*IF AUDIO STOPS PLEASE CLICK ON THE TIMELINE TO CORRECT THE ISSUE* On occasion California courts have to struggle with the issue of what constitutes income for the purpose of calculating child support. In a recent California decision entitled "Marriage of Rothrock," the court of appeal had to determine whether or not an uncharacterized personal injury settlement award that was paid into an annuity, constituted income for the purpose of calculating child support. In rendering its' decision, the court of appeal relied on the common law definition of income as well as a federal statute in determining that the monthly annuity did not constitute income. The court's use of the common law definition was somewhat new, in comparison to recent cases where the same issue presented itself. For a more detailed analysis of the court's decision, click onto the above presentation.

Posted by The Law Offices of Donald P. Schweitzer at 4:11 PM | Permalink | Comments (0)

 

 

 

If you are planning on selling your property in this market you are going to need a strategy. In the last 20 years I have pretty much seen everything and I would like to give you helpful and timely tips to help you get it done right.
 

In Southern California, and most parts of the country, there is a huge standing inventory of homes for sale. This is your competition. It is a buyers market right now and adding another overpriced, unmotivated home for sale in this market is not a positive thing for most realtors. Also, now is not the time to shop for a "discount" realtor; you are going to need the best you can find and listings are "a dime a dozen" right now.

Let’s start with why. If you're not serious about selling your home right now or not willing to set a realistic asking price, then don't list your house at this time because it won't work out well for you, your realtor, or your neighbors. If you are motivated and ready, then come up with a game plan. Some of these may be obvious but hear me out; you may want to re-define your goals and priorities.

First, let’s start with you. Your goal is to find a buyer. This means your tastes and décor choices don't matter anymore. You want to appeal to a future buyer and make your home more appealing and more attractive than any other in this price range. In a perfect world your home would be vacant or professionally staged with no personal items in sight. You will also need to decide what you are really trying to accomplish. What is your goal? Is it a quick and painless sale? Squeezing every penny out of the sale? Cashing out and renting back? Avoiding foreclosure? If you are in an emergency or panic sale mode then your choices will narrow.

Secondly, your property will need to be in tip-top condition. If you want top dollar, consider a professional paint job, inside and out, with up to date neutral colors. Consider new flooring. Depending on price range and your goals, you may want to consider upgraded granite counters, new appliances, and updated baths. If you can not or choose not to upgrade and update then your price expectations should shrink. If your goal is top dollar then these upgrades become mandatory. It’s that simple and it really is your choice.

Consider this before it's too late. The most ideal choice would be to hire an independent licensed and experienced appraiser to give you a realistic valuation of your home. An appraiser can also tell you what those upgrades would be worth before you spend your money needlessly. A room addition, extra bath, or complete kitchen remodel can be valued before you spend a dime. This is an appraiser's job and is money well spent. If you were off in your estimate and listed the property too high you will loose out on potential offers. Conversely, if your listing is too low, you may loose that money that you have invested in remodeling.

Now comes the important part. Here is an example of what most sellers are doing incorrectly right now. If your home is worth say $600,000 most people automatically set their asking price just above that, around $625,000. This makes sense to most people, but that's where the trouble begins. I personally watched a neighbor do exactly that. He listed his house for $625,000 and nothing happened, weeks turned into months and that same property is still listed today, a year and half later, for $399,000. On the other hand, a clever neighbor sold his house for $610,000 to the first buyer he found and generously gave that buyer $15,000 cash back for a "landscaping allowance." The buyer was thrilled to pay the full asking price because he closed and got cash back to start a pool, landscape the yard or go to Hawaii.

Here is another way to look at it. You can go with the herd mentality and make your price the same as everyone else and ride it all the way to the bottom or you can under-price your home and make the sale happen today and avoid any price reductions at all. It’s like catching wave, you need to be at the front, do all your paddling at the beginning and catch it before it drops or you will miss the buyer and be stuck behind the wave always waiting for something to happen. It's not a good bet, but if you price it way under market you can end up with multiple offers and even get an overbid. Here is a secret; what is working right now is buyer incentives directly to the buyer, they are your customer. Instead of dropping your price $10K, give that to your buyer in the form of cash, home improvement gift card, landscaping allowance, luxury items etc. You will create buyer activity.

Lastly, think positive. It's all about finding a win-win deal. What you probably want is to get the house sold as painlessly as possible. So price it right immediately and make the property as marketable as you can afford without wasting time or money. Keep in mind where the market is going. If it's a buyers market and prices are dropping, get it sold quickly and don't try to hold out for a better offer. But remember it's hard to sell any property with "warts” in this market. Think in these terms. A $100 repair that you neglect will take off $1,000 on your final sale price, so cure all the negatives before you list and price it right from the first day and you'll be successful.

Remember to use your appraisers experience and skills in the very beginning not just at the end and you will bargain from a position of knowledge and strength.

Written by Clifford Diamond, CREA

 

 

 

 

Posted by The Law Offices of Donald P. Schweitzer at 12:49 PM | Permalink | Comments (0)

If you need to know the value of a piece of real estate anywhere from a month ago to a decade ago, it can be done. I’ll show you how it can be done, how it can benefit you, and how an appraiser arrives at value even long after you have sold and moved away. As an experienced appraiser in Southern California with over 20 years experience I would like to share my real estate experience with you.

What is a historical appraisal? Really all appraisals are just a snap-shot of time. Most appraisals are for current market value. So the very day the appraiser comes out and inspects the property the value is valid on that date only and could become no longer valid the very next day. There could be an economic or natural disaster that could change the value overnight. With a historical appraisal the effective date is what the property was worth on that required date, anywhere from last month to 10 or more years ago.

What is the purpose of a historical appraisal? Many and varied reasons. Many accountants and financial planners need to determine the value of property held in estate when the owner dies. This is known as a “Date of Death” appraisal. The IRS will want a professional appraisal in the file to document the value as of that date. Attorneys use the historical appraisal to determine what assets belong to which party. For example let’s say a single person bought a home in 1985 but met and married current spouse in 1995 and separated in 2005. It would be important to know the fair market value on those dates for fair and equitable dissolution. The same would be true of business partners in a property or even family members that pooled financial resources but need to move on.

Are there limitations to what can be done? You would think if you had sold the property years ago and moved away that it could not be done. That’s not true. I recently appraised a property 10 years back, that at the time it was only 1/2 the size, was before the swimming pool, and the owner sold and moved out long ago. In this case an exterior “drive-by” appraisal was called for and the house was valued based on the previous size, minus the pool and without bothering the new owner. In this case both opposing appraisals came in very close to each other and settlement was that much easier.

A historical appraisal sometimes involves similar principles of New Construction Appraisals where only specifications on paper exist and the appraiser determines the value as if completed to your plans and specs. This is sometimes referred to as a Feasibility Study and used to determine if what you plan on building is worth what you expect it to be worth and what adjustments in the build will increase or decrease value.

In these more complicated retro-active or historical appraisals it is important to find an appraiser with years of experience in that market area. An appraiser with sufficient experience may have insight in this area before, during and after changes that have occurred over the last 20 years in that target market. Additionally there are certain appraisal formats that are acceptable for use and others that are in direct OREA violation.

Lastly in historic appraisals, the use of comparable data must all fall before the effective date of the appraisal. If your effective date is 1-17-94 all sales comparables must fall before that date, none after. If for example you needed to know the value of a property sometime around the Northridge earthquake, using sale comps before or after would have tremendous impact on that value.

If the appraisal is for court work we may be called on the witness stand to testify to our report and defend it against the opposing attorney and his witness. There are additional fees for this type of testimony. As a professional appraiser it’s my responsibility to be the best possible resource for my client.

Written by

Clifford Diamond, CREA

Posted by The Law Offices of Donald P. Schweitzer at 2:21 PM | Permalink | Comments (0)

Potential buyers and investors have given considerable thought to both housing prices and interest rates recently for two reasons:  First, they have been intrigued by comments from national economists about the statistics supplied by the Department of Housing an Urban Development that showed a 10.2 percent drop in the rate of new single-family home sales between July 2006 and July 2007.  Second, mortgage money for many homes will be more difficult (and possibly more expensive) to obtain, given the sub prime fallout and reports that borrowers in the “jumbo” category (loan amounts greater than $417,000) were facing increased scrutiny.

The idea of “saving my money until home prices come down” has probably become a contradiction in terms, at least for the foreseeable future.  Yes, housing is cyclical but it usually does not go backward for very long, if at all.  The additional money you save now probably will not offset the potential appreciation or the fatter monthly payment that could result if interest rates rise.

For example, if a $250,000 home appreciated 5 percent in the next year, could you sock away an extra $12,500 in after-tax savings to counter that gain?  This also does not take into account additional tax savings from the mortgage-interest deduction.  Or, if the market remains flat and mortgage interest rates rise, will you still even be able to qualify for the home of your choice?
Mortgage-interest news has not been positive.  The inflation and energy fears that were in the news two years ago have now taken a backseat to how scarce mortgage money could become~ especially for jumbo loans.

So, if you find the home you’ve always wanted and have your financing lined up, whether it be a primary residence, a second home or investment property, buy it and hold on to it.  Real Estate has been a terrific long-term investment. 

While the market “might have peaked” nationally, housing is local.  Boom markets, where real price growth increases at least 30 percent over three years, have been heavily concentrated in California (21%), the Northeast (18%), and Florida (11%).  And, according to the Federal Deposit Insurance Corp, boom does not necessarily lead to bust, only 17% of all housing booms ended in busts.  Most busts were preceded by a significant stress in local economies, such as loss of jobs.  A bust is defined as a nominal drop of 15% over five years.  Having that type of decline, for that long would require a dramatic event.

Do not take all national housing news and apply it as gospel in each and every neighborhood.  Housing will continue to work well as a long-term investment as long as strong fundamentals are in place.

Scott Wilson
President/Broker
Futura Financial Inc.
626-442-1888

 

 

 

Posted by The Law Offices of Donald P. Schweitzer at 4:47 PM | Permalink | Comments (0)