Is it a good idea to list your home during the holidays?

The holiday season is typically not peak listing time for real estate. But the current situation, namely a super-low supply of homes coupled with great demand, is not typical. Usually, there are fewer buyers than, say, in May or June, meaning that homes tend to take longer to sell during the holidays. So sellers often wait to list until spring. But this year is one like no other.

Holiday Listing

It might be time to list your home this holiday season. Here are four reasons why.

1. A low supply of homes

Usually there are fewer homes for sale during the winter months anyway, but in our current market, inventory is already at historic lows. So homeowners who want or need to sell during the 2021 holiday season probably won’t have too much competition, which puts them in the driver’s seat.

2. Homebuyers are more serious

Although there are also typically fewer buyers during the holidays, it’s still very much a seller’s market right now. And of the buyers who are looking during the holiday season, many are serious about making an offer and not just looking, particularly those who’ve been trying to purchase for months and have lost out in the bidding wars that often break out when new properties come on the market.

Buying a home unmarried?

Buying a home unmarried? What to know before signing the deed

Buying Home Unmarried Donna Chabrier Realtor

There’s a growing number of unmarried couples buying homes together, and without proper planning the move may create future problems.

Indeed, 9% of home buyers were unmarried in 2020, according to the National Association of Realtors. While younger millennials, ages 22 to 30 years old, represent 20% of unmarried purchasers, acquiring property as partners is a cross-generational trend.

“It’s happening across the board, and everybody needs to be careful,” said Sheryl Dennis, estate planning attorney at law firm Fields and Dennis LLP in Wellesley, Massachusetts.

That’s because co-buyers have fewer protections and may face legal issues if the relationship sours or one partner dies unexpectedly, experts say.

Applying for a mortgage

For most buyers, financing is the cornerstone of purchasing a home, and the process is more complicated for unmarried couples.

“For anyone buying a home, the first step is always pre-approval,” said Melissa Cohn, regional vice president at William Raveis Mortgage in New York, explaining how the step prompts couples to discuss applying for a joint mortgage, property titling and other critical decisions.

While combining high incomes, excellent credit and low debt may boost the chances of mortgage approval, a less creditworthy borrower can hurt the application, she said.

“Banks will always take the lower of the middle [credit] scores for the unmarried couple,” Cohn said. “So if one has a score below the optimal number required for the loan they are seeking, it could impact the rate and how much they can borrow.”

Property title

Another big decision is how to title the property, which stipulates each partner’s legal rights and ownership, and determines what happens to the home if one partner dies.

“The first question I ask is, ‘what happens when everything falls apart?’” said Matthew Erskine, a Worcester, Massachusetts-based estate-planning attorney at Erskine & Erskine.

While sole ownership grants rights to one person, joint tenancy with rights of survivorship is equal ownership, automatically passing to the other owner when one partner dies.

The third choice, tenancy in common, may be appealing when one partner contributes more because it represents an unequal interest in the property, Dennis said.

However, partners won’t inherit each other’s portion of the property by default, and they may need to specify preferences in a will to determine who receives their share.

Other solutions for additional control may be putting the home into a trust or creating a business, such as a limited liability corporation, Erskine said.

Of course, property laws vary by state, so it’s essential to speak with a local estate planning attorney before making a titling decision.

Property agreement

Regardless of the titling, experts also suggest a property agreement, outlining how much each partner paid for the down payment, home repairs and other expenses.

The contract should also cover how to divvy the property in a break-up, including buy-out provisions, depending on what the couple wants, Dennis said.

“It’s very much a business relationship,” Erskine added.

Plan for the ‘worst-case scenario’

As partners consider a joint home purchase, they may wonder if the decision is a good move, and the answer varies based on each situation.

“It’s really up to the individuals and no one else,” said Douglas Boneparth, certified financial planner and president of Bone Fide Wealth in New York, explaining the choice may or may not make sense, depending on the couple’s goals.

While buying property unmarried requires extra steps — such as planning for the “worst-case scenario” — partners need to weigh the pros and cons like any other financial decision, he said.

“It’s perhaps a little bit more involved, but none of this is weird or odd or abnormal,” Boneparth said, and the trend may continue as couples’ stances on marriage evolve.

Article from Advisor Insight |CNBC. Written by Kate Dore, CFP published online November 5, 2021.

Credit Scores for Homebuying

Minimum Credit Scores

Credit scores are crucial to the homebuying process. Not only does your FICO score determine if you can qualify for a loan in the first place, it will also have an impact on your mortgage terms. Your credit will affect getting the type of loan that will fit your family budget. You should also plan ahead in getting credit card debt paid down and correcting any inaccuracies in your credit report.
What credit score is needed to buy a house? Learn more at: https://bit.ly/CreditScore2Buy

Non-Contingent Offers Quick Guide

NonContingentOffer

In our hot Seller’s Market, we’re seeing a lot of Non-Contingent Offers from Buyers. What does that mean? Well it means that Buyers are at risk for losing their deposits or even paying damages if they decide not to purchase after an offer is accepted. Even Sellers should be cautioned about this strategy which leaves Buyers feeling powerless during the purchase process and may be more likely to become disgruntled after the sale. Here is a link to the California Association of REALTORS that will provide you with more information about the risks and rights with non-contingent offers. You can also download this QUICK GUIDE.

Above List Price = New Norm in Sacramento Housing Market

As reported in the June 11 issue of Sacramento Business Journal,  properties throughout the Sacramento region have sold, on average, 4% above their original list price, according to Metrolist data and local appraiser, Ryan Lundquist. For example, in Roseville buyers paid $32,182 over list price on average whereas Rocklin is $22,238 over list.  This data justifies the recommendation that homebuyers need to factor this “over-list” percentage into their home-buying budget as they are investigating properties and outlining offers.

June 2021 Sellers Market

For the full article, click here. 

5 Myths About Real Estate Reality TV Explained

March 2021 Reality TV

Have you ever been flipping through the channels, only to find yourself glued to the couch in an HGTV binge session? We’ve all been there… watching entire seasons of “Love it or List it,” “Fixer Upper,” “House Hunters,” “Property Brothers,” and so many more, just in one sitting.

When you’re in the middle of your real estate themed show marathon, you might start to think that everything you see on TV must be how it works in real life, but you may need a reality check.

Reality TV Show Myths vs. Real Life:

Myth #1: Buyers look at 3 homes and make a decision to purchase one of them.

Truth: There may be buyers who fall in love and buy the first home they see, but according to the National Association of Realtors the average homebuyer tours 10 homes as a part of their search. 

Myth #2: The houses the buyers are touring are still for sale.

Truth: The reality is being staged for TV. Many of the homes being shown are already sold and are off the market. 

Myth #3: The buyers haven’t made a purchase decision yet.

Truth: Since there is no way to show the entire buying process in a 30-minute show, TV producers often choose buyers who are further along in the process and have already chosen a home to buy. 

Myth #4: If you list your home for sale, it will ALWAYS sell at the Open House.

Truth: Of course this would be great! Open houses are important to guarantee the most exposure to buyers in your area, but are only a PIECE of the overall marketing of your home. Just realize that many homes are sold during regular listing appointments as well.

Myth #5: Homeowners make a decision about selling their home after a 5-minute conversation.

Truth: Similar to the buyers portrayed on the shows, many of the sellers have already spent hours deliberating the decision to list their homes and move on with their lives/goals.

Bottom Line

Having an experienced professional on your side while navigating the real estate market is the best way to guarantee that you can make the home of your dreams a reality!
If I can help you, a friend, neighbor, family member, or colleague with a real estate transaction, it would be my pleasure.

Assumptions

Assumption_Donna Chabrier Realtor

Have you ever thought that your communication preference works for everyone? Do you immediately pick-up the phone for a quick call, head straight to email, or is texting your go to? Our communication assumptions come from an overload of options both “old school” and “new school”. Sometimes it’s our need for an immediate response or to get it “on the record”. I’m working towards asking clients and business partners, “How do you prefer we stay in touch and extend updates? Is email okay or would you rather I call or text? I’m good with whatever works best for you.” #assumptions #justtextme #givemeacall #sendanemail

Proposition 19

Prop 19

Understanding how Proposition 19 affects property tax implications tied to your property transfer is an important consideration when buying or selling a home.

Starting April 1, 2021, homeowners who are 55 or older or those who lost their home in a natural disaster are allowed to transfer the taxable value of their primary residence to a new home in California. If you purchase a more expensive home, the tax bill will go up but by a lower amount than for other buyers.  This kind of tax transfer can be done three times and homeowners have two years to sell their current home and buy a new one.

The prior rule limited this exemption to a one-time transfer within the same county or between certain counties and only if the replacement property was of equal or lesser value.

Can my client buy/sell now and take advantage of the tax portability benefits before April 1, 2021?

If you wish to obtain the tax benefits of Prop 19 for a transaction that closes before April 1, 2021, whether it is buying or selling a property, I would recommend speaking to a qualified California real estate attorney.

If the replacement property is of equal or lesser value, does the tax basis of the replacement property change?

No. The taxable value of the original property may be transferred and become the taxable value of the new one.

If the replacement property is of greater value, how is the new taxable value calculated?

The new taxable value is calculated by adding the difference between the full cash value of the replacement property and the original property to the original taxable value. For example, if a seller of an original property has a $300,000 taxable value and a full cash value of $1M and then buys a replacement property for $1.5 M, the taxable value of the replacement property would be $800,000.

Can a replacement property be purchased prior to the original primary residence being sold?

Yes. This is how the current rule under Prop 60 works and Prop 19 uses nearly identical language.

How does Prop 19 affect the rules on intergenerational transfers to children or grandchildren?

Prop 19 eliminates the ability for a home to pass from a parent to a child or a grandchild without reassessing the home value unless it’s the child’s or grandchild’s primary residence. If the child or grandchild doesn’t live in the inherited home and instead chooses to rent it out, the tax value can be re-assessed. Right now, family members can transfer a home and the property value won’t be reassessed. They can also transfer other rental or commercial properties and exempt up to $1 million of the assessed value.

If the property is more than $1M over the original tax basis, what is the new taxable basis?

The new taxable basis will be the assessed value of the property at the time of transfer minus $1M.

When do these new rules on intergenerational transfers apply?

The new changes to property transfers among family are set to begin on February 16, 2021.

Where may a claim to transfer a tax basis be made?

Claims may be made with forms provided by the local county assessor’s office.

Source:  California Association of REALTORS®

Collect Moments

Collect Moments_Donna Chabrier Realtor

It’s a reflective time of year, right? We look back at the previous twelve month’s highlights, challenges, and moments that created a shift in our perspective. In this cute book, “Present not Perfect”, it suggests that you revisit your childhood by: driving by your childhood home, listen to a song you loved as a kid, watch a home video, or flip through old family photos. Whatever you choose, I hope your memories bringing you JOY!

Strategies for Buyers in a Seller’s Market

As many Buyer’s have come to experience in this frantic real estate market throughout the Sacramento region, it’s a TOUGH time for Home Buyers.  Most listings are getting multiple offers, well over list price, and with Buyers coughing-up the payment of most,  if not all,  escrow and title fees. But don’t get discouraged!  I’ve been successful with a number of Buyers in getting them well-prepared going into negotiations which has brought them success.

Here’s what I recommend to my clients:

  1. Have a current pre-approval letter from a local lender.
  2. Get copies of your bank/investment statements to serve as proof of funds for your earnest money deposit and down payment.
  3. Write a personal letter about your family and what you appreciate about the home.
  4. Search for homes that are 1-2% below your maximum budget so that you can offer above-list price and still stay within your pre-approved loan amount.
  5. Evaluate the standard costs that Sellers & Buyers regularly pay within each county and agree to pick-up whatever cost you afford.  This can often be a differentiator as it affects the Seller’s Net Sheet.
  6. If you need additional funds for closing costs, consider offering ex: $5,000 over list price but request that the Seller provide “a $5,000 credit toward recurring and non-recurring closing costs.”
  7. Review the standard contingency periods and shorten them to provide a sense of urgency (and security) to the Sellers. NOTE:  Be sure to discuss the appraisal and loan contingency dates with your Lender.
  8. Have your Realtor and Lender each call the Listing Agent to “pitch” your offer.

SALE PENDING: After losing out on their first house to multiple offers well-over list price, we found, and got into contract on an even better home for Nick, Nicole and Amelia. Relocating from Louisiana to Beale Air Force Base they couldn’t be happier with this spacious, like-new home in Lincoln. I showed the house via virtual FaceTime tours + inspections with family members but they finally got to see the house first-hand on Sunday (I was a bit nervous that they wouldn’t like it).