Backyard revolution -ADUs

For California homeowners, ADUs (Accessory Dwelling Units) may be another means of generating income. Please check the links below for more information.

What is the new law for AB 1033?

Signed into law on October 11, 2023, AB 1033 allows property owners in participating cities to construct an ADU on their land and sell it independently, following the same regulations that apply to condominiums. This offers homeowners more building options and aims to promote homeownership.

 ADUs Can Now Be Sold Separately In California

NOTE:  I came across below sites in one of the webinar.  Please use them for information purpose only.

 
Using Symbium, Homeowners and contractors can instantly understand and visualize what’s possible on a property, and then submit and manage permit and rebate applications.

Enter your property address and instantly see if your property has an option to add an ADU.

https://symbium.com

You can check this site to get more information about ADUs and related option.

https://www.inspiredadus.com





Could You Live Larger in a Smaller Home?

Is your home feeling like more than you can manage in your current stage of life? It might be time to think about downsizing. ⁣
But to make the most of your move, you’ll need to consider more than just square footage. Here’s what to keep in mind: ⁣
🏠 Lifestyle: Are there hobbies you want to pursue in your new home? Do you want to be close to friends and family? Think about your ideal lifestyle and how your home can support it. ⁣
🏠Design: Small doesn’t have to mean cramped. Look for a home that’s designed to maximize storage space, natural light, and functionality. ⁣
🏠 Long-term accessibility: If you hope to age in your new home, look for features like single-story living and proximity to high-quality healthcare. ⁣
Want more downsizing tips? Check out our latest post below...











Pre-Rental Preparation Guide:

When preparing a single-family home for rental, it's essential to address various aspects to ensure a smooth and attractive rental experience for tenants. Here is a comprehensive guide that combines both the fixes and considerations for painting, as well as the importance of obtaining a home warranty for appliances and systems:

  

Pre-Rental Preparation Guide for Single-Family Homes

 

  1. Safety and Security Inspection:
    • Check doors, windows, locks, and security systems for proper functioning.
    • Install or check smoke detectors, carbon monoxide detectors, and fire extinguishers for safety compliance.
  2. Maintenance and Repairs:
    • Address any leaks, plumbing issues, electrical problems, or HVAC system maintenance needs.
    • Repair damaged walls, floors, ceilings, and ensure all appliances are in good working condition.
  3. Interior and Exterior Painting:
    • Evaluate the need for interior and exterior painting to refresh the property's look.
    • Opt for neutral colors that enhance the appeal of the home and attract a wider range of tenants.
  4. Landscaping and Exterior Maintenance:
    • Trim trees, mow the lawn, and maintain landscaping to improve curb appeal.
    • Check the roof, gutters, exterior paint, and address any necessary repairs.
  5. Pest Control and Deep Cleaning:
    • Address any pest infestations with professional services if needed.
    • Conduct a thorough deep cleaning of the property before showing it to potential tenants.
  6. Home Warranty for Appliances and Systems:
    • Obtain a home warranty that covers major appliances like refrigerators, stoves, HVAC systems, plumbing, and electrical systems.
    • Home warranties provide financial protection against unexpected breakdowns of covered items.
  7. Legal Compliance and Documentation:
    • Ensure the property meets all legal requirements for renting in your area.
    • Document the property's condition with photos or videos before tenants move in and create an inventory list of provided items.
  8. Accessibility Features and Safety Enhancements:
    • Install handrails where necessary for safety.
    • Ensure accessibility for individuals with disabilities if required by law.




 

Guide to Selling a Home As-Is

 

Selling a single-family home as-is in California can be a strategic decision for various reasons, such as saving time, avoiding costly repairs, or simplifying the selling process. Here is a comprehensive guide on how to navigate the process effectively:

 

Understanding Selling As-Is

  • Meaning of As-Is: Selling a property as-is means selling it in its current condition without making any repairs or upgrades.
  • Disclosure Requirements: Sellers must disclose all material defects affecting the property's value to potential buyers.

 

Benefits of Selling As-Is

  • Time and Cost Savings: Avoiding repairs and upgrades can save time and money.
  • Quick Sale Potential: As-is homes may attract cash buyers looking for investment opportunities, leading to faster sales.
  • Simplified Process: By selling as-is, you streamline the selling process and avoid extensive preparations.

 

Steps to Sell As-Is

  1. Set a Fair Listing Price:
    • Determine a competitive price that reflects the property's current condition.
    • Consider factors like deferred maintenance, outdated features, or structural issues.
  2. Legal Considerations:
    • Familiarize yourself with California laws regarding as-is property sales.
    • Ensure compliance with disclosure requirements to protect yourself from legal issues.
  3. Options for Selling:
    • Explore different selling options like iBuyers, real estate investors, or listing with a real estate agent.
    • Each option has its pros and cons in terms of speed, convenience, and potential sale price.
  4. Negotiation and Closing:
    • Be prepared for negotiations based on the property's condition and market demand.
    • Understand that buyers may expect discounts or concessions due to the as-is nature of the sale.
  5. Finalizing the Sale:
    • Once you have an offer, review all terms carefully, especially regarding repairs or contingencies.
    • Work with a reputable real estate professional or legal advisor to ensure a smooth closing process.

 

Pros and Cons of Selling As-Is

  • Pros:
    • Avoid haggling over repairs.
    • No inspection contingency.
    • Quick listing and potential fast sale.
  • Cons:
    • Potential lower sale price.
    • Negative buyer assumptions about property condition.
    • Limited financing options for buyers due to property condition.

 

By following these steps and understanding the nuances of selling a single-family home as-is in California, you can make informed decisions that align with your goals and maximize the efficiency of the selling process.

 




Tax benefits for 55+ years old home seller

 

If you are 55 years or older and sell your home in California, there are specific tax benefits and exemptions that may apply. Here are some considerations:

 

Proposition 60/90: If you are 55 years or older, you may be eligible for Proposition 60 or Proposition 90, which allows you to transfer the property tax base of your existing home to a replacement property of equal or lesser value within the same county (Proposition 60) or in certain participating counties (Proposition 90). This can result in substantial property tax savings.

 

Capital Gains Exclusion: Individuals aged 55 and older may also qualify for a one-time capital gains exclusion of up to $250,000 (or $500,000 for married couples filing jointly) on the sale of their primary residence. This exclusion applies if you have owned and lived in the home for at least two out of the five years preceding the sale.

 

Senior Citizens' Property Tax Postponement (PTP) Program: This program allows eligible seniors to postpone the payment of property taxes on their principal residence. The postponed taxes accumulate as a lien on the property and must be repaid when certain triggering events occur, such as the sale of the home.

 

It's important to note that while these exemptions can provide significant tax benefits, there may still be other costs associated with the sale, such as closing costs and potential federal capital gains taxes. Consulting with a tax professional or real estate attorney is advisable to ensure you understand all the relevant details and take advantage of available exemptions based on your specific situation.






Importance of Living Trust

 Living Trust:

  • A living trust is a legal document that designates a trustee to manage assets for the benefit of beneficiaries after the grantor's death.
  • It allows individuals to control and protect their assets during their lifetime and streamline the distribution process to beneficiaries without going through probate

A living trust plays a crucial role in estate planning by bypassing the probate process, offering numerous benefits and advantages. Here is an overview of the importance of a living trust in avoiding probate sales based on my research:

  • Avoiding Probate:
    • A living trust allows assets to be distributed to beneficiaries without going through probate, the court-supervised process for settling an estate after someone passes away.
    • By avoiding probate, the distribution of assets can be quicker and more efficient, saving time and reducing potential delays for beneficiaries
  • Privacy and Control:
    • Living trusts provide privacy by keeping estate matters confidential, unlike probate proceedings that are public record.
    • With a living trust, individuals retain control over their assets during their lifetime and can specify how these assets should be managed and distributed after their passing
  • Flexibility and Cost Savings:
    • Living trusts offer flexibility as they can be modified to address changing life circumstances, allowing individuals to adjust beneficiaries or assets as needed.
    • While setting up a trust may involve higher initial costs compared to a will, it can lead to significant savings by avoiding probate expenses in the long run.
  • Asset Protection:
    • Assets held in a living trust are shielded from probate, ensuring a smoother transfer of property to intended beneficiaries.
    • Placing real estate, such as a house, in a trust can protect it from probate proceedings, ensuring that the property remains within the family without the need for re-appraisal or court involvement

In conclusion, establishing a living trust is a strategic estate planning tool that not only helps avoid the complexities and delays of probate sales but also offers privacy, control, flexibility, cost savings, and asset protection. By understanding the benefits of a living trust in circumventing probate processes, individuals can secure their assets and streamline the transfer of wealth to their chosen beneficiaries efficiently.

 




Reverse mortgages for senior homeowners

reverse mortgage is a type of loan specifically designed for homeowners who are 62 years old or older. It allows them to borrow money using their home equity as collateral without having to make monthly mortgage payments. The borrowed amount, along with interest and fees, accumulates over time, and the loan is typically repaid when the borrower no longer lives in the home. 

 

There are different types of reverse mortgages available:

 

Home Equity Conversion Mortgage (HECM)

 

  • The most common type of reverse mortgage, backed by the U.S. Department of Housing and Urban Development (HUD) and the Federal Housing Administration (FHA)
  • Allows borrowers to access a portion of their home equity based on their age and home value, up to $1,089,300 in 2023
  • Can be taken as a lump sum, monthly payments, line of credit, or a combination
  • Requires borrowers to be 62 or older and receive HUD-approved counseling before closing

 

Proprietary Reverse Mortgage

 

  • A private loan not backed by the government
  • Allows borrowers to access larger loan amounts, especially for higher-valued homes that exceed the HECM limit
  • Typically have higher upfront costs than HECMs
  • Do not require HUD counseling before closing

 

Single-Purpose Reverse Mortgage

 

  • Offered by state, local, and nonprofit agencies
  • The least expensive type of reverse mortgage
  • Funds can only be used for a single, lender-approved purpose such as home repairs or property taxes
  • Less common than HECMs and proprietary reverse mortgages

 

Key Considerations

 

  • Reverse mortgages allow homeowners 62 and older to access their home equity without having to make monthly payments, as long as they remain in the home and keep up with taxes, insurance, and maintenance.
  • When the homeowner dies, moves out permanently, or sells the home, the entire loan balance becomes due and payable. Heirs can choose to pay off the loan to keep the home.
  • Reverse mortgages can provide needed income for retirees, but they also come with upfront costs and risks that should be carefully considered

 

Reverse mortgages can be beneficial for seniors looking to supplement their income during retirement or cover expenses like healthcare costs. However, it's essential to carefully consider the upfront costs, risks, and repayment terms associated with these loans before deciding if they are the right financial option.

 




Selling a home in California - Applicable Taxes and Fees

 

I am not a tax expert, but I can provide you with some general information. When selling a home in California, there are several taxes and fees that may apply. It's advisable to consult with a tax professional for personalized advice. Here are some potential taxes and fees you might encounter:

 

Capital Gains Tax: If the property has appreciated in value since you bought it, you may be subject to capital gains tax. However, there are exclusions for homeowners aged 55 and older, such as the California Homeowners' Exemption and the Senior Citizens' Property Tax Postponement Program.

State Income Tax: California imposes state income tax, and any gains from the sale of real estate may be subject to taxation. The rate will depend on your income.

Federal Capital Gains Tax: You may also be subject to federal capital gains tax on the sale of your home. However, there are federal exclusions available for primary residences.

Local Transfer Tax: Some local jurisdictions may impose a transfer tax on the sale of real estate. This can vary depending on where the property is located.

Closing Costs: Sellers often incur various closing costs, including escrow fees, title insurance, and other transaction-related expenses.

 

It's crucial to seek advice from a tax professional or financial advisor to understand your specific situation, eligibility for exemptions, and any recent changes in tax laws. Additionally, the California Franchise Tax Board and the Internal Revenue Service (IRS) can provide more detailed information on tax obligations related to the sale of property.

 



BRG Realty

1900 Camden Ave, San Jose, CA 95124

SANDY GHANTA
BRG Realty

Realtor®

DRE#: 01966366