Proposition 19--Helping Home Sellers 55 Years & Older

 

The Home Protection for Seniors, Severely Disabled, Families, and Victims of Wildfire or Natural Disasters Act

EXPANDED SPECIAL RULES FOR ELIGIBLE HOMEOWNERS

Effective April 1, 2021: Homeowners 55 years of age and older, severely disabled, or whose property was extensively destroyed by wildfire or other natural disasters may be eligible to transfer the taxable value of their primary residence to a replacement primary residence:

•     Anywhere in California
•     Of any value, but with upward adjustments if replacement of greater value
•     Purchased or newly constructed within two years of sale
•     Up to three times (previously one time), but without limitation for properties destroyed by fire

TAXATION OF INHERITED PROPERTY TRANSFERS

Effective February 16, 2021: Prop 19 narrows the rules allowing properties to pass from parent to child and grandparent to grandchild without an increase in the property tax bill. The taxable value can be transferred:

• To only those properties used as a primary home or farm by the child or grandchild
• If homeowners’ exemption if filed within one year of transfer
• If the value of the property is less than $1M over the original tax basis. If the property value, at the time of transfer, is more than $1M over the original tax basis, some upward adjustment in assessed value would occur.

If eligible, these changes may affect your title and escrow transaction. Additional forms may be required through escrow if you plan to transfer the current taxable value of your property. Consult your tax advisor, and/or contact your local tax assessor’s office to learn more about Proposition 19’s provisions and eligibility rules.  

Want to learn more?  Visit www.boe.ca.gov/prop19 or call Virginia Hall (619)258-8585 for more details. 

Courtesy of First American Title Company

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Home Buyer's Remorse: 6 ways to Avoid It

               You won the bidding war for a new home.  Excited! You start the process.  

As you start the loan paperwork and home inspection, you begin to question your decision.  Is it the right time to buy?  Did you choose the right home?  The right neighborhood?   You have a sinking feeling as you move forward.  As you near the end of the sale and see the loan numbers in print, you begin to wonder if you will be able to afford the home after all?   This sinking feeling is called Buyer's Remorse.                                                                                                                                  

Research shows that 61% of buyers wish they had done something different in the process of buying their home.  First time home buyers have an even higher incidence of second thoughts.  

Here are some ways to avoid Buyer's Remorse: 

• Educate Yourself in the Home Buying Process.  If you haven't purchased a home before, you will want to read everything you can and talk in detail to an experienced Realtor about the process.   Listen to family and friends and know how to avoid pitfalls. 
• Know why you are buying a home.  Every home will have some kind of problem.  Even new ones typically have a 10 year contractor's warranty for issues that arise.  If you are moving for a job, moving closer to children or you are outgrowing your present home, keep reminding yourself of why you are buying a home.    
• Budget.  Know what you can afford in a monthly payment prior to setting up to look at homes.  On your first home purchase, you may need to settle for a condominium, townhome, or a mobile home.  While it may not be what you dreamed of, you just want to get on the bus.  Nothing worse than finding a home you cannot afford.  Be preapproved by a lender.  Find out what the monthly payment will be and if fits into your budget.  Know what the closing costs will be.  Closing costs are separate from your down payment.
• Have Realistic Expectations.   Make a must-have list of no more than 3 things that you must have in a home.  Understand the market and where you can negotiate.  Understanding the issues or needed repairs with the home and know which ones are pressing and need to be fixed right away or can wait.  Know which ones are costly and require some budgeting to save up money. Be Patient.  Everything will not be perfect right away.  Overtime you will make the home you love. 
• Look for the Potential.  Sometimes a home is in less than perfect condition will be more affordable and have less competition.  Look beyond the flower wall paper, clutter, or dirty carpet and know with a little bit of elbow grease and paint, these can be fixed.    Envision your new landscaping and furniture in the home.  
• 
  Location Location Location.  While you can fix a lot of things in a home, you cannot change the location and it will impact the resale value. Research the community you are moving into.  Know if it is a busy street or if there are any plans to do major building nearby.  Visit the area on a weekend,morning, and evening, and meet the neighbors.  Neighbors will always share the issues with you. 

While you may still second guess your decisions, these 6 suggestions will help you to make a more confident home purchase.