of my corn snakes, Ophelia and Portia, who are over 20 years old; Blue, my blue-tounged skink (a lizard from Australia) who is almost 20; and Worf, a California Desert Tortoise around the same age.
3. Give us a brief run-down of the experience that “Kathy’s Critters” provides at birthday parties.
 The birthday child will be the center of attention as he or she shakes hands with a tarantula, caresses a cockroach, “trains” a stink beetle to “play dead” and “roll over”, becomes a habitat for a tree frog, gets kissed by a lizard, wears a snake necklace (or necktie) and much more.  He or she will be the “Zookeeper and Animal Handler for a day”.

The birthday child will carry the animals and show them off to his or her friends.  Everyone will get to touch, hold or pet most of the animals (if they so desire). Free toy souvenirs are included for the kids and the birthday child will receive a nice gift.

– See more at: http://www.kathyscritters.com

 
4. Do you have any plans for further expansion of your business?
 I am working on a traveling walk-in butterfly house, which can be brought to events such as spring extravaganzas, garden parties, butterfly parties. I’m also going to offer Butterfly Gardening lectures to local nurseries and Garden Clubs. I can include the butterfly house with these lectures. I’ve been growing a butterfly yard for many years at our house in Redondo Beach (Golden Hills area) and neighbors will often stop in front of our house and comment on the number of butterflies in my yard. I have a lecture entitled “Build It and They Will Come” which I recently presented to the Lorquin Entomological Society. The majority of the photos in this presentation were taken in our yard, which only proves that no matter how small of a yard, you can still successfully build a butterfly garden.  I also do consulting on growing your own butterfly friendly garden.
5. How has living in the South Bay, Redondo Beach in particular, helped aid the expansion of your business?
 The people of the South Bay are great. Our neighbors could not be better. We are a very close community and our block gets together annually for a block party, for which we’re always out in the front driveway with the critters for the neighborhood children.  The award-winning schools are fabulous and are always welcoming to our critters.

The weather here is perfect. I can do my shows year-round without worrying that my critters will get frozen on the way to my car while I pack them. I know other people in different states who cannot do winter shows for that very reason.

 
 
6. As a life-long member of the South Bay community, how have you seen the area grow and prosper?
 Our family was one of the “early settlers” in the very newly built Bodger Park area of Hawthorne. We were one of the first families on the block. Manhattan Beach was our hangout and only a short drive away down a beautiful two-lane country road lined with eucalyptus trees; I think it was Rosecrans. My early memory is while my dad was driving, the car would fill with the aromatic scent of the eucalyptus seedpods over which we were driving. We would also drive to Dockweiler Beach and look at the farms and horses on the way. I also remember the drive-in A&W Root Beer stand on, what is now, the El Camino parking lot. Across the street was a dairy farm with real cows.

The South Bay has grown a lot since then.

 

**For $50 off one of a school or birthday Kathy’s Critters program, email Kathy@kathyscritters.com and be make sure to mention the Weber Accetta Group**

Congratulations to the Kaskanians!

By Michelle Accetta

We are so excited to congratulate the Kaskanian family on the purchase of their new Palm Springs home! For those of you who know me, (It’s Michelle… hi!), you know that I have grown up to become an “honorary” member of the Kaskanian family. I guess that’s what happens when you have been best fiends with someone (Kristen Kaskanyan) for over 15 years. Not to mention her family is full of the most generous and loving people I know, they have welcomed me as one of their own. Her “Ammo” (Uncle in Armenian) is my “Ammo” and her “Nene” (Grandma in Armenian) is my Nene. So when Kristen called and said Ammo, and her cousin Joseph wanted to buy a house we were excited to make things happen!

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Meher, Ammo, Seta, Joseph

 

“Growing up Kaskanian” there is one common theme and that is family. Family to them extends beyond blood to friends, employees, customers and so on a so forth (if you have ever been to Sam’s Auto Land you know what I am talking about… they run it). I was excited to work with them on a professional level. What I noticed was the family putting their values into action in yet another arena of life! Not a surprise at all to me, that who I know them to be. 

The Kaskanians’ have this special way of making everyone feel like family. I’m not sure if it’s directly linked to them always wanting to feed you, or just this innate ability instilled in them for years and years. I think it’s a little bit of both! This family has always been an example to me of how to treat people right (like family) and to be generous towards others. Saw that in a business capacity the Kaskanian’s hold true to how I know them, as people who treat everyone as family!

At the end of the transaction it really was a family affair! All of the parties involved really pulled together to get the deal done. In the end everyone wanted a piece of the family action… the listing agent asked us to dinner, the escrow officer invited Ammo to a Greek festival and tentative plans are on the books between us our lender!

Working with the Kaskanians in a professional capacity was a reminder of how much more fun our job is when everyone is “family”. The transaction was full of love, fun and contribution. We are excited to continue this into our transactions to come. Thanks Kaskanians!

 

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Joseph, Michelle and Kristen

Termites: What you didn’t know when it comes to your Real Estate Transaction!

By: Michelle Accetta

Let’s talk about Termites! Exciting right? Well, not really, but there are some important things to know about Termites when it comes to your real estate transaction (as either a buyer or a seller!). 

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First, let’s look at the termite report! Who is responsible for ordering it and what is on it? The person who orders the report depends on the contract. Buyers can specify on their purchase contract to have the seller order and deliver the buyer a termite report. In the contract, the buyer can request that the seller either use a specific termite company or allow the seller to choose the company. If the buyer has not specified anything in the purchase contract about the termite report, it becomes the buyer’s responsibility to have the home inspected by a termite company of their choice within their inspection contingency period outlined on the contract. Termite inspections typically range from $0-$85 depending on the company that is chosen.
 
After the inspection is complete, it is time to look at the actual termite report, more formally called the Wood Destroying Pest and Organisms Inspection Report. As real estate agents, we have learned a thing or two  about what to look for on this report, but we must tell you we are by no means experts on the report or on termites in general. However, due to our experience, there is a fair amount that we do know and we would like to share our insight with you. So, lets get started!
 
The first page of a termite inspection report typically looks like this:
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The top grid outlines a few things buyers and sellers should look for:
  • What type of report is this? Buyers typically are looking for a complete report. 
  • Another important section to note is the “Inspection Tag posted” and “Other Tags Posted” section. When a home is tented or termite work is done on a property, termite companies typically post a piece of paper called a “tag” somewhere in the home. The “tag” is most commonly found in the attic or garage and highlights the type of work done and the date completed. This is important as it is good to know how long it has been since the home was last treated for termites.
  • What type of termites are we dealing with here? Yes, there are more than one type of termites… who knew?! Well, the termite company did of course. They outline on the last line of the grid what type of termites were identified on the property. The goal of the termite work is to rid the home of termites (depending on the scope of the contract detailed with each different termite company). The report will outline how the termite company will remove and repair current damage caused by the termites. Remember, we are not termite experts so it is always best to contact a professional to get more information on each type of termite and the potential extent of damage cause by each kind.
 
Scrolling down… next, you will see the termite company’s interpretations of the subject property – using lines, arrows, circles and codes to identify the areas of termites and potential damage. This picture should be referred back to as one continues to read the report and the depicted “codes” are referenced.
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Getting to the nitty gritty! What exactly is happening with the termites at this property? Well, you won’t find it on the next two pages or so. That is usually boiler plate information on the scope and limitations of the report to protect the termite company. The good stuff doesn’t start till around page 3.
 
Here is where there are a lot of differences from company to company in how they organize the report, so we will talk about what you should be looking for overall. THIS IS THE SECTION TO READ! (We hope the all caps is helping). This will tell you what they found and what they are going to do remedy it. Some things you might see… drilling for subterranean termites, fumigation (yes, a tent is involved), cutting out damaged beams or other wood members and replacing them or filling them with wood filler. There can be an array of actions that termite companies recommend taking in order to eliminate the problem.
Here is a more recent page four just to give you a point of reference about what we are talking about here!
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We have some insight as to what to look for here.  Remember,  each report, termite company, and scope of work is different, but there are a few general tips on what to be aware of and what to look out for!
 
  • Section 1 and Section 2. What are they? Section 1 is the current work to be done on the property. Section 2 is any recommended on-going maintenance. It is standard that the seller performs the work recommended in Section 1, while the work in section 2 it taken on by the buyer. The work authorization portion will typically outline the work in section one and two along with the cost, as shown in the picture below. Termite page7.jpg
  • Primary work and secondary work. In some instances the termite company will suggest primary work and secondary work under Section one. In most instances we have seen this occurs when a home needs to be fumigated. The fumigation is typically outlined in the primary work and spot treatment in lieu of fumigation in the secondary work. Both will satisfy completion of the work in section 1. It is important, as a buyer, to outline in a request for repairs whether you would specifically like the primary or secondary work completed, and if Section 1 clearance can be issued by doing either the primary or secondary work.Termite page 6.jpg
  • Spot Treatment. Spot treatment can entail removing or replacing wood that has been affected or damaged by termites on the property. For example, spot treatment may be needed on a portion of the exterior fascia (material that covers the ends of roof rafters). What to be aware of here, is that the termite company will typically remove and replace the piece of wood and prime it back to white, but will not paint it back to its original color. In some instances, if the seller provides the termite company the original paint they might kindly return the spot treatment area to the original color. It is best that the buyer request the treated area be painted in their request for repairs to the seller, or anticipate having to paint at the close of escrow.
  • What was inspected? Does the house have fences? A deck or any other structure on the property? Some inspection reports solely inspect the primary structure, meaning that fences, decks, etc may be overlooked. However, home inspectors could still note termite damage on these structures if they notice it. A buyer can request the seller have the termite company inspect and remedy the termite damage on these other structures by referencing them on their home inspection report, or even having further investigations done by the termite company of those other areas.
  • Roof tiles. Who would have thought that roof tile would be important in the context of this conversation? Well, they are and can become a very large additional cost if overlooked. When a termite company goes to fumigate a property, especially one with roof tiles, tiles can be broken or damaged in the process. As a buyer, it is important to be aware of this and to include this tile repairs in the request for repair with the seller. As a seller, if your buyer has or has not requested, and  you do not want to be held accountable for the tiles, you can have the buyer sign off on an addendum or counter the request for repairs so that you will not be held responsible for any potential roof damage caused by the termite company.
  • Gas Shut off. The gas has to be shut off in order to tent a property for fumigation. This is important to know in the case that one is buying or selling a townhouse. In some cases the gas line to one unit might be connected to the other unit, meaning that if the one being bought or sold has the gas shut off then the neighboring units gas has to be shut off as well. This might become a hurdle as the neighbors have to agree to shutting the gas off when fumigation is occurring (typically for a duration of 3 days). It is best to try to work with the neighbor to accomplish this. Typically the termite company will have a secondary recommendation of spot treatment if fumigation is not possible.
 
That’s just a glimpse of some of the things you should look out for! If you ever have a question you can always calls us too!
 
And one last thing! Keep your termite paperwork!  Each termite inspection report or work completion has a guarantee for the work preformed. Typically a fumigation has a guarantee of 2 years and all other work has a guarantee of 1 year. This means that if termites are found at the property within those time frames the company will come back to remedy the problem (given each individual companies policy).You should check this on the contract or call the termite company and ask.
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It is important to choose agents who know their contracts, are familiar with how to negotiate a deal, and will always work in your best interest (like us!). So call the Weber Accetta Group today if you are interested in buying or selling at 310-387-4693 (Lauren Weber) or 310-293-1883 (Michelle Accetta!