Getting Schooled on RB’s Schools

While our beloved Redondo Beach is just over six square miles, the Redondo Beach Unified School District school district of consists eight elementary schools, two middle schools and one high school (as well as one continuation school and one adult school). But our residents are focused on quality, not just quantity! Over the past two years, seven of these schools were named”California Gold Ribbon Schools” while several others have been recognized by the Alliance for a Healthier Generation. High honors for our idyllic ocean-side community!

Elementary Schools: Alta Vista, Beryl Heights, Birney, Jefferson, Lincoln, Madison, Tulita, Washington

Middle Schools: Adams, Parras,

High Schools: Redondo Union

Not sure which school you are currently zoned for? Or interested in buying in a specific school district? Check out the district map below or try this interactive version for a simplified way to determine which school territory your home is located in.

Wondering why our schooling systems are so effective?

The Redondo Beach School System is financially supplemented by two contributing organizations: the Parent Teacher Association (PTA) and the Redondo Beach Education Foundation (RBEF). There is frequently confusion regarding the differences between these two organizations, but the RBEF and the PTA play clears roles in their over-arching purpose to fill the gap between the state provided school funds and the actual operating costs of each classroom. One of the largest children’s advocacy organizations in the US, the PTA pays for school and site-specific needs (ex: field trips and classroom enrichment programs). The Redondo Beach PTA has more than 8,000 members and runs an annual membership drive. Incredible to see such a huge cumulative effort to make education one of the pillars of our community!

Alternately (but just as importantly), the RBEF’s focus is on funding the salaries of the individuals that are needed to teach the varying programs that are in place in each school throughout the districts. RBEF works to maintain the high quality of education offered at each of Redondo Beach campuses by providing living wage salaries for music teachers, science teachers and all specialized instructors.

All of the changes and developments in Redondo Beach schools can be followed by “School News”- a monthly newsletter to promote the news of the district and each of the schools. While print copies of each issue are distributed to the elementary school students, to teachers and staff in all schools and to select business locations, you can also access the newsletters online. Check out the February 2017 Edition to learn more about the role of the RBEF, 2017 kindergarten enrollment and much more!

As a Redondo Beach resident, your children are guaranteed a space in kindergarten at your home/ neighborhood school – so be sure to take advantage of living in the award-winning Redondo Beach Unified School District and get enrolled!(side note: next Fall marks the enrollment of the class of 2030!)

Timing Your Home Sale

As many of you have probably learned, the timing of a situation can be everything! When it comes to selling your home, it is wise to take go over the following questions and develop a timeline that works for your family’s unique needs:

• How long is it going to take you to get your home ready to be put on the market?
• How long is your home going to be for sale?
• How long of an escrow should you negotiate?
• How long will it take you to find your new property (whether buyer or selling)?
• How long does it take to actually move?

Questions on how to best time the sale of your home?
Contact us!  info@weberaccetta.com
Lauren: 310-387-4693 and Michelle: 310-293-1883

 

A Groundhog’s Real Estate Predictions

With the dawn of February, comes the advent of a momentous tradition that dates back to 1887 – Groundhog Day.

Featuring a rodent meterologist, this day was first celebrated in Punxsutawney, Pennsylvania and has roots in roots in the ancient Christian tradition of Candlemas Day, when clergy would bless and distribute candles needed for winter. According to tradition, if a groundhog comes out of its hole on this day and sees its shadow, there will be six more weeks of cold winter weather. Tradition also states that an early spring is indicated if the groundhog does not see its shadow.

Here is to hoping that Phil the Punxsutawney groundhog, does NOT see his shadow tomorrow, when he emerges to predict the next few months of weather.

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Like Phil, we have a few predictions about how the real estate market will behave over the next few months.

Unlike Phil, we have done research and are not scared of our own shadows.

Based on our research, here are a few things you can (most likely) expect over 2017:

• While 2016 saw record-low rates, mortgage rates have begun to rise following the election. Experts predict that rates will climb by half a percent over 2017.

• According to predictions by  Joe Kirchner, senior economist at Realtor.com, millennials and baby boomers will dominate demand in the housing market will millennials making up 33% of the buyer pool and baby boomers representing another 30%. This prediction is expected to hold true for the next decade.

• However, as more “first-time buyers” (millennials) seek out their first homes, the available inventory is expected to continue to drop in 2017. Which inventory already down an 11 percent in the top 100 metros in 2016, this means that home buyers will have even fewer choices.

• Kirchner further predicts that the West will outpace the rest of the country in real estate action, with home prices in Western cities increasing 5.8% and sales increasing 4.7%.

• According to Zillow’s chief economist, Dr. Svenja Gudell, new construction projects will also be hit with higher costs. In Zillow’s 2017 Market Predictions, she argues,

“Buyers of new homes will have to spend more as builders cover the cost of rising construction wages, driven even higher in 2017 by continued labor shortages, which could be worsened by tougher immigration policies under President-elect Trump.” 

• There are some positive expectations in place as well. Gudell predicts that as incomes rises and rent appreciation slows, rental affordability will improve. Her argument is supported by Urban Land Institute’s October 2016 Real Estate Consensus Forecast, which noted that apartment rental rate growth is expected to moderate to 3.0 percent in 2017,  but remain above the 20-year average growth rate of 2.8 percent.

 

 

 

How To Rock Your Request For Repairs

A typical Residential Purchase Agreement contains an inspection contingency that allows for the buyer to inspect the property, review the reports and present a request for repairs to the seller. If the buyer is unsatisfied with the agreed upon repair list he or she can choose to cancel the deal and have their deposit returned. A request for repairs may ask for a detailed list of work to be done and/or a credit amount to cover the cost of the repairs.

While some buyers feel that opting to waive the inspection contingency will give them a better at getting their offer accepted, we always advise buyers to opt to have the property inspected. While general home inspections cost several hundred dollars and are paid by the buyer, they could save the buyer a large amount of money in the long run. It also helps to educate you on the overall condition of your home and the condition of its systems.

Your home inspection will inevitably point out some problems with the property – no matter if it is brand new or 25 years old. Your home inspector will check that the main appliances and main systems (plumbing, heating, electrical, etc) are safe and operational. They will also check to see if there are any health and safety issues that might be a problem with the specific property. Pending the results, the general inspector will recommend additional inspections from a specialist (such as a roofing or foundation expert) and/or a list of necessary repairs. Most home inspectors have years of experience and should be able to identify what is problematic and needs to be addressed immediately, as well as what will need maintenance in the near future.

At this point, you will need to generate a list of requested repairs or credits to present to the seller. This part of the escrow process requires negotiation and strong communication between both the agents and their respective parties. Thus, when deciding what issues or problems to put on your list it is helpful to consider how the seller might react – while you may feel that you are entitled to put everything the inspector recommends replacing, this is a key example of “picking your battles”. You may an extensive list, but it is best to get the list down to the most crucial items and be willing to let the minor things go.

Generally, it is a good idea to stick to health and safety items, as well as any damage that could adversely affect the structural integrity of the home over time. A few items of real concern are: cracks in the chimney, foundation cracks or a damaged roof.

As a buyer, you should be absolutely be persistent on ensuring that your future home is up to par, but you should prepared to take on some of the responsibility of the repairs. After all, you do not want to the deal to fall apart or get drawn out because you cannot come to an agreement as to which party will fix a few cracked floor tiles.

The best way to ensure that you get the most from the seller is to present estimates of the actual cost from contractors. While this may require more effort on your end, doing this gives the seller concrete proof of the price work that needs to be done and gives them little wiggle room.

Another thing to keep in mind when crafting your request list is the sale price of the home. If you were able to secure the home way below asking price, you should consider being a bit more lenient on your list. If you paid full price, you will have more wiggle room to include more requests, but remember that it is very rare to have the seller agree to all the requests right off the bat.

Most importantly, lean heavily on your agent during this whole experience! Remember, we are negotiation specialists and have gone through this process many times. We know the importance of being flexible, but also when to stick to our guns and fight for our clients and their wants. In the end, our job is to ensure that you get the best deal and that you feel 100% confident moving forward with closing on your new home!

Con’s of Contingent Offers

Looking at a real estate purchase agreement can be overwhelming…Even the name of the contract is an unnecessary mouthful (Residential Purchase Agreement and Joint Escrow Instructions). Each page is full of confusing terms & dense explanations. One area of a contract that a majority of people have trouble comprehending is the “contingency clauses.”

According to Investopedia: “A contingency defines a condition or action that must be met in order for a real estate contract to become binding. These becomes part of a binding sales contract when both parties (i.e., the seller and the buyer) agree to the terms and sign the contract.”

Basically, a contingency is generally put into a contract as a way for the buyer to back out of a sale if something goes wrong  without losing their full deposit.

There are two main kinds of contingency clauses within a Residential Purchase Agreement there are :

1. Appraisal Contingency: This requires hiring a third party to determine the current fair-market value of the home. If the appraised value is lower than the sale price, the buyer is given the option to cancel the deal. Buyers still have the option to move forward with the sale , but should remember that a lender will only provide money based on the APPRAISED COST, not the agreed upon sale price. You could also chose to waive this contingency entirely when writing an offer, but this could drastically raise the amount you pay out of pocket.
2. Home Inspection Contingency: This allows the buyer to have the home professionally inspected and then, based on the inspection results, to request repairs to be made by the seller. If the seller refuses to make the requested fixes, the buyer is given the option to back out of the sale. A good home inspection looks for major issues (such as foundation problems or mold), but also examines the functionality of the home’s major systems (such as water heaters). Again, a buyer could choice to waive this contingency clause but we generally do not suggest it.

 

It is important not to confuse these contingency clauses with a contingent offer!

 

A contingent offer is an offer that is reliant on the sale of your buyer’s home. Generally speaking, contracts contingent upon the buyer’s sale of his home do not even enter escrow and or being inspections, appraisals, etc until the buyer actually sells his/her home. We suggest caution when it comes to accepting a contingent offer for a few reasons:

1. Once you accept a contingent offer, the MLS will require your to change the status of your listing.. meaning that it will be listed as “pending” or “contingent”rather than “active”. While this does not completely remove your home from search sites, it will limit it’s visibility or marketability. Buyers and agents are less willing to take the time to see or make offers when a home is not 100% available, which makes it more difficult to line up a back-up buyer.
2.   It is stressful  enough worrying about selling your own home.. but accepting a contingent offer means that you are now dependent on the sale of second home. You also have no say in how this home is marketed or how proactive the owner’s/owner’s agents are being. This scenario could increase your stress level, drag out the sale of your home and culminate in a frustrating outcome.

However, there are exceptions to the general rule.. and each situation must be evaluated individually. For example, if the buyer’s home is in the last stages of escrow then accepting their contingent offer is a much lower risk. It might be worth considering if it is your only offer OR if their offer is significantly better than any other offer you have.

In general though we suggest to avoid contingent offers by asking the buyer to remove the sale contingency and replacing it with a longer escrow. This gives the buyer more time to sell their home, but compensates you for your time by allowing you to keep their deposit. If the buyer is unwilling to do so, you could always suggest that the buyer resubmits an offer once his or her home is sold.

 

Title.

 

In California, title to real property may be held individuals in either Sole Ownership or in Co-Ownership (when held by two or more persons). In each instance, there are a number of variations as to exactly how title may be held. In this blog, we will discuss 8 of the most common situations.

 

1. Title may be held as a single man or woman who is not legally married
2. You may hold title as an unmarried man or woman. This is different from holding title as a single man/woman because it refers to someone has has been legally divorced or who has dissolved a registered domestic partnership.
3. If a married man/woman or a registered domestic partner desires to hold title in his or her name alone, he or she may do so with consent from the spouse/partner. Consent is given through a quitclaim deed that relinquishes all right or interest in the property. Thus, it is possible to hold sole and separate property, even if legally married.
4. As defined in the California Civil Code, community property is property that has been acquired by either a husband or wife. When real property is conveyed to a married man or woman (or those in a domestic partnership), it becomes community property unless otherwise specified. This gives both spouses the right to dispose of exactly half of the property. If one spouse was to pass away, their half of the community property would automatically transfer to the surviving spouse. However, it is possible to leave one’s share of the property to a third party via a will.
5. The Civil Code defines joint tenancy  as “owned by two or more persons in equal shares, by title created by a single will or transfer when expressly declared in the will or transfer to be joint tenancy.” Each share is equal. This style of holding title is made unique by the “right of survivorship” which declares that when a member hold joint tenancy dies, his or her interest in the property is automatically given to the survivor. A major advantage is that probate costs and delays are avoided when a joint tenant dies. However, it is important to note that property held in joint tenancy is not susceptible to being transferred to a third party by a will.
6. Similar to joint tenancy, tenancy in common occurs when co-owners hold undivided interests, BUT these shares do not need to be equal or established at the same time. Another difference is that there is no right of survivorship, meaning that upon death each person may vest his or her interest to an heir.  A disadvantage to this is that the remaining tenant in common could wind up co-owning property with a stranger.
7. Married couples and domestic partners have the ability to hold title as community property with right of survivorship, meaning that no share of the property may be given to anyone other than the surviving spouse or partner. This must be specified in writing that is signed by the grantees.
8. Lastly, title to real property may be held in a living trust. In this scenario, a trustee would hold the legal and equitable title to the property for the beneficiary who is to retrain all of the rights and responsibilities. There are many advantages to a living trust, including avoidance of probate costs and delays. Further, until the death or disability of the trust creator, the property in the living trust is treated normally.

This chart from Fidelity helps to clarify:

 

As a home owner, it is essential to not only familiarize yourself with the various ways to hold title, but also to be certain as to how you are holding title to your real property.

This knowledge is important because it may influence many tax and legal consequences during your life time and how (and whether) the property is transferred to your heirs when you die.

There are significant tax and legal consequences that stem from how you hold title. We strongly encourage contacting an attorney and/or CPA for specific advice on how you should actually vest your title.

 

 

STOP in the name of Low Mortgage Rates

Seriously, stop what you are doing.

BECAUSE, low mortgage rates = amazing opportunities for buyers, sellers, or homeowners looking to refinance!

While rates on mortgages change daily, they are currently holding steady at near record lows. In fact, according to the Bankrate.com rates have not been this low since December 2012!  The graphic below demonstrates the drop in rates from just last week.

Both 15-year and 30-year mortgage rates are down more than 0.5% since the start of the year.

What does this mean for buyers?

This drop in rates means that those looking to buy have experienced a purchase power increase of 7%…meaning that buyers who could afford an $800,000 home in December can now afford an $852,000 home!  For many on the house-hunt, this increase in purchase power could put their dream home just in reach!

What does this mean for sellers?

Lower mortgage rates translate to a surplus of buyers looking to take advantage of their higher purchasing power; which means you, as a seller, have the ability to get top dollar for your home! More active buyers are out looking increases the desirability of your home.. making it a hot commodity.

What does this mean for refinancers?

Refinancing gives a homeowner access to a new mortgage loan which replaces the existing one. The details of the new loan’s mortgage rate, loan length in years, and amount borrowed can customized by the homeowner. Thus, refinancing during a period of lower mortgage rates could benefit borrowers by lowering their monthly housing payments and/or shortening the term of their mortgage.

For a personalized rate, check out this helpful site: http://themortgagereports.com/ratequote/

Remember: Mortgage rates change quickly and there is no guarantee that these rates will last. Whether you are a seller or a buyer, it is time to take advantage of the current market!

R E A P – Find Out What It Means To Me .. & You!

Ever been scanning across apartment listings in LA and been confused by the statement “Property in REAP. Looking for an all-cash buyer”? You are not alone. Read on for a brief synopsis on the program and whom it affects.

What exactly is REAP?

The Rent Escrow Account Program has been established by the City of Los Angeles and exists to resolve health, safety and habitability issues found in rental properties. It essentially functions to protect tenants from unsound housing, while also preserving the value of LA’s properties and housing developments.

 

How does REAP work?

Rental properties and units get placed in REAP if they do not correct cited health, safety and Housing Code violations within the allotted time. This placement may be appealed by the landlord, but once the decision to put a property into REAP is finalized a rent reduction is put in place. Based on the severity of the violations, the reduction may be between 10% to 50% of the monthly rent.

The tenant may continue to pay the reduced monthly rate to the landlord or he or she can opt to send the payments to an escrow account established by the Housing & Community Investment Department of Los Angeles (HCIDLA).

Tenants will be alerted that their rental property is in REAP via mail or by a visit from one of REAP’s outreach counselors. An outreach counselor is assigned to every case and is accountable for educating the tenants and the landlord on their respective rights and responsibilities within the program.

 

How is the property owner affected?

Once a property or unit is put into REAP, the HCIDLA also records a notice on the property’s title. This notice alerts potential buyers and their lenders, that there is a problem with the property.. which means that no one will lend to the owner or attempt to buy the property using a loan – this is why REAP properties are required to sell for cash. The owner is also charged a monthly administration fee of $50. Owners are further negatively impacted by spending more money on repairs while simultaneously being required to lower rental rents.

How does a property get taken OUT of REAP?

 A property remains in REAP until the HCIDLA can verify that the violations have been  resolved and that all the issues have been signed off on by a Department inspector.  Once the HDICLA confirms that Los Angeles Department of Water and Power bills have all been paid off, the City Council will evaluate (and most likely) approve the property’s removal from the program. Tenants will be alerted by mail that the property has been removed from the program and that required rent has been reverted back to it’s normal rate. It is important to note that if a tenant has been paying rent through an escrow account that they are required to return to directly paying his or her landlord.

Know your responsibilities as a land lord so REAP does not happen to you, as well as your rights as tenant when it comes to the quality of your rental property.

For more information on the Rent Escrow Account Program, check out the HDCILA’s info page: http://hcidla.lacity.org/what-is-reap-for-renters

Probate Sales: Knowing the Perks & Risks

If you are an active real estate buyer, or even just a curious browser, you have undoubtedly encountered a probate sale. While a probate sale generally means that the cost of the property is lower it can also mean a trickier and longer process than a normal sale. As such, it is necessary to familiarize one’s self with the system and to know what to expect.

Overview of  Probate Sales:

A probate sale is used when a homeowner dies without leaving a will or without directly bequeathing the property to someone. Essentially, the state takes over and oversees the sale of the home.

While probate sales generally mean lower prices, it is important to note that there is a minimum value that must be met: the property must sell for at least 90% of its appraised value. Further, the court ensures that the home has been properly listed, marketed and appraised to guarantee that it is sold at a fair market price.

When it comes to making an offer, a 10% percent deposit is generally required. (This is due to the Court requirement of 10% at the confirmation hearing.) Similar to a normal sale, the representative of the estate will then review the offer and accept or counter it.

However, unlike a normal sale, acceptance does not mean the immediate opening of escrow. The offer is still subject to the court’s confirmation and it’s acceptance does not fully commit the seller to the buyer. It is not until after all contingencies are removed that the court may be petitioned to confirm the sale.

After confirmation from the court, the attorney must post a Notice of Sale -an ad stating their intention to sell the home and calling for anyone who thinks they are a beneficiary to come forward. In California, the law requires that a Notice of Sale is published in a newspaper from the same county as the property. The ad must run three times at least 10 days before the sale. 

After the notice has been run and no beneficiary has turned up, a court date is requested. The court date could be set immediately or several months out…Then starts the waiting game.

During this waiting period, notice of the sale as the date and location of the hearing must be marketed.

When the court date arrives, the listing agent, plus any other interested party, is required to attend. At the court proceeding the property is subject to an overbid scenario wherein another buyer can come in and purchase the property contingency free on the spot. According to California real estate law, the minimum overbid amount must be 10% over the price that was accepted initially. Anyone wishing to bid, is required to bring a cashier’s check, made out to the Estate, for this amount.

If there are no bidders, the original contract is confirmed and the buyer gets the property for their original contract price.

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As you can see, probate sales are not a cut and dry deal. They can turn into long drawn out affairs that can result in you spending a lot of time and resources just to have your offer outbid at the court hearing (worst case scenario!). However, working with an experienced and knowledge agent can help increase your chances of securing a home at a lower price (best case scenario!)

A probate sale can be a savvy way to secure an investment property or even a new family home. Just be prepared to patient and make sure that you have housing arrangements in the meantime!

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Note: One of the main risks when it comes to probate sales is the limited disclosures requirement. In most cases the owner is deceased (it is also possible that he or she is incapacitated) and the court-appointed representative has never lived in the home, meaning that there may limited insight into the condition of the home and it’s systems. Therefore, it is essential that the buyer fully investigates the property and has the home inspected. It is also a good idea to check the public record.

*As a homeowner, make sure that you have a will clearly naming your beneficiaries to avoid the stress of you home entering the probate sale process*

 

Rent-Back Agreements and How They Work

One qualm that often holds homeowners back from selling their current property and moving into their dream home is that they will sell their home before securing a new one. Considering Southern California’s hot real estate market and how quickly homes are being sold, we recognize that this is a valid concern.  Buying a home is a huge decision.. and not one that anyone wants to make under the pressure of becoming homeless!

However, several options exist to help ensure a smooth transition period  for both buyers and sellers. One alternative that we have found to be mutually beneficial for both parties is the rent-back agreement – this essentially allows the sellers extended time in the home by making them the new owner’s tenants after escrow closes. While this agreement comes with a time limit designated by the buyer, it gives the seller extra time to get things squared away with their new home. It also eliminates the need to deal with storing their belongings or finding an interim place to live! For the seller, this is a more secure option then simply extending escrow as it removes the risk that the escrow will not close and it also gives him/her access to the money from the sale.

The rent-back agreement is advantageous to the buyer for two main reasons:

1. If there are several competitive offers on the home, it may make the buyer’s offer stand out and help ensure it’s acceptance.
2. The rent charged to the seller may help to recover closing costs – or at least lower the overall cost of the move.

Note: While it is technically up to the buyer to determine how much the cost of rent should be, it is typically the equivalent of the buyers’ principal, interest, taxes and insurance on a prorated basis. Thus, the seller will essentially be paying the buyer’s mortgage for the amount of time they will be occupying the home.

It is important to note that rent-back agreements are legally binding agreements made in writing so it is essential to maintain clear communication concerning your needs (whether you are the buyer or the seller!). Be sure to agree on the exact date that the seller is expected to move out, as well as the amount of rent the seller will pay.

Overall, the rent-back agreement offers the seller some breathing room and peace of mind when it comes to finding a replacement home, but also proves beneficial for the seller. As long as the kinks are worked out and both parties are willing to participate, this option is an ideal solution for those who are looking to relocate into their dream home!