Glen Oaks Escrow

State Cracking Down on Property Tax Writeoffs

When property owners file their tax returns with the Franchise Tax Board in April 2013, they’re in for a rude awakening.  That’s because they’ll be required to break down payments into deductible and non-deductible portions, likely reducing their itemized deductions by thousands of dollars.

But don’t go calling your representatives about which new legislation implemented this change; it has nothing to do with new taxes or laws, but rather a technology upgrade expected to be completed in 2012 at the FTB’s headquarters in Sacramento.  Until that system is up and running, the tax authority hasn’t been able to differentiate between deductible and non-deductible portions of property tax payments.  Property owners typically deduct the total amount of their property tax bill – or the 1098 amount provided by their mortgage company – leaving the state short on taxable revenue well into the billions.  For example, Mello-Roos fees in Orange County alone account for more than $200 million of non-deductible amounts expected to be written off for tax year 2011.  The updated systems will allow the deductible and non-deductible split, giving Sacramento $200 million of “found” income to collect revenue on once the computers are operational.

After a thorough review of state records turned up the shortcoming in property tax deductions, the FTB chose to hold off implementation of the new rules until early 2012, allowing taxpayers ample time to adjust annual withholdings – and to ensure tax preparers have access to the proper documentation when it’s time to filing for tax year 2012.

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Who Says Winter is Slow? How Realtors Stay Busy During the Holidays

Most would consider the winter months the slowest time in real estate.  It’s true that the time around the holidays is typically reserved for family and relaxation, with significant life changes on hold until after the new year.  But, savvy Realtors use that time to network, obtain re-certifications, and/or continue their education, allowing them to be fully prepared when the market “springs to life” in the spring – armed with new skills and a list of potential clients.

For those agents with properties on the market, the winter months may also be a good time to host open houses.  There’s typically less competition for clients during this time, and sellers may find a more serious pool of potential buyers, many of whom may be out looking due to an upcoming relocation.

Since most new listings occur in the spring, agents and sellers may also benefit from listing properties “early.”  In this way, you allow the home to stand out early.  It also increases the likelihood of an offer that sticks.

“Winter is a nice time of year to shop,” states Prudential’s Marilyn Bailey.  “There aren’t as many buyers out there, so you’re not competing with other offers as much.”

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“Real” Property vs. “Personal” Property

According to the ‘Lectric Law Library, Real Property is “Land and all the things that are attached to it. Anything that is not Real Property is Personal Property:  anything that isn’t nailed down, dug into or built onto the land.”  Pretty straight forward, right? Not necessarily…

Typically, all parties consider items like furniture and appliances “personal” property.  When you buy a home, you’re buying the family room, not the flat screen television or the leather sofa.  While some jurisdictions have specific interpretations of “real” vs. “personal” property, when buying and selling real estate, there can be substantial grey areas.

If you’re talking about light fixtures and drapes, one person’s real property can be another’s personal property.  Even if the chandelier in the entryway wasn’t meant to be moved once it was installed, its value – whether in dollars or in sentiment – could make a difference when it comes time to sell.  It can also lead to confusion and/or dispute between buyers and sellers.

The best way to avoid conflict is to identify items like this at the outset.  If you’re selling a home and know the appliances are staying or the drapes are going, mention it to potential buyers.  Once a purchase agreement is drawn up, be sure that any items like this are clearly identified.  Built-in bookshelves, window air conditioners, and radiators are examples of other items that could cause dispute.  The list of property items should be given to the closing agent to be included in escrow docs so it’s clear to all parties what items stay and what items go.

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Create a Better Mobile Experience for your Real Estate Clients

Smartphones have seemingly taken over the world.  Everyone has one, as they make life on the go much easier.  By following some (or all) of the tips below, you can ensure a better mobile experience for you and your clients.

• Keep it brief.   In the “old days” on the web, you could go long – everyone had pretty much the same size screen on their desk, but on mobile devices, lengthy paragraphs chew up bandwidth.  Pare it down and eliminate Flash.  Not only does Flash hog memory resources, it also isn’t compatible with many mobile devices.
• Look at it from their perspective.  You probably don’t have every wireless device known to the free world… instead, use HowToGoMo.com to evaluate your website’s appearance on mobile devices.  Not only can you check button sizes and try out your site’s searchability (to name a couple), it allows you a complete package to ensure a better mobile experience.
• Stay safe.   If you ever felt you’ve been in danger in your surroundings, look no further than the “Real Alert” app.  It encompasses five crucial features, like automatic 911 dialing, GPS positioning, and hospital locations.
• Track expenses on the go.  If your job keeps you on the road, you know the hassle of tracking receipts for your expenses.  Try the “Expensify” app instead of loading up your glovebox.  By using your smartphone’s camera, you can digitally track your receipts – and cut out the paper mess.
• Track your mileage.  Another great app for those constantly on the go, “MileBug” lets you track mileage for one vehicle or more, while allowing you a convenient export function so you can move files seamlessly to your PC or laptop.
• Interactive floor plans.  By using the “MagicPlan” app, you can create an interactive floor plan with from your smartphone.  It allows you to easily make measurements, and publish results to the web in a flash.
• Track your prospects.  The “Open Home Pro” app allows you a tool to sign in clients at Open Houses, then immediately thank them by email with further details about the property, your other listings, and your contact info.  If the price on the house goes down or the house is still available, you can immediately notify all attendees of the change.

Not only will these tools help you stay organized, they can help you better serve your clients.

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Tips for buyers while house hunting

When you’re looking for a new home, it’s easy to become enamored by paint colors and new flooring.  While there’s a house out there (somewhere)
with your name on it, keep in mind that sometimes it takes a while to find the “perfect” home.  So how can you make sure you’re making the right
decision?

•   Remember the inspection.  Even though it looks like that house is “the” one, it may be hiding secrets that could turn up during inspection.
  Make sure any purchase contract allows you the right to refusal if the inspector finds something you don’t like
•   Cheap isn’t always cheaper.  From foreclosures to fixer uppers, make sure you have real-world knowledge of what it might take to bring it up to
  your standards.
•   Lifestyle choices.  Not every house will be in that “perfect” area that allows you and your family the lifestyle that you lead (or want to lead).  While that’s not necessarily a deal-breaker, ensure that you are all comfortable with what living in that neighborhood would entail.  From schools to shopping to hiking, know where those deal-breakers lie – and stick to them.
• Consider the hidden costs.  Upkeep, property taxes, HOA fees, water, trash, etc.  Know what the “real” cost of that house will be before you hit a point of no return.

In your travels, you’ll see places that will tug at your heartstrings – they’ll say “pick me.”  Follow these tips and you’ll have a better understanding of which homes are keepers, and which ones to pass on.

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Happy New Year!

Wishing you a wonderful new year.
May 2012 be your best year yet!

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Give The Gift Of A Down Payment This Holiday Season

You may still be struggling to find the “perfect” gift for that special someone.  As you consider all the options at your disposal, add one more possibility to the list:  the gift of a down payment.  With lenders now requiring down payments of 20% (or more), this option can help make a significant dent when your adult children are in the market for a new home.  It can also make a difference in the size of your estate, saving your heirs the time and expense associated with probate.

In 2011, the gift limit of $13,000 (to a single recipient per calendar year) means that a married couple could give $26,000 to each recipient without incurring a gift tax.  If combined with gifts from a second set of parents, a young couple could theoretically have more than $100,000 to put down on a house, suddenly putting a $500,000 home within their reach.  Even more exciting is when a gift is bestowed at the end of one calendar year and the beginning of the next, effectively doubling a potential down payment to nearly $250,000.

As with many financial maters, the first and most important step is to consult a tax advisor to help ensure there are no unforeseen circumstances for either party at tax time.  But this is one case where big things come in small packages!

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Use Facebook Video Calling To Stay In Touch

These days, there are so many ways to keep in touch with clients, colleagues, family, and friends. Instead of a distant voice in your ear or words in a chat window, there’s a way to be face to face – probably at your fingertips already and you don’t even realize it – Facebook Video Calling.

Facebook Video Calling allows you to chat in real-time, face-to-face.  You can even multi-task – use text chat and other Facebook features while video conferencing with the person on the other end.  This is especially helpful when you’re dealing with clients who aren’t local; interfacing with other agents on offers and counter-offers; or coordinating inspections and improvements with contractors.  Chances are, you’re already friends with a lot of these people on Facebook so why not take full advantage of the features Facebook has to offer?

To make the most of Video Calling, you and the recipient will need a webcam and microphone (starting at around $30).  After you’ve opened a Facebook chat session with the recipient, click the Video Camera icon.  The first time you do this, you will have to download and install Facebook’s Video Chat software. Upon doing this, you’ll find out who of your other Facebook friends are already enabled for Video Calling.  Even if the recipient doesn’t have a webcam, they will still be able to see and hear you – you just won’t be able to see them.

Don’t be afraid to take advantage of this tool.  It’s a powerful (and inexpensive) way to maintain personal connections – and could very well be the difference between you and the “other” agent.  After all, Facebook is about more than just status

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Ensure Your Smartphone is Protected

One of the most important items at nearly every professional’s disposal these days is a smartphone.  No longer do you have to carry around a file full of business cards or phone numbers. Gone are the days of being tethered to a PC, but if your smartphone fell into the hands of a thief or hacker, you’re extremely vulnerable. By following these tips, you can minimize your risk:

1. Password-protection.  By creating a unique code, you’re ensuring that an unauthorized user doesn’t have access to data on your phone should you misplace (temporarily or permanently) the device.
2. Application review.  Read reviews of applications before installing them.  New or unreviewed apps can be wrought with security and privacy holes.
3. Limit access.  Many apps use personal data stored on your phone (like contacts or GPS).  Make sure you know which apps are using what data and why.  Don’t allow apps access to data they don’t need, e.g. your calculator doesn’t need access to your contacts.
4. Limit Bluetooth usage.  Typically, Bluetooth passwords are short and easy to figure out.  For those situations where you can’t do without a Bluetooth device, make sure the password is robust.  The safest way to prevent someone from listening in on your conversation is to use a wired connection.
5. Regular housekeeping.  By reviewing applications on your device regularly and deleting those you don’t use, you prevent your phone unnecessary open connections to your data.
6. Screen calls and texts.  Calls and text messages sent from unknown or blocked sources can leave you exposed to potential phishing schemes.  Search the web for any unknown numbers to determine if they’re related to any documented scams.
7. Close browsers.  Some mobile sites will remain open indefinitely – even those that are password-protected.  Open pages can leave you vulnerable if you’re logged in to your bank or email.
8. Verify updates.  Never trust an “update” link sent via email or text.  Go to your device’s app store or directly to the app developer’s website for verification.  Hackers use phishing techniques like this to gain access to user passwords.

Smartphones are our lives rolled into little package, but there’s no reason they can’t be safe.  By following these tips, you can keep your most sensitive data out of the hands of unscrupulous characters.

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New Regulations Real Estate Agents and Brokers Need to Know About in 2012: Part Three

This article completes the list of the fifteen new real estate laws and regulations that you need to know about, for the sake of your business and your clients’ interests. We hope that you’ve found value in this blog post series and wish you nothing but success in the final months of 2011!

Sellers Disclosing Water-Conserving Plumbing Fixtures: C.A.R. successfully sponsored a new law, effective January 1, 2012, revising the Transfer Disclosure Statement (TDS) to include a checkbox in Section A for the seller to disclose whether the property has water-conserving plumbing fixtures.  The revised TDS also clarifies at the end of Section B that, by January 1, 2017, a single-family residence built on or before January 1, 1994 must generally be equipped with water-conserving plumbing fixtures.  If, however, that single-family home is altered or improved on or after January 1, 2014, the water-conserving plumbing fixtures must be a condition of final permit approval.  Water-conserving plumbing fixtures are low-flow toilets, shower heads, and faucets under section 1101.3 of the California Civil Code.  C.A.R. intends to release a revised TDS form in November 2011 to comply with this law.  Senate Bill 837.

NHD Companies Disclosing Mining Operations: Starting January 1, 2012, a company preparing a natural hazard disclosure (NHD) statement for a prospective buyer, as required for certain transactions, must also disclose whether the property is located within one mile of a mining operation, according to map coordinate data from the Office of Mine Reclamation.  If a property is within one mile, the NHD company must give a specified notice that such mining operations may cause inconveniences.  Senate Bill 110.

No Fee Bundling for HOA Disclosures: Beginning January 1, 2012, another C.A.R.-sponsored bill requires a homeowner’s association (HOA) to, upon written request, give an estimate of the fee for providing a prospective buyer with the governing documents of the common interest development and other required HOA disclosures.  The fee must be reasonable based upon the HOA’s actual cost for procuring, preparing, reproducing, and delivering the HOA documents.  If the fee is paid, the HOA cannot withhold the required HOA disclosures for any reason.  Moreover, the HOA cannot bundle the fee for providing required HOA disclosures with any other fees, fines, or assessments.  This law will prevent an HOA’s third-party document preparation company from bundling together both mandatory and non-mandatory HOA documents, and charging a higher fee for providing all the documents.  The HOA is also prohibited from charging any additional fees for electronic delivery of HOA documents, which must be available to a requesting party if the HOA maintains the documents electronically.  Additionally, at a buyer’s request, the HOA must provide 12 months of approved minutes of the association’s board of directors meetings (excluding executive sessions).  Delivery of the required HOA documents must be accompanied by a cover sheet itemizing the documents required by law and those provided.  In November 2011, we intend to release a revised C.A.R. standard form Homeowner Association Information Request that complies with this requirement.  Assembly Bill 771.

Brokers Designating Managers: Under another law that C.A.R. sponsored, effective July 1, 2012, an employing broker may appoint a licensee as a manager to supervise the licensed activities, clerical staff, and day-to-day operations of a branch office or division.  An appointed manager who fails to properly supervise licensed activities will be subject to disciplinary action by the California Department of Real Estate (DRE).  Appointing a manager, however, does not limit the employing broker’s supervisory responsibilities.  The appointment of a manager must be in a written agreement in which the manager accepts the delegated responsibility.  The employing broker must notify the DRE when a manager has been appointed or terminated.  A licensee cannot be an appointed manager if the licensee holds a restricted license, is or has been subject to a debarment order, or is a salesperson with less than two years of full-time real estate experience within the last five years.  Senate Bill 510.

Strengthening DRE Enforcement: Effective January 1, 2012, the DRE will have greater disciplinary authority to achieve its highest priority of protecting the public.  A licensee will be required to report to the DRE within 30 days of any of the following: (1) disciplinary action taken by another licensing entity in California or another state, or by a federal governmental agency; (2) an indictment or information charging a felony against the licensee; or (3) a conviction of a felony or misdemeanor, including a plea of guilty or no contest.  Failure to comply with this reporting requirement will be cause for discipline.  The DRE’s broader disciplinary authority will also include, among other things, the ability to automatically suspend the license of anyone incarcerated after a felony conviction.  For disciplinary actions, the DRE can conclusively presume without a hearing that a licensee’s conviction of murder, rape, lewd and lascivious acts, or a violation of dangerous drugs or controlled substances laws is substantially related to the licensee’s qualifications, functions, or duties.  The DRE will also be able to enter into a pre-prosecution settlement with a licensee or applicant instead of issuing an accusation or statement of issues, but the settlement shall be considered discipline.  Additionally, the DRE can request that a disciplinary order requires the disciplined licensee to pay reasonable investigation and prosecution costs.  Failure to pay can result in non-renewal of license.  The DRE can also require that a restricted licensee pays the costs for monitoring the licensee and monetary restitution to any person who sustained damages caused by the licensee’s misconduct.  Again, failure to pay can result in non-renewal of license.  Senate Bill 706.

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