Inventory remains tight and homes are moving at a fast clip. You have one weekend to see properties before offers are due, reviewed and accepted typically at the beginning of the week.
Inventory remains tight and homes are moving at a fast clip. You have one weekend to see properties before offers are due, reviewed and accepted typically at the beginning of the week.
When buying a home, people typically make certain assumptions regarding the items in the house that are included with the property.
In the same vein, sellers make assumptions on what they will take with them. Of course, the seller’s sofa and dishware will go, but there are other items that are not as obvious. It’s imperative that this is all spelled out in the purchase contract. There is a default list in the contract and if this is not revised, then a seller could risk losing the chandelier that has been in the family for generations or a buyer could expect to find a center island in the kitchen only to learn that it was on wheels and not fixed, and was removed from the property. It’s best for buyers and sellers to be as thoughtful and comprehensive as possible about included and excluded items to avoid any dispute at the close of escrow. Otherwise, you could be in a lawsuit over a fountain in the driveway that the sellers wheeled away and the buyers thought was part of the purchase. (True story.)
Included items and excluded items are addressed in the Residential Purchase Agreement (RPA) in paragraphs 8B and 8C, respectively.
The included items are the typical fixtures that are installed or “fixed”, lending to the expectation that they will stay with the property: kitchen cabinets, bathroom sinks, lawn. There are other items included in this paragraph that are deeemed fixed that have been debated over whether they are fixtures or not including light fixtures, shutters, fountains, curtain rods, garage door openers, gas logs/grates, security systems/alarms. If a seller wants to keep any such items, he or she needs to state so explicity in paragraph 8B otherwise they are to stay with the property.
And alternatively, if a buyer wants to include anything that is personal property, he or she must list it in Paragraph B(3). Specificty is key. Identify the item, the make/model if applicable, color, the room it’s in, etc. There are easy to use checkboxes for items that are techincally personal property but are often included with the property, i.e. stoves, refrigerators, and washer/dryers.
In recent years another category has become more prevalent and has the potential to cause some friction between buyers and sellers if not clarified in the contract: home automation systems, i.e. security cameras and doorbells, electronics that automate lighting and air control. The “brain” of such systems has to remain with the property as well as the parts, but the controllers are only left behind if they are exclusively used for that purpose. For example, if your phone has an app that controls the automation, you do not leave your phone, but if a tablet is posted by the front door to manage the automations, then that tablet stays.
Like everything else in the purchase contract, the more explicit you are up front, the smoother the transaction will go. Leaving items up in the air to deal with while you are in escrow is never ideal and by that point you may longer have any leverage to get what you want.
We are a few weeks into the stay at home order in California while we deal with COVID-19. As we continue to adjust to this new reality and stay healthy, I wanted to update you on some accommodations that have been made locally and statewide to help people during this stay-at-home order:
Statement from Keith Knox, Treasurer and Tax Collector on COVID-19 and April 10 Property Tax Deadline
“I understand that this is a very stressful time, especially for those suffering direct effects from this public health crisis, and my office is committed to helping in any way we can. Los Angeles County property owners affected by the COVID-19 virus may have late penalties cancelled if they are unable to pay their property taxes by the April 10 deadline.
We have no authority to extend the April 10 deadline, as outlined by State Law. However, beginning on April 11, the day after property taxes are due, people unable to pay on time for reasons related to COVID-19 may submit a request for penalty cancellation online. The department has set up a special team to process these requests for those who demonstrate they were affected by the outbreak.
We encourage all property owners who can pay their taxes on time to do so. This revenue helps keep the government running and providing vital services that the public relies on, especially in times like these.
Since County buildings are currently closed to the public during this emergency, there will be no in-person payments. Instead, taxpayers can pay online, via telephone or by mail. There is no cost for e-Check payments online. For online credit/debit card transactions, our card payment processor charges a 2.25 percent service fee.
Taxpayers can also visit https://ttc.lacounty.gov/, to review payment methods and several other online self-service options. Taxpayers may also call (213) 974-2111 for additional information”.
If an investor has taken the first step of a like-kind exchange by selling the old property, and either the 45-day or the 180-day deadline falls between April 1 and July 15, the deadline has been extended to July 15.
When renting a property, it’s important to know what type of insurance should be put in place. If you were living in a home and then decided to move out and rent it, make sure that you change your homeowner’s policy to a landlord’s policy. It makes a big difference when it comes to liability. But what about your tenant? What type of insurance should your tenant carry? There is renter’s insurance which will cover the tenant’s personal property in case of damage. This is a smart move for a tenant. I know this first hand when years ago, my NYC apartment was broken into and I didn’t have renter’s insurance. It’s possible your renter’s insurance policy will even cover your personal belongings that are stolen from your car. So I highly recommend to any renter to get a renter’s policy. However, can a landlord require it?
In fact, a landlord or an HOA cannot require a tenant to carry renter’s insurance to cover the loss of his or her personal property. In reality, it is not that the landlord doesn’t have the right to require it, but the landlord is not the beneficiary. Because California courts have ruled that the failure of the tenant to carry renter’s insurance is not a material breach of the lease, it is assumed that the requirement to procure the insurance policy is no longer enforceable in California.
However, a landlord or an HOA can require renter’s liability insurance as is addressed in paragraph 29 of the California Assoc. of Realtor’s (CAR’s) Residential Lease Agreement. A landlord may additionally want to request to be listed as an “Additional Interest” on that policy so that he or she will be notified if the liability policy lapses or is cancelled. Don’t confuse this with the term “Additional Insured” which is for someone who lives with the tenant and wants to be covered under the same policy. It’s important to note that if a landlord is named on the policy, it would preclude him or her from being able to make a claim against the liability coverage which is not what the landlord is looking for.
As a landlord you should think about your own insurance coverage as well as the potential liability the tenant may incur that could be insured BEFORE renting out your property.
If you ever made an offer on a property in California, you have read an Arbitration Clause. This clause only becomes a part of the contract if both buyer and seller agree to it, meaning they both initial the clause in the contract. And more than likely your agent told you to agree to it because “everyone does” or “it’s better than court” or for no reason at all. Well, agreeing to Arbitration may not be the right decision for you. Let me break it down for you.
If a dispute arises in a real estate transaction over more than $10,000, buyers and sellers in California are required to go to mediation. Mediation is designed for both parties to find a compromise. You may find yourself in a situation where you don’t believe you should compromise. It doesn’t matter — you have to go to mediation. However, as long as you show up to mediation, you have met your contractual obligation. You aren’t required to come to a meeting of the minds. (If the value in question is less than $10,000, you would go to small claims court which is a lot cheaper and expedient.)
Assuming you have tried Mediation or you showed up for Mediation and promptly left, then your next step is Arbitration if you have agreed to it. Arbitration is voluntary but the decision is binding.
1. Your case will be heard faster.
2. The case will be resolved more quickly.
3. It will cost less.
1. You don’t get a jury trial. If you go to court, your case will be heard by a jury of your peers.
2. There is no appeal process; the decision is binding.
3. Although it’s cheaper than court, you have to pay for it in a shorter amount of time while court & lawyer fees are spread out over
a longer period of time.
When I explain this to my clients, they typically don’t sign the Arbitration clauses. They understand that it’s still an option later on. But if a seller is dead set on it, then it can be agreed to in a counter offer. I will say that I’ve never had an client who’s an attorney that was willing to sign an Arbitration clause. And for that matter, the E&O insurance companies typically don’t want Brokers to sign these clauses in listing agreements, because they want to leave their options open.
It’s always a good idea to ask legal counsel if you are unsure of what to do.
Let’s face it, appraisals are one of the scariest parts of a real estate transaction. It can cause a deal to implode very quickly. It’s one of the reasons why having an experienced listing agent on your side is crucial. An agent has to sell a home twice: first to the buyer then to the agent.
I never let an appraiser go to a property unaccompanied. Many appraisers have supra keys; if they think a property is vacant, they will go on their own and then you’ve missed your only opportunity to make an impact on the appraisal. I always meet the appraiser. And I make sure I come armed with recent sales, detailed information about the subject property, and any market stats that may prove helpful.
It never hurts to engage the appraiser. I’ve often heard complaints that an appraiser wasn’t interested in what the agent had to say. I’ve never had that experience. And I always found that if you position yourself in a supporting role and on the appraiser’s team, they are typically receptive to what you have to say and appreciate the effort you’ve made.
If there’s something special about the property, I make sure I highlight it. Showing value to the appraiser is crucial to their calculations. I have put together shiny marketing materials specifically targeting the appraiser in order to illustrate what makes the house unique and worth the price we have sold it at.
If you had multiple offers on a property, show those offers to the appraiser to reinforce the sales price. Buyers ultimately set the price and if you have more than one buyer making similar offers, it’s only more proof that your sales price is justifiable.
It’s also good to know the rules that the appraiser needs to adhere to. When doing appraisals, they can use comps as far back as one year. Lenders always want to see a comp at the asking price, a comp below the asking price, and one above the asking price. If you have a challenging property, you may want to consider getting an appraisal done prior to going on the market. It will help prepare you for what to expect and if the appraisal is strong, I share it with the appraiser in the transaction.
Over the past few months, we have seen an increase of homes on the market in Redondo Beach. Properties are sitting for a longer amount of time. There aren’t as many buyers clamoring over listings, creating bidding wars. And sellers are accepting offers that a year ago they wouldn’t have looked twice at, including contingent offers. All of these factors reflect the slow down that has been expected and seemed imminent, and quite frankly inevitable.
There is definitely a change in the air. Buyers are having an attitude adjustment. They aren’t exhibiting the anxiety that was the driving force behind the real estate market these last five years. Now, they seem to be taking their time and are not rushing to make an offer on a property the minute they see it.
This all seems to indicate that we are on a “turn” in the market. We’re shifting from a seller’s market to supposedly a balanced market where neither buyer or seller has the upper hand. Last go round, we skipped the balanced market altogether. We went from the buyer’s market (2010 – 2012) right into a seller’s market. This time I think it will be a slower transition.
Rising interest rates will also contribute to this market slowdown. Buyers may take pause as they adjust to new rates. If the rates climb high enough, it should put downward pressure on pricing as well which should ultimately propel housing inventory even higher.
If this is a true balanced market, then there will be more negotiating and more concessions. Buyers won’t have to go above and beyond to get a deal done, but sellers will still get a fair price for their homes. I will continue to monitor the market and keep you apprised of any more changes in housing inventory and the health of the market.
Here is a market update for the three Beach Cities, Redondo Beach, Manhattan Beach, and Hermosa Beach. The month of September had more inventory than any month in the past five years (excluding the summer months of 2016). September also had the lowest volume in sales as compared to any month in the past few years.
This slow down – of more properties sitting on the market and less properties being sold – can be explained by a few changes in the marketplace. First, buyers don’t have the same urgency to make a purchase. They have demonstrated more patience and are less likely to make an offer on a property that is less desirable. They are no longer submitting offers on every or any property they see. They are taking their time. Second, some sellers have priced their homes too high. With buyers coming to their senses, sellers can’t put outrageous price tags on properties any longer and expect them to sell immediately. Third, the market has been hit with properties that are less than desirable. These homes, that are impacted negatively by location or some other odd property feature, sit longer on the market as well.
What does this mean or buyers and sellers?
Buyers have an opportunity to get a good deal. They can afford to negotiate harder and demand more terms of a sellers. Case in point, more contingent offers are getting accepted. During the height of the market, a contingent offer was dead in the water. There were too many all cash or high down payment offers in play that a seller didn’t have to entertain a buyer who has to sell something first before they can buy.
Sellers need to make sure their homes are show-ready in order to garner as much money as possible for their properties. Buyers must have a strong emotional response to a property in order for them to make a strong offer. Sellers also should employ the proper pricing strategy or risk sitting on the market.
If you have any questions about this market update or need assistance buying or selling real estate, you can reach me at 310.428.8804
June 27th marked 20 years since I moved to the South bay from the east coast. It should have marked 20 years and 1 day, however my original flight scheduled for June 26th was canceled due to bad weather, and I was forced to reclaim my 3 army-sized duffel bags and 4 oversized suitcases (clearly airlines didn’t charge for baggage back then), and spend the night with my parents so I could turn around and do it all over again in the morning. Not much for superstitions – I think not walking under a ladder is just plain old good sense – I chose not to recognize the bad-weather delay as a sign that I shouldn’t move to California. In retrospect, I think it may have been a sign that I shouldn’t have moved in with my boyfriend, but that’s a topic for a different blog. No, I forged ahead on my cross-country move with high hopes, my MBA, and a Thomas Guide (remember them?).
My transition to the beach life was smooth sailing. (Not literally – I don’t sail and I have an illogical fear of sharks.) But I was already an avid volleyball player and sun worshipper. (Now I can’t wear enough sunscreen.) I enjoy the small town vibe and running into friends wherever I go. I worked in the entertainment industry for years in sales & marketing positions. Then 12 years ago, I earned my real estate license just in time for the market to implode. (I’ve always had impeccable timing.)
Now, with 20 years under my belt as a South bay resident, and 12 of those years as a local Realtor, I hope to share some of my insights about our community and cover one of our favorite topics around here – real estate. We’re proud to live in our bubble with our beautiful beaches, hip downtown areas, highly ranked schools, and forever-on-vacation vibe. The past 20 years has seen a lot of change… some for the better, some for the worse. I will always mourn the closing of Rocky Cola, but I look forward to the opening of new restaurants, Serve on Second being one of the latest incarnations. Metlox greatly enhanced the downtown Manhattan Beach experience; I have mixed feelings about the pending beachfront development in Hermosa which will completely change the look and feel at the pier, but of course bring in more revenue for the city. I think homeowners should have the right to rent out their homes for any length of time, but I grapple with the fact that short term rentals have made our neighborhoods more transient. As a Realtor, I appreciate the re-development: tearing down older homes and building two or three in their place… we need the inventory! But as a resident, I’m not crazy about the additional congestion and traffic that comes with it. Yes, change is inevitable. Our goal should be to preserve the characteristics that make our Beach Cities special, but strive to make changes that enhance our daily lives, our environments, and our well-being… and let’s face it, increase property values! I look forward to addressing these type of issues – and real estate topics specifically – with you in the weeks and months to come.
Let’s face it… quite often town homes don’t have the best floor plans, they are usually tight on space, and you can’t ever seem to forget that you have neighbors. But in this week’s listing update, 1626 Prospect Ave in Hermosa Beach breaks the mold. Let me tell you why.
First of all, it’s a front unit town home that enjoys great curb appeal. Looking out the windows you see green space, trees, open air or the ocean. You don’t feel like your neighbor, Joe, sporting his ubiquitous V-neck undershirt, is on top of you. Second, the 2,500+ sq feet provides ample space with a living room, family room, breakfast area, formal dining room, and charming balcony. The staircase is complemented with a gorgeous tree that reaches for the second story. It’s light & airy and spacious, giving it the feel of a single family residence. The floor plan is well laid out. The property looks in great condition, but there’s still the opportunity to upgrade if you so choose. Finally, the location is walking distance to a park and Hermosa View Elementary. It’s also near restaurants and shops.
1626 Prospect Ave is brokered By: Douglas Elliman of California