The DeBord Group (Kathie, Mike, Jason DeBord) El Dorado Hills Real Estate - frequently asked questions

By: Debord Group  09-12-2011

Frequent Questions

PROPOSITION 90 – Inter County Base Year Transfer

On December 10th, 2009, the Board of Supervisors approved the introduction and 1st reading of the Proposed Prop 90 ordinance. On December 15th, 2009 the Board adopted the ordinance after its second reading. The proposed ordinance will have an estimated effective date of February 12th 2010, which is 60 days after the adoption.

As the ordinance is currently written and based on Revenue and Taxation Code Section 69.5 (Prop 90), in order to qualify for a base year transfer:

  • The replacement residence must be acquired after the effective date of the ordinance allowing base year value transfers from other counties.
  • As of the date of transfer of the original property, the claimant or the claimant’s spouse is at least 55 years of age or severely and permanently disabled. There is no age requirement for persons who are severely and permanently disabled.
  • The claimant and/or the claimant’s spouse has not previously been granted the property tax relief provided by section 69.5. The sole exception to this requirement is if relief was first granted for age, relief can be granted a second time if the claimant or claimant’s spouse subsequently becomes severely and permanently disabled, and has to move because of the disability.
  • The original property was eligible for the homeowner’s exemption or the disabled veterans’ exemption either at the time it was sold or within two years of the purchase or new construction of the replacement dwelling.
  • As a result of its transfer, the original property must (1) be subject to reappraisal at its current full cash value in accordance with sections 110.1 or 5803; or (2) receive a base year value determined in accordance with section 69 (intracounty disaster relief), section 69.3 (intercounty disaster relief), or section 69.5 because the original property qualified as a replacement property under one of those sections.
  • The replacement dwelling is purchased or newly constructed within two years of (before or after) the sale of the original property.
  • The replacement dwelling must be eligible for the homeowner’s exemption at the time the claim is filed.
  • The replacement dwelling must be of equal or lesser value as compared to the original property. This means that the full cash value of the replacement dwelling on the date of purchase or completion of new construction must not exceed:
  1. 100 percent of the full cash value of the original property as of the date of sale, if the replacement dwelling is purchased or newly constructed prior to the date of sale of the original property,
  2. 105 percent of the full cash value of the original property as of the date of sale, if the replacement dwelling is purchased or newly constructed within the first year following the date of the sale of the original property, or
  3. 110 percent of the full cash value of the original property as of the date of sale, if the replacement dwelling is purchased or newly constructed within the second year following the date of the sale of the original property.

    The “full cash value of the original property” includes any inflationary factoring that occurs between the sale of the original property and the purchase of the replacement dwelling. The “full cash value of the replacement dwelling” does not include any inflationary factoring.

  • If the original property was substantially damaged or destroyed by misfortune or calamity and sold in its damaged state, the full cash value is determined immediately prior to the misfortune or calamity.
  • The claimant must file a claim for property tax relief under this section within three years of the date the replacement dwelling was purchased or the new construction of the replacement dwelling was completed.

In addition, the ordinance requires an application fee of $500 to the Assessor.

The Assessor is currently developing tools to help real estate professionals, homeowners and others determine if a base year value can be transferred. This will be made available as soon as completed.

If you have any questions, please call Tim Holcomb, Assessor at 530.621.5755 or Assistant Assessor Karl Weiland at 530.621.5757.

.

Pest inspections are one of the fundamental inspections that should be performed during escrow in the purchase of a new home.  Pest inspections are conducted by licensed professionals who perform inspections of building structures to determine damage and conditions that may lead to damage from insects, termites, and dry rot.

While some sellers may favor offers that do not contain a pest inspection contingency, it is always best that buyers have knowledge of potential costly repairs, regardless of whether the seller agrees to pay for such work to be performed.

A standard termite inspection includes a visual inspection of readily accessible areas of a home (interior, foundation/sub-space areas, attics, basements, and exterior) for evidence of wood-destroying insects and wood-destroying organisms.  Findings are provided in the form of a report following the inspection.  A typical pest inspection takes approximately one hour.

In addition to wood-destroying insects and organisms, the inspector also looks for ants, bugs, and fungus, as well as evidence of such pests (droppings, wood damage, cellulose shavings, tunneling, etc).  He also looks for structural wood that is in contact with the soil, and signs of fungus, wood decay, mold, dry rot, water problems, and leak damage.

The cost of the pest inspection varies, and can cost between $75 and $500, depending on the size and age of the property.   The price of remedying any problems depends on the scope of the damage and type of treatment required; often times a quote is obtained from the company that performs the inspection.  Most pest inspection companies also warranty their work.

The cost of the initial inspection is negotiable, but typically the buyer pays for the inspection and report as part of the closing costs.  Following the issuance of the report, the buyer issues a request to the saller for any repair work identified, unless both parties negotiate a different arrangement before opening escrow and note it in the residential purchase agreement.

With the initial negotiations, buyers typically request an inspection as part of the contingency, and note Section 1 or Section 1 and Section 2 work to be paid by the seller.

Section 1 includes conditions in which there is evidence of an active infestation and/or conditions or problems resulting from an infestation.

Section 2 conditions are those which are not currently causing damage, but may lead to problems in the future, if left unattended.  Preventative measures are often suggested.

Section 1 are issues in which there is evidence of an active infestation and/or conditions or problems resulting from an infestation. Section 2 is more preventative (such as moving debris, caulking, etc.).

A professional home inspection is the most important inspection to have conducted when buying a new property.  Home inspections are conducted by licensed professionals who perform inspections of building structures to determine if there are any issues with the property.

A home inspection is critical in that the purchase of a home is probably the largest investment that more people make, and they should be as informed and educated as possible.  Many lenders also require that a home inspection is completed as a condition of financing a loan.

The home inspection is traditionally paid for by the buyer, unless otherwise negotiated.  In some cases, a buyer may use an existing home inspection if a recent one already exists.  The cost of the pest inspection varies, and can cost between $300 to $500 or more, depending on the size and age of the property.

Home inspectors inspect all visible areas and review all accessible items and areas, including the heating system, central air conditioning system, interior plumbing and electrical systems, the roof, attic space and all visible insulation, the walls, ceilings, floors, doors, windows, basement or crawlspace area, and the foundation and all visible structural components. Findings are provided in the form of a report following the inspection.  A typical pest inspection takes several hours or longer.

Some findings may warrant additional inspection to be conducted by a professional in the given area.

CC&Rs, or Covenants, Conditions, and Restrictions, are the various rules that regulate the usages and aesthetics of a subdivision, neighborhood, or community development.  CC&Rs are included in transfer deeds in the purchase of a home or vacant land and impose limitations on how the property can be used.

CC&Rs vary from community to community and subdivision to subdivision, and are used for a variety of reasons.

In some communities, the CC&Rs may be used to create a neighborhood for a specific profile of homeowner, such as “Active Adult” communities that have age restrictions of 55+.

Others may be more interested in maintaining a uniformity of appearance, such as houses having exterior colors from a preselected palette range.  This is also done under the principle that appropriate restrictions can benefit the value of property within the given community.  In Serrano, for example, the production homes include front landscaping maintenance as part of the HOA fees that the homeowner pays.

CC&Rs are typically enforced by the Homeowners’ Association (HOA) or, in the absence of one, the Community Services District (CSD).

Often, fines are used to enforce CC&Rs.  Because every community is unique, it is important that prospective homeowners review these documents in detail to ensure that they understand them and agree to abide by them.

A Mello-Roos direct levy is a special assessment imposed on those real property owners within a Community Facilities District. The district has chosen to seek public financing through the sale of bonds for the purpose of financing certain public improvements and services as outlined in the “Mello-Roos Community Facilities Act of 1982.” The special assessment you pay is used to make the payments of principal and interest on the bonds. The special assessment will stay in effect until the principal and interest on the bonds are paid off along with any reasonable administrative costs incurred.

Services and facilities may include: police protection, fire protection, ambulance and paramedic services, recreation program services, libraries, library services, parks, parkway facilities, open-space facilities, the operation and maintenance of parks, parkways and open space, museums, recreation facilities, child care facilities, cultural facilities, flood and storm protection, services for the removal of any threatening hazardous substance, elementary and secondary school sites and structures, natural gas pipeline facilities, telephone lines, facilities to transmit and distribute electrical energy, cable television lines, and others.

If the annual property tax bill includes a Mello-Roos special assessment and it is not paid in full by June 30, the property may be subject to the accelerated judicial foreclosure process. After June 30, those special assessments subject to the accelerated judicial foreclosure are removed from the unpaid tax bill and the Districts are responsible for collection enforcement.

Mello-Roos special assessments are levied on the tax bill on behalf of the Mello-Roos District and are not levied by the Assessor, Auditor-Controller or Tax Collector. For information or disclosure of a Mello-Roos special assessment levied against property, please contact the Mello-Roos District directly. Contact numbers for the individual districts are contained in the Direct Levy District Listing.

An HOA, or homeowners’ association, is an organization created by real estate developers to develop, manage, and sell homes, as well as manage CC&Rs and other responsibilities once the development has sold all of its homes and/or vacant land.  This structure gives the developer the ability to transfer financial and legal responsibility for the community to the HOA.  HOAs provide services, regulate activities, levy assessments, and may impose fines.  Many HOAs are incorporated, and are very community in planned-unit developments.  Association boards appoint corporate officers, and these boards are made up of non-paid volunteers (often residents of the community) and may create subcommittees, such as “architectural control committees.

A short sale is the sale of a home or lot (real estate) in which the sale proceeds fall short of the balance owed on the property’s loan. With the short sale process, both the homeowner and the lender attempt to sell the property in order to avoid foreclosure, which has detrimental consequences to both the bank and borrower.

With the short sale, the lender agrees to discount the loan balance on the property as a result of a financial hardship on the part of the borrower.  The homeowner works with a real estate agent to sell the mortgaged property for an amount that is lower than the outstanding balance on the loan.

A borrower may elect to pursue a short sale, in lieu of foreclosure, in order to resolve the problem more quickly and with a lessen impact on their credit.

The bank may determine the loss via short sale is not as substantial as the cost of foreclosure and later attempting to sell the property as a bank-owned (or REO) listing.

There are many areas of concern for homeowners contemplating a short sale of their property.  The DeBord Group highly recommends consultation by both a tax preparer/accountant as well as a real estate attorney.

REO (Real Estate Owned) or “bank owned” properties are properties that failed at foreclosure auction and revert back to the bank or mortgage company.  Many foreclosure auctions result in no bids, as there is not enough equity in relation to the market value to satisfy the loan and other fees and costs accumulated through the foreclosure process (hence the foreclosure/trustee sale).

Foreclosure auctions begin with a minimum bid that includes the loan balance, any accrued interest, attorney’s fees, and any costs associated with the foreclosure process.  Parties interested in bidding at a foreclosure auction must have a cashier’s check in hand for the full amount of their bid.  Successful bidders receive the property in “as is” condition, which may include an occupant living at the property, as well as any other liens against the property.

Because the amount owed to the bank is typically more than the market value of the property, most foreclosure properties revert to the bank and become an REO or “real estate owned” property. When the mortgage company takes the property back, the mortgage loan no longer exists.  The bank will manage the eviction process, if necessary, and may do some repairs.  Most banks now have departments to handle these properties and manage the lease or resale of the properties once any occupants have been evicted and/or repairs completed.

As a seller, banks and mortgage lenders have different objectives and processes than a traditional home owner selling his own home, so this poses different challenges to a prospective buyer.  Issues include conditions of selling property in “as is” condition, reluctance to entertain requests for repairs, and their own requests and requirements with regards to loans and pre-approvals.  Banks are also exempt from the Seller’s Transfer Disclosure Statement, which is to the detriment of buyers.

The information in this article was current at 06 Dec 2011


Other products and services from Debord Group

09-12-2011

The DeBord Group (Kathie, Mike, Jason DeBord) El Dorado Hills Real Estate - our land listings

Vacant Land in Bella Lago at Promontory. Vacant Land in Grizzly Flats.


09-12-2011

The DeBord Group (Kathie, Mike, Jason DeBord) El Dorado Hills Real Estate - our home listings

Bedroom, 1.5 Bathroom, 1302 sq ft, 0.166 acres. Great Single Story in Auburn Lake Trails. Serrano Country Club home in Cul de Sac. Custom Home in the Summit.


09-12-2011

The DeBord Group (Kathie, Mike, Jason DeBord) El Dorado Hills Real Estate - events

This will be held at ERA Realty Center in El Dorado Hills at Town Center on Thursday, December 10th from 5:00 to 7:30. We are also accepting unwrapped new toys at all ERA offices which will be donated to the Toys for Tots program. ERA Realty Center & Stanford Mortgage will be holding their Annual Open House Benefiting Toys for Tots. Included is food and festivities, free photos with Santa, and a coloring contest.