Do I need to Homestead my property?

CFPB

In a distressed housing market, it is natural for homeowners to question the security of their homeownership. Attached is an informative piece on how a homestead declaration operates in the state of California.It is important to remember that a homestead provision offers homeowners only limited protection from a forced sale to satisfy certain debts.  As always, we kindly recommended you direct all legal/debt questions to the proper professional.

What is a Legal Description?

A Legal Description (also known as Land Description) consists of the written words which delineate a specific piece of real property.  In the written transfer of real property, it is universally required that the instrument of conveyance (in California, a Grant Deed) include a written description of the property. Attached please find examples of how legal descriptions appear on title documents of record.

CFPB

IMPORTANT TITLE TIP:  As title insurers, it is the Legal Description and the corresponding Assessor’s Parcel Number (APN) that we insure to, NOT the property’s address.  The Post Master and Tax Assessor employ two different means of classifying property.

Click here for sample

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CA Prop 60/90: The Tax Breaks for Seniors

These two constitutional amendments, passed by California voters provide property tax relief for persons aged 55 and over.  Implemented by section 69.5 of the Revenue and Taxation Code, they allow these persons, under certain conditions, to transfer a property’s factored base year value from an existing residence to a replacement residence.

Important to note about these two tax transfer initiatives is that Proposition 60 allows transfers of base year values within the same county (intracounty), while Proposition 90 allows transfers from one county to another county in California (intercounty) and it is the discretion of each county to authorize such transfers.

In the link below please find a WRT marketing piece on these propositions.  For more technical answers to your questions, here’s the FAQ’s link as found on the California State Board of Equalization website: PROP 60/90

Click here for WRT Proposition 60 /90 Handout

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Know Before You Owe

CFPBOn October 3, 2015, the Know Before You Owe mortgage rule goes into effect. One of the important requirements of the rule means that you’ll receive your new, easier-to-use closing document, the Closing Disclosure, three business days before closing. This will give you more time to understand your mortgage terms and costs, so that you know before you owe.

For more information on the 3 day review rule click here.

What is Probate?

legalProbate, which stems from the classic Latin term meaning “to prove” or “proven”, is the legal process of administering the estate of a deceased person by resolving all claims and distributing the deceased person’s property either under a valid will or when the decedent has died intestate (without a will) to their heirs and beneficiaries.

Probate is also the process by which the property of a decedent is re-titled. As with any legal proceeding, there are technical aspects to probate and trust administration.

Here are just a few:

  • Creditors need to be notified and legal notices published.
  • Trustees need to be guided in how and when to distribute assets and how to take creditors’ rights into account.
  • A Petition to appoint a personal representative (executor/administrator) may need to be filed and Letters of Administration obtained.
  • If the estate is not automatically devised to a surviving spouse through joint tenancy or is not held within a trust, the estate will need to be probated whether or not the decedent had a valid will.

Please note that this is just a brief and informative overview of what can be a very lengthy and involved probate process. Click Here for detailed information.

Most important to remember is that probate and trust administration laws vary from state to state. For answers to your technical probate questions, please consult the proper professional.

At WRT we help investors save money!

Title Tip…Working with Investors? Let WRT save them $$$ by issuing an insurance binder.

If a buyer/investor is planning on flipping a property within 2 years, WRT can save them a significant amount of money!  Your client would be charged just 10% of the base premium at his/her initial purchase for the binder.  Then at the time of the flip/resale, the investor would pay the difference in title premium between the purchase price and sale price.  This saves them hundreds of dollars! Contact your sales representative for more information.

Title Term:
Insurance Binder – a temporary contract of insurance in which the title company agrees to issue a specified policy within a certain period of time. (The binder must be requested before the property being purchased closes escrow).

Please Note: The binder contract is valid for a period of (2) years from the date of issuance and may be extended for an additional year (for an additional fee) if requested prior to the end of the initial two year period.

Please contact your title representative with any questions.

California Homeowner’s Exemption Vs. California Homestead Exemption

What Is The Difference?

Homeowner’s Exemption

Screen Shot 2015-05-14 at 10.58.27 PMA homeowner’s exemption is just a property tax exemption.  The California state constitution provides for the exemption of up to $7,000 in assessed value from property tax assessment of any property owned and occupied as the owner’s principal place of residence.  This means that the exemption removes up to $70 from your annual property tax bill. This may not seem like much, but it’s easy to obtain, and it adds up!  There’s no reason to forgo the benefit.

In order to qualify for the exemption for property, you must be its owner or co-owner, and must use the property as your principle place of residence (Vacation homes don’t count!).  Any place you own as your principle place of residence, and that is also subject to property tax, qualifies.  You also have to file an exemption claim form with the County Assessor.  Luckily, once the exemption has been granted, you won’t need to re-file the claim unless the title on the deed to the property changes.

There is one catch: if you plan to refinance your home, or plan to move your home out of (or into) a living trust, note that doing so may require you to change the title on the deed to the property.  Each time you do so, you will have to re-file your exemption claim, to ensure that you continue to receive the exemption.

Homestead Exemption



A homestead exemption, on the other hand, is an entirely different (and slightly more complicated) animal.  It is a bankruptcy exemption intended to help protect people from losing their homes to creditors.  If someone is sued for money and loses, the creditor can satisfy the amount of the judgment (translation: ensure they get paid) by selling assets belonging to the debtor, including the debtor’s home.  The California homestead exemption protects the homeowner’s equity up to the amount of the exemption even if the home is sold.  The point is to ensure that debtors and their families have some money remaining to invest in a new home, should their current home be sold involuntarily.  The exemption applies to every person who lives in a dwelling; the dwelling can be a home, trailer, mobile home, boat, etc.

Click here for more details regarding Homestead Protection.

Time To Discuss Living Trusts

legalIn this ever-changing housing market, questions regarding vesting (the manner in which title is held to real property) continue to arise.  One such frequently misunderstood means of vesting is that of properties held in a “Living Trust.”

When a property is held in a Living Trust, title companies have particular requirements in order to facilitate a smooth sale or refinance transaction.

While not comprehensive, the attached FAQ sheet will provide you with some of the basics regarding Living Trusts. For more technical, legal and/or tax questions, you’ll need to consult the proper professional.

See attached PDF

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Southern California Home Sales and Median Sale Price Rise

As seen on DQNEWS.com

CoreLogic® (NYSE: CLGX), a leading global property information, analytics and data-enabled services provider, today released its December Southern California housing market report. The number of homes sold increased sharply from the month of November and rose modestly from the same time a year earlier, marking one of just two months in 2014 to post a year-over-year gain in sales. The region’s median sale price also increased from November and rose year over year for the 33rd consecutive month, although that annual gain was the lowest since the string of price increases began in spring 2012.

A total of 19,205 new and resale houses and condos sold in Los Angeles, Riverside, San Diego, Ventura, San Bernardino and Orange counties in December 2014. That was up month over month 22.8 percent from 15,643 sales in November 2014, and up year over year 4.3 percent from 18,415 sales in December 2013, according to CoreLogic DataQuick data.

Sales usually increase from November to December. On average, Southern California sales have risen 13.1 percent between those two months since 1988, when CoreLogic DataQuick data began. On a year-over-year basis, sales in 2014 fell each month except in September (+1.2 percent) and December.

The total number of homes sold in Southern California in all of 2014 fell 8.7 percent compared with 2013.

December home sales have ranged from a low of 13,240 in 2007 to a high of 36,865 in 2003. December 2014 sales were 20.2 percent below the December average of 24,067 sales since 1988.

“One month doesn’t make a trend, but December’s uptick in home sales might indicate renewed interest in housing thanks to lower mortgage rates and job growth in recent months,” said Andrew LePage, data analyst for CoreLogic DataQuick. “The gain came despite a continued decline in the share of homes sold to investors and cash buyers. If demand continues to build we’ll need more supply to keep up with it. One of the big questions hanging over the housing market is whether higher demand and home values will lead to a lot more people listing their homes for sale, as well as more new-home construction, which remains well below average.”

The median price paid for all new and resale houses and condos sold in the six-county region in December 2014 was $415,000, up 0.7 percent month over month from $412,000 in November and up 5.1 percent year over year from $395,000 in December 2013. The median hasn’t moved much since September 2014, when it was $413,000. The median’s peak for 2014 was $420,000 in August.

Click here for entire article.

Probate Basics

legalProbate, which stems from the classic Latin term meaning “to prove” or “proven”, is the legal process of administering the estate of a deceased person by resolving all claims and distributing the deceased person’s property either under a valid will or when the decedent has died intestate (without a will) to their heirs and beneficiaries.

Probate is also the process by which the property of a decedent is re-titled.  As with any legal proceeding, there are technical aspects to probate and trust administration.

Here are just a few:

  • Creditors need to be notified and legal notices published.
  • Trustees need to be guided in how and when to distribute assets and how to take creditors’ rights into account.
  • A Petition to appoint a personal representative (executor/administrator) may need to be filed and Letters of Administration obtained.
  • If the estate is not automatically devised to a surviving spouse through joint tenancy or is not held within a trust, the estate will need to be probated whether or not the decedent had a valid will.

Please note that this is just a brief and informative overview of what can be a very lengthy and involved probate process.  Embedded in this newsletter please find a more in-depth information regarding the probate process as published by the CLTA – UNDERSTANDING PROBATE 



Most important to remember is that probate and trust administration laws vary from state to state.  For answers to your technical probate questions, please consult the proper professional.