Losing a loved one is never easy, and the thought of sorting through their belongings can feel overwhelming. Whether you plan to sell, rent, or move into their home yourself, having a clear strategy can make the process more manageable. Here’s a step-by-step guide to help estate executors, probate handlers, inheritance heirs, and anyone following the SORT method, efficiently prepare a home for the next chapter.

Step 1: Start with Important Documents

Begin by identifying and organizing crucial documents. This includes trusts, wills, social security cards, bank statements, birth certificates, and death certificates. These documents are essential for legal and financial matters, so ensure they are set aside and easily accessible.

Step 2: Declutter Systematically

Tackling an entire house at once can be daunting. Instead, focus on one room at a time. Start with larger, less cluttered areas like the living room or family room. This approach allows you to see immediate progress, which can be motivating. Use this space to sort items into four categories as part of the SORT method:

1. Sell: Gather items that hold monetary value. Consider consulting an estate sale company to evaluate these possessions. Their expertise can help you understand what is genuinely valuable.

2. Offer: Set aside items that you want to offer to family members or friends. Ensure everyone has a chance to look through these items before donating them.

3. Retain: Keep items of sentimental value or those you wish to hold onto. Be mindful not to accumulate too much in this category, as it can become overwhelming.

4. Trash: Identify and dispose of items that don't fit into the other categories. Be prepared for this pile to grow as you progress through the house.

Step 3: Take Your Time

If possible, avoid rushing through this process. Dedicate a little time each day or a few hours each week to go through the home. This gradual approach helps prevent burnout and allows you to make thoughtful decisions without feeling overwhelmed.

Step 4: Communicate Clearly

When offering items to others, clearly communicate any limitations, such as your ability to help transport or lift heavy objects. This clarity helps avoid misunderstandings and ensures a smoother process for everyone involved.

Step 5: Honor the Stories

While sorting through belongings, take the time to honor and share the stories behind them. These narratives can hold immense sentimental value, even if the items themselves do not. Understanding the history and significance of certain possessions can bring comfort and connection during a difficult time.

Step 6: Be Mindful of Emotional Triggers

It's natural for emotions to surface during this process. Recognize if you're holding onto items out of grief or fear of loss rather than genuine sentimental value. Allow yourself to feel and process these emotions, but strive to be practical in your decision-making.

Step 7: Dispose of Items Responsibly

For items that don’t fit into the sell, offer, or retain categories, consider responsible disposal options. Companies like Junk King or similar can assist with larger disposals. Be cautious about renting dumpsters, as they can be costly and may require HOA approval.

Conclusion

Preparing a home after the loss of a loved one is a challenging task, but with a methodical approach, it becomes more manageable. By following the SORT method and taking the process one step at a time, you can effectively organize and honor your loved one's belongings while preparing the home for its next phase.

Remember, you’re not alone in this. If you need additional support or resources, don’t hesitate to reach out. We’re here to help you every step of the way.

Losing a loved one is never easy, and dealing with the aftermath can be overwhelming. One of the first steps for beneficiaries is understanding who the trustees are and what their responsibilities entail. If you're a beneficiary, you have the right to know this information. Here’s a guide to help you understand your rights and responsibilities during this process.

When to Ask About Trustees

You can ask about who the trustees are whenever you feel comfortable, but it’s best not to wait too long, especially if there are family dynamics or situations that make you uneasy. Successor trustees have a fiduciary duty to all beneficiaries, which includes providing an accounting of the estate and giving you a copy of the trust. The trust document will clearly list who the successor trustees are, giving you a clear picture of who is responsible for managing the estate.

The Importance of Timely Communication

It's crucial to communicate openly and honestly to foster harmony within the family. For example, I had a client who lost her husband and was too distraught to inform her stepchildren right away about the passing. When a family member offered to call them for her, they were immediately bombarded with questions about the trust, even though it was the day after their father's death.

If you ask about the trust immediately after the news of a loved one's passing, the response you receive may be different than if you wait a few days. People generally expect initial conversations to focus on funeral arrangements and immediate needs rather than estate details and how much they stand to inherit.

The Role of the Successor Trustee

Successor trustees have several responsibilities, including:

• Providing an accounting of the estate: This ensures transparency and trust among beneficiaries.

• Distributing copies of the trust: This document will outline who the trustees are and any conditions for the distribution of assets.

A well-communicated plan for transparency can prevent conflicts. If you don’t have a copy of the trust right away, communicate the steps being taken to arrange the funeral, notify family members, and take care of initial responsibilities. Assure that once these tasks are completed, the trust will be reviewed, beneficiaries will be identified, and relevant information will be shared.

Conditions and Instructions in Trusts

Trust documents often contain specific conditions or instructions for the distribution of assets. For example, a trust might state that a house cannot be sold until six months after the grantor's death or that funds are only available if certain conditions are met. These stipulations can sometimes seem unusual, but they are legally binding.

Addressing Concerns with the Successor Trustee

If the successor trustee is not communicating effectively or is withholding information, it's vital for beneficiaries to express their discomfort. Transparent communication and clear resolutions before conflicts arise can foster family harmony and ensure everyone is on the same page.

Conclusion

Understanding your rights and responsibilities as a beneficiary can make the probate process smoother and more transparent. Open communication, timely queries, and a thorough understanding of the trust document are key. If you have any questions or need assistance with an inherited property, feel free to call me at 760-697-5661.

By empowering yourself with knowledge and fostering open communication, you can help ensure a fair and harmonious estate settlement process.

This blog has been written based on professional experience and is not meant to be taken as legal advice, if you need legal advice, reach out and we will connect you with one of our trusted law firms.

Inheriting a home can bring both joy and complications, especially if you have siblings involved. Whether you want to move into the home or own it entirely, buying out your siblings is a common route. But who pays for the repairs? Let's explore the steps and considerations for a smooth sibling buyout process.

Navigating the Sibling Buyout

When you've inherited a home and want to buy out your siblings, the first thing to address is the financial aspect. Your siblings might be generous enough to give you their share, but often, a monetary transaction is required. Before you proceed, you need to reach an agreement on the value of the home and understand who will handle the necessary repairs.

Who Pays for Repairs?

Determining who pays for repairs ultimately depends on what you and your siblings can agree upon. Here are two ways to approach this:

1. Get a Professional Opinion of Value

Hiring a real estate agent to provide an opinion of value can serve as a helpful reference point. Unlike a formal appraisal, this opinion offers a market-based estimate considering the property's condition. While not suitable for IRS or loan purposes, it provides a practical discussion basis.

2. Opt for an Appraisal

For a more definitive valuation, consider getting a formal appraisal. Though it costs more (several hundred to a thousand dollars), it includes a detailed examination of the property’s condition, nearby comparable sales, and other factors. You can ask the appraiser questions to ensure they considered all necessary repairs.

Consider a Home Inspection

To avoid any disputes about the property's condition, a home inspection can be invaluable. Spending a few hundred dollars on an unbiased report will give you a comprehensive view of needed repairs, which you can share with your siblings. This helps in making informed decisions and avoiding any hidden surprises.

Reaching an Agreement

When discussing repairs and valuations with your siblings, aim for open and clear communication. Here are some steps to ensure a fair and peaceful resolution:

• Consult with Professionals: Consider hiring professionals such as attorneys or title insurance agents to handle the title transfer and ensure you inherit the property tax basis correctly.

• Take a Break When Needed: If discussions get heated, take a step back. A cooling-off period can provide clarity and help all parties refocus on their goals.

• Understand Your Motivations: Reflect on why you want to buy the home. Whether it’s to stay close to family or preserve memories, communicate your reasons to your siblings.

Financial Considerations

Funding the Buyout

If you have sufficient savings, you can pay your siblings directly. If not, securing a loan might be necessary. Depending on the home's equity, you might use it as a down payment, reducing the need for out-of-pocket cash. Remember to account for closing costs in your financial planning.

Deciding to Sell

If buying out your siblings isn't financially feasible or if the emotional weight of the home is too much, consider selling the property. Evaluate all options carefully to make a well-informed decision you won’t regret.

Conclusion

Inheriting a home brings both emotional and financial responsibilities. By understanding who pays for repairs, reaching an agreeable value, and seeking professional advice, you can smoothly buy out your siblings and take full ownership. Reflect on your motivations and communicate openly to maintain family harmony throughout the process.

If you have any questions about buying out siblings or leveraging inherited property, feel free to contact me for a free discovery call at 760-697-5661.

If you've lost a loved one, you know how challenging it can be. But it gets even tougher when you inherit a home and face the possibility of losing it. It’s a daunting scenario many people find themselves in, feeling scared, overwhelmed, and hopeless. However, there are strategic steps you can take to save your inherited home from foreclosure.

Understanding Your Situation

A couple of years ago, I met a family who went through this exact situation. They had lost their mom, who owned the house. The daughter lived in the home with her husband and two children. They believed they couldn't afford to live anywhere else and thought the house wasn’t worth much.

Complicating things further, they mistakenly assumed that because their mom had a reverse mortgage, there was no need to make any mortgage payments. What they didn't realize was that reverse mortgages usually need to be paid back within a year of the homeowner’s passing. Their brother, who lived out of state, was frustrated as he felt his sister was taking advantage of their mother by living rent-free with her family.

This story may sound familiar if you're dealing with family opinions while trying to manage your inherited home. It's important to remember that while others may not fully understand your situation, there are steps you can take to find a resolution.

Strategic Steps to Save Your Home

Here are crucial steps to consider:

1. Determine the Home's Value:

• Get a professional appraisal or a market analysis to find out how much the home is worth.

2. Communicate with the Bank:

• Banks prefer not to foreclose. They might offer options like refinancing, which could allow you to take over the mortgage.

3. Explore Your Options:

• If foreclosure is imminent, you might consider selling to an investor or requesting a delay in the trustee's sale from the bank to settle the estate.

4. Seek Professional Assistance:

• Engaging with a real estate attorney or financial advisor can provide valuable guidance and support.

Fear often freezes people, but taking action is crucial. Here’s a story of another family to illustrate this:

The family was facing foreclosure within a week. Despite having options like selling to an investor or delaying the sale, they did nothing out of fear. Consequently, the property was sold at a trustee sale for far less than its value, leaving them with nothing.

Leveraging Resources and Support

Knowing who to call and what to do can make all the difference. California, for instance, has implemented programs to help people facing foreclosure. Check with your state's resources; there might be support and free money available.

If you’re unsure where to start, reach out to a lender. They are professionals in finding financial solutions. Banks generally don’t want to foreclose because it creates more problems for them. Always document your conversations with bank representatives, including their names and IDs, and follow up regularly.

Real-life Solutions

Take the case of Renee, who inherited a home filled with cherished memories. She refinanced it but later found herself overextended and embarrassed about potentially losing it. Despite her feelings, she took action by exploring state programs and speaking with lenders, discovering that there were ways to get help.

Another family I assisted owned a duplex in San Diego. After the father's passing, the mother and daughter faced foreclosure. They were transparent with their lawyer and the court about their inability to pay the mortgage. This honesty bought them extra time to sell the home, allowing them to use the equity to purchase a more manageable property.

Conclusion

If you’re in a similar situation, remember that there are options. Talk to the bank, seek legal advice, and explore state programs designed to help. Don’t hesitate to reach out for professional assistance.

If you have any questions or need help creating a plan to avoid foreclosure, call me at 760-697-5661. Let's work together to find a solution and secure your inherited home.

Inheriting a home can be a bittersweet experience—it comes with both emotional and financial considerations. One common question you might have is, "What happens to the property taxes when you inherit a home in California?" In this blog, we'll explore how different choices you make could affect your inherited property's tax situation.

My name is Scott Stollar, a realtor in California who has personally been through the process of inheriting a home. I got my real estate license to help others turn this potentially stressful experience into a positive one. Today, we'll look at Propositions 58 and 193, and when you should consider these exemptions to transfer property taxes.

Understanding Prop 58 and Prop 193

Proposition 58

Prop 58 allows children who inherit a home from their parents to transfer the existing property tax basis, thereby preventing a reassessment of the property's value. This is particularly beneficial if your parents bought the home decades ago at a much lower price, as the property taxes will remain based on that original, lower value.

Proposition 193

Similarly, Prop 193 extends these benefits to grandchildren inheriting property from their grandparents. To qualify, you'll need to establish the familial relationship, which often involves some paperwork, but the potential tax savings can make it well worth the effort.

When These Propositions Don't Apply

Let's discuss situations when transferring the property tax basis might not work:

1. You Plan to Sell the Property: If you decide to sell the inherited home because of bad memories or other reasons, the property taxes won't be transferred to you. In this case, the property will be re-assessed based on its current market value.

2. You Rent Out the Property: If you decide to rent out the home instead of living in it, you won't be eligible for the beneficial lower property taxes. These exemptions are intended for primary residences only.

3. Recent Purchase: If your parents or grandparents bought the home recently and its value hasn’t appreciated significantly, it might not make sense to transfer the property tax basis. Always check the current market conditions and consult with a CPA to make an informed decision.

Prop 19 and Special Cases

Proposition 19 allows people over 55, those with certain disabilities, and victims of natural disasters to transfer their property tax basis when selling their home within California. This can offer additional flexibility if you fall into one of these categories and plan to move after inheriting a property.

How to Check Property Tax Details

If you're unsure about the current property tax situation, you can easily find this information online. For example, the San Diego County Assessor's website allows you to look up property tax bills by entering the address. This will help you see if there are any outstanding taxes and how much has been paid in recent years.

Concluding Thoughts

Navigating the property tax implications of inheriting a home can be complex, but understanding the basics of Props 58, 193, and 19 can make a significant difference. Make sure to consult with a CPA to explore all your options and determine the best course of action for your specific situation.

If you have more questions or need help navigating this process, feel free to contact me. I'm here to help make your experience as smooth as possible. Set up a free discovery call to address all your questions and put your mind at ease. Reach me at 760-697-5661.

Best regards,

Scott Stollar

Owning property can be rewarding, but it also comes with its set of challenges. One of the most distressing issues property owners face is dealing with squatters. These unauthorized occupants can cause stress, potential legal battles, and financial loss. This guide will help property owners, real estate investors, landlords, and inherited property owners understand how to prevent and remove squatters from their properties effectively.

Understanding Squatters and Their Rights in California

In California, squatters have certain rights, sometimes making eviction complex. Known as "adverse possession," these laws can allow squatters to gain legal ownership of a property if they meet specific criteria over time. However, property owners can take steps to prevent this from happening and remove squatters legally.

Types of Squatters

There are generally two types of squatters:

1. Unwanted Intruders: These individuals break into a property and start living there without any prior permission.

2. Combative Occupants: These are people who were allowed to stay initially, such as caretakers, but refuse to leave after their right to live there has been revoked.

How to Prevent Squatters

1. Secure Your Property

Ensuring your property is secure is the first step in preventing squatters:

• Inspect Windows and Doors: Check for any vulnerabilities. Are they old and easy to break into? Consider upgrading to more secure options.

• Use Physical Barriers: Placing sticks in the track of sliding doors or windows can prevent them from being opened from the outside.

• Board Up Windows: If the property is in a high-risk area, boarding up windows can be an effective deterrent.

• Reinforce Doors: Secure entry doors by adding additional locks or screwing them to the frame. This makes it harder for squatters to break in.

2. Install a Security System

Investing in a security system can provide peace of mind:

• Choose a Reliable Company: Ensure the company has a good track record and quick response times. Ask local police for recommendations.

• Consider Financing Options: Many security companies offer financing for equipment, spreading the cost over the first year of the contract.

3. Use No Trespassing Signs

Posting "No Trespassing" signs can deter potential squatters:

• Clear Indication: This makes it clear that unauthorized entry is illegal, providing you with more legal options should someone break in.

• Contact Information: Include contact details for inquiries to minimize nosy neighbor interruptions.

How to Remove Squatters

1. Legal Eviction Process

If a squatter has already moved in, follow the legal eviction process:

• Hire an Attorney: Given the complexity of eviction laws, particularly in California, hiring an attorney can help ensure you follow the correct procedures.

• File an Unlawful Detainer Lawsuit: This is the legal process for evicting someone who refuses to leave.

2. Cash for Keys

Offering a financial incentive for squatters to leave can be quicker and less costly than a lengthy legal battle:

• Negotiate a Settlement: Determine how much it would cost to evict the squatter legally and offer a portion of that amount for them to leave voluntarily.

• Avoid Damage: This method can also minimize potential damage to the property from disgruntled squatters.

3. Build Relationships with Neighbors

Your neighbors can be your eyes and ears when you're not around:

• Establish Communication: Inform neighbors about the situation and ask them to report any suspicious activity.

• Neighborhood Watch: Encourage a community approach to keeping the area safe.

Conclusion

Dealing with squatters can be challenging, but taking proactive steps to secure your property and understanding the legal landscape can make the process smoother. If you're facing issues with squatters or want to prevent them from taking over your property, following these tips can help protect your investment and peace of mind.

For personalized advice and assistance, don't hesitate to reach out to our experts. We're here to help you keep your property safe and secure.

---

Remember, every situation is unique, so consider consulting with a legal professional to ensure you're taking the right steps for your specific circumstances.

Scott Stollar

760-697-5661

www.sellitscott.com

sellitscott@kw.com

DRE 02136497

Navigating the probate process can be daunting, leaving many people wondering if they truly need an attorney to help them through it. The short answer is no, you don't absolutely need one. The probate process, known as "pro per," allows the estate's administrator to represent themselves without legal assistance. While this route might save on attorney fees, there are several factors to consider before making your decision.

Understanding Probate Fees

Probate fees in California are dictated by the state, but some attorneys may add extra charges for additional services. If cost is a concern, it's essential to ask for a detailed fee structure during your initial consultation. However, if hiring a skilled attorney can simplify the process and ease your worries, don't let financial constraints hold you back. Be upfront about your budget and expectations—many attorneys are willing to work with you.

Is Probate Even Necessary?

Before deciding on legal representation, determine if probate is necessary. In California, probate is required if the deceased's assets exceed $166,000. However, there are exceptions and alternatives:

• Real Estate: Typically, real estate holdings will push the estate's value over the threshold, necessitating probate unless held in a trust.

• Personal Property: Mobile homes and other personal property might not require probate if they don't exceed the value limit.

• Wills and Trusts: If there's a will, probate is usually required. A trust, however, can bypass probate entirely. 

Alternatives to Probate

There are several ways to avoid probate, especially when it comes to real estate:

• Right of Survivorship: Setting up property vesting with the right of survivorship ensures that the property automatically passes to the surviving owner, thus avoiding probate.

• Joint Tenancy: Holding property as joint tenants can provide similar benefits, passing ownership directly to the surviving tenant.

• Community Property with Right of Survivorship: Married couples can also use this method to avoid probate.

• Transfer on Death Deed: This deed allows property to transfer directly to a named beneficiary upon death, bypassing probate.

Consulting an attorney and a tax professional when deciding how to vest property is crucial. Incorrect vesting can significantly impact property taxes, capital gains, and income taxes.

Managing Personal Property

If the estate includes personal property like retirement accounts, life insurance policies, or stock brokerage accounts exceeding $166,000, probate might be necessary. However, designating beneficiaries for these accounts can help avoid probate. When a beneficiary is named, the asset transfers directly, bypassing the probate process.

Seeking Professional Guidance

While it's possible to handle probate independently, consulting with an experienced estate attorney and a tax advisor ensures that all legal and financial aspects are correctly managed. They can provide invaluable guidance on the best strategies for your unique situation.

If you have questions or need a referral to a reputable estate attorney, feel free to reach out. I'm connected with several excellent professionals who can assist you through the probate process.

Contact me at (760) 697-5661 or email sellitscott@kw.com

Conclusion

Deciding whether to hire an attorney for probate depends on your specific circumstances and comfort level with the legal process. While it's possible to go through probate without legal assistance, professional guidance can streamline the process and provide peace of mind. Evaluate your options, consult with professionals, and choose the best path for you and your loved ones.

Have more questions or need personalized advice?

Schedule a discovery call with me to explore your options. 760-697-5661

Scott Stollar

760-697-5661

www.sellitscott.com

sellitscott@kw.com

DRE 02136497

Inheriting a home from a family member can be both a blessing and a burden. While it may offer financial relief or a place to call your own, it also comes with its unique set of challenges. One common scenario that many face is being approached by investors who want to pay cash for the inherited property.

While the idea of a quick and hassle-free sale might be tempting, it's essential to consider whether this is the best financial decision for you. This blog post aims to guide you through the critical factors to consider when approached by cash investors, the emotional and financial implications, alternative options, and key questions to ask to ensure you're making the best choice for your situation and keep you out of trouble with the law and other beneficiaries.

 Understanding the Offer 

When an investor approaches you with a cash offer for your inherited home, it's crucial to understand the specifics of the offer and how it aligns with your financial goals. Here are a few key factors to consider:

Market Value: Before entertaining any offer, obtain a professional appraisal to understand the current market value of the property. Investors often offer cash deals below market value for a quick transaction, so knowing your home's worth will give you a baseline for negotiation.

Offer Details: Examine the offer closely. What are the terms of the sale? Are there any contingencies? Is the offer "as-is," meaning the investor won't require you to make any repairs or improvements? Understanding these details can help you gauge whether the offer is fair.

Closing Timeline: One of the appeals of a cash offer is the promise of a quick closing. However, ensure that the timeline fits your needs. Investors often aim to close within days or weeks, but if you need more time to plan or say goodbye to the home, this may be a significant consideration.

Who will be watching out for you during this process? It's crucial to have someone in your corner who has your best interests at heart, usually, this person isn't the investor. This person could be a Realtor who could often get more than one investor to write you an offer for the house

Financial and Emotional Considerations

Selling an inherited home is not just a financial decision; it's often an emotional one as well. Here are some benefits and drawbacks:

BENEFITS

Financial Security: A cash sale can provide immediate financial relief, especially if you have urgent financial needs or debts to pay off.

No Repairs Needed: Selling the home "as-is" means you won't have to invest in repairs or upgrades, which can be both time-consuming and costly.

Quick Sale: The speed of a cash sale can be appealing, allowing you to move forward without the lengthy process typically associated with traditional home sales.

DRAWBACKS

Emotional Attachment: Letting go of a family home can be emotionally draining, especially if it holds sentimental value or memories. Consider if you're ready to part with the property.

Potentially Lower Offer: Cash investors often seek to buy properties at a discount. Make sure the offer is worth the potential loss in equity.

Long-Term Financial Impact: Consider the long-term impact of selling the home. Will the immediate cash influx outweigh other potential financial benefits, such as rental income or appreciation in property value?

Legal Ramifications: Selling an inherited home may have legal implications that you need to consider, such as obligations to other beneficiaries. It's crucial to consult with a lawyer and/or financial advisor before making a decision. Depending on whether the inherited home is in a trust or probate and how many beneficiaries there are will also determine whether you can even sell to an investor right way or not.

Alternative Options

Before deciding to sell to a cash investor, explore other ways to leverage the inherited property for financial gain:

Renting: Renting out the property can provide a steady stream of income while allowing you to retain ownership and benefit from potential property appreciation. Being a landlord also provides certain tax benefits.

Home Equity Loans: If you need a lump sum of money, consider taking out a home equity loan or line of credit. This allows you to tap into the home's value without selling it. There are many options to get cash from a home that you inherited and even quickly if needed.

Traditional Sale: Selling through a real estate agent can potentially yield a higher sale price, although it may take longer and involve more effort, such as staging and showing the home.

Inheritance Loan: If you need immediate cash but want to keep the inherited home, an inheritance loan is an option. These are short-term loans that use the value of the property as collateral.

Key Questions to Ask

If you decide to entertain offers from cash investors, make sure to ask the right questions to ensure transparency and fairness:

How did you determine your offer price? Understanding their valuation method can help you assess whether the offer is reasonable.

How much do you expect the home to sell for after you complete your repairs? (Key insight: a licensed Realtor would have to tell you this, an investor does not)

Can you provide references or testimonials? Speaking to others who have sold their homes to the investor can provide insight into their credibility and reliability.

What are the terms of the sale? Ensure you understand all the terms, including any contingencies, closing costs, and timelines.

Will I need to make any repairs? Clarify whether the sale is "as-is" or if the investor expects any repairs or improvements.

What is your closing timeline? Make sure the proposed timeline aligns with your needs and circumstances.

Whose money will the investor use? Is it a loan or their funds? This can make a big difference in the closing process.  

Case Studies

Case Study 1: Immediate Financial Relief

John inherited his parent's home, but was struggling with overwhelming debt. An investor offered him a cash deal that allowed him to pay off his debts and avoid foreclosure. While the offer was below market value, the immediate financial relief made it a worthwhile decision for John.

Case Study 2: Long-Term Gain

Sarah inherited a home in a growing neighborhood. Instead of selling to an investor, she chose to rent it out. Over several years, she generated substantial rental income and benefited from the property's appreciation. When she eventually sold the home through a real estate agent, she realized a significant profit.

Case Study 3: Emotional Attachment

Emily felt a strong emotional connection to her family home and wasn't ready to sell. She decided to move into the house and took out a home equity loan to cover her financial needs. This allowed her to maintain the emotional connection while also benefiting from the home's value.

Conclusion

Selling an inherited home to a cash investor is a significant decision that requires careful consideration of both financial and emotional factors. While a quick cash sale can offer immediate relief and simplicity, it's essential to weigh the potential drawbacks and explore alternative options.

Before making a decision, understand the market value of your home, evaluate the offer details, and consider the long-term financial impact. Ask the right questions to ensure transparency and fairness, and don't hesitate to seek professional advice to guide you through the process.

Remember, there is no one-size-fits-all answer. Your unique financial situation, emotional readiness, and long-term goals should guide your decision. Whether you choose to sell, rent, or hold onto the property, make sure it's a choice that aligns with your best interests.

If you're navigating this complex decision and need expert guidance, our team at Sellitscott is here to help. Contact us today for a free consultation and take the first step towards making an informed, confident decision about your inherited property.

Scott Stollar

760-697-5661

www.sellitscott.com

sellitscott@kw.com

Are you struggling to find a home in San Diego County that fits within your budget? You're not alone. San Diego may be known for its stunning beaches, scenic parks and bustling nightlife but it is also a place where buying a home is a nearly impossible task. In addition to low inventory, many people do not realize that big businesses that pay their employees well are moving to the area. With the median yearly income increasing 7.8% in the past year*, the ability for new people moving to the area to afford these homes is present. In this blog post, we'll dive into what is keeping house prices high in San Diego County and what you can do to be better prepared when entering the housing market.

Limited Housing Supply

One of the main reasons house prices in San Diego County are skyrocketing is due to the decreased supply of houses on the market. Available homes for sale remain at an all-time low and new construction homes have not kept pace with demand. 

Local big businesses such as Qualcomm, General Atomics, and Illumina are drawing in a plethora of high-wage workers every year, leading to a shortage in affordable housing options. It's a simple case of supply and demand. As the demand for housing rises, so do the prices. Many ask about foreclosures but fortunately for homeowners, the amount of property owners 3 months or more behind in their mortgage payments is at an all-time low.

Tied to the Tech Industry

San Diego's economy has undergone a considerable transition in the past few decades, shifting from its traditional ties to the military and tourism industries to a more tech-based economy. Companies like Qualcomm and Illumina have a significant impact on the local economy due to their extensive job opportunities and high wages. Think Qualcomm isn’t a big name anymore? Think again, your phone’s hardware and that inflight wifi are a couple examples Qualcomm tech is working on.

Many of these companies also have supporting operations with a full staff that is highly paid. For example, if a corporation has a flight department, that department will have several mechanics, safety attendants, pilots etc. on staff.

As a result, the influx of money leads to an increase in housing demands and prices.

BioTech Industry

Not only are there several large corporations based in San Diego, many blue chips are expanding in the area. Walmart is building an expansive new pharmaceutical campus. Kaiser and Scripps have long held footholds in North County and continue to expand. Life sciences is a large sector in the San Diego economy that is growing and expanding. With the Boomer generation entering their golden years and looming largest transfer of wealth in United States history, it’s safe to say that many will be supporting the products that these corporations create.

Lack of Affordable Housing Opportunities

Affordable housing options are almost non-existent in San Diego County. The price to rent or buy property is exceedingly high, making it challenging for low-to-moderate income families to afford a home. It is important for people who have always rented to keep in mind that rent is reflected in mortgage rates. If the cost of money is higher for an investor to purchase a home< i.e. mortgage interest, then the rent will be higher. Owning a home secures your cost of living over the life of the mortgage.

Some say the lack of affordable housing is due to the failure of local policy makers to implement affordable housing regulations. While local policy makers have created requirements for affordable housing units when new properties are built, there simply are not enough new properties being built to satisfy demand of any economic level. According to several long term housing builders, the new building codes implemented in California have done more to fund construction supply business than provide affordable or safe housing for people.

Fortunately, core housing affordability is actually starting to rise across the nation. Americans on average are spending 29% of their income on housing.

The Looming Recession

While most of America has waited for a recession and a housing market crash over the past year, few have stated we are beginning to see a “rolling recession” or a “tale of two economies.” During the pandemic Americans were spending most of their discretionary income on products and experiences, now we're seeing a shift where Americans are again spending on services. This “rolling recession” is affecting different industries at different times. In the past a recession has affected the entire economy at once, this is not what we have seen so far.

What Can You Do?

While it might feel hopeless for homeowners or potential home buyers in San Diego County, you can still take action. Consider interviewing the real estate agent that you work with. Realtors® are not the same. If you are a homeowner you want to find one who can create options to expose your home to the right buyers regardless of volatile interest rates, as we can see from this blog, there are buyers who can afford homes right now. When you are buying a new home for the first time or you are moving into your second or third, it is important to understand the market. Have your Realtor® show you homes slightly above and slightly below your price range, this should help you understand the difference in the value of homes currently.

Ask how well your agent understands housing in San Diego. If you want character charm and a single level ranch under $1.5M you will need someone who knows where to find that. Also, since there are so few homes available for sale, ask how they plan to find you a home and share how that strategy has been successful recently. According to NAR, at the end of Q2 2023 fewer than 8% of Realtors® have 4 or more transactions for the year.

In Conclusion

Big businesses have a double-edged impact on the housing market. While they bring economic growth, they also drive up demand and house prices, leaving individuals and families struggling to find affordable homes. However, with the right guidance and advocacy, it is possible to navigate the challenges presented by big businesses and find a home in San Diego County without breaking the bank. With some research and effort, your perfect home is within reach.

For a customized strategy to get the most for your current home while limiting capital gains taxes and a tailor-built strategy to find your next home, contact Scott Stollar today.

Scott Stollar

760-697-5661

www.sellitscott.com

sellitscott@kw.com

Resources for this article:

KW Research 2023

https://www.point2homes.com/US/Neighborhood/CA/San-Diego-Demographics.html#IncomeFinancial

https://sandiegolifechanging.org/blog/year-san-diego-corporate-expansions/

One of the most significant assets that people inherit is a home left by their loved ones. In fact, millennials are expected to inherit the largest transfer of wealth in United States history of approximately $68 trillion dollars.

However, inheriting a home through the probate process can be a challenging and overwhelming task. Probate refers to the legal process of administering the estate of a deceased individual. During the process, the executor of the estate distributes the funds and assets to the beneficiaries as per the decedent’s wishes or state law if there is no will. After you inherit a home through probate, there are several options available to you, depending on your situation. In this blog post, we will explore some of the options that property heirs have when inheriting a home through probate.

5 Options When Inheriting a Home:

1) Sell the Property

Selling the property is one of the most common options available to property heirs. It allows you to liquidate the asset and convert it into cash. It is important to hire an experienced Realtor® who understands the probate process. An experienced agent can help prevent frustrating delays for the administrator, beneficiaries and heirs. 

When you choose to sell an inherited property there are usually three strategies. The best strategy for you will depend upon several factors, including the preferences of the heirs and whether the administrator has full or limited authority, to name a couple examples. 

The right agent is a synchronistic team mate to your lawyer, personal representative and heirs. This agent can help with a few important steps early on such as, compiling a comprehensive opinion of value, discovering connecting properties owned by the decedent, supplying a copy of the trust deed and meeting with the administrator and other heirs for a free strategy session to listen to the needs of the estate, before advising. 

Cash buyers and investors often look for homes to buy below market value, repair and sell for a profit. This is often known as house flipping. Although this may not yield the highest sale price, it may be a great option for properties that are in high levels of disrepair. A quick sale can seem appealing to family members who need money for emergencies. Keep in mind though, most costs incurred while administering the estate are paid at the end of the probate process. Even if a home sells quickly, heirs likely would not receive any money until the final disbursement is granted by the court. It is important to ask your estate attorney if a quick sale would translate to money in your hands more quickly. If you need immediate cash, there may be other options for you.

Depending on the condition of a property it may be wise to make some improvement before placing the home on the market to get top dollar. Other times the improvements just don't make sense, the people who make that choice also need to evaluate the local market to make sure that it makes sense in their situation. Not every home needs improvement, it is possible to sell a property in probate without making improvements. Contact me to strategize a plan for your situation.

2) Rent the Property

If you do not want to sell the property, you can choose to rent it out. Renting the property can provide you with a steady income stream. However, being a landlord involves a lot of responsibilities, such as keeping the property maintained and finding tenants when there are vacancies. It is important to consider if you are willing to take on these responsibilities before deciding to rent out the inherited home. If there are multiple people inheriting the home, it will become challenging at some point when one person feels like they are doing "all of the work" and want a larger share.

If the property is in good condition, renting may be a great option short term to ensure that it is properly maintained and functioning when it comes time to sell.

Many people have rented properties they inherit and even in simple situations, there are issues people who become landlords through inheritance should know about. One of the most common statements that I hear from an accidental landlords is, "The house is paid off, I'm making tons of money and I'm fine." Even though it looks as though cash is coming in you will want to make sure you run this house like the business it just became.

One story that comes to mind is about a couple who inherited a home from the husband's parents. Bob and Nancy took money that they inherited and did some smart things, mainly they invested in real estate. They decided to purchase a brand new home and rent out their then current home. All is well in their world, the mortgage on the old house is $1,425 a month including property taxes and they are renting the property for $1,800 per month. Twenty six years have passed by and Bob has died, Nancy is still charging the tenant $1,800 per month because, "They're great tenants, I never hear a thing." The market rent for Nancy's investment is now $3,800 per month. That is $2,000 per month that Nancy is missing out on, the depreciation cycle is running out and the tax benefits from being a landlord will shortly end. To make things worse, when you factor for capital expenditures like a new roof or other costly items the $375 per month "profit" shrinks for several years. No Nancy did not save for a new roof, air conditioner or other expense that homes typically have. Nancy does have a tenant who has reliably paid rent for many years, he also drives a more expensive car than she does.

A lesson that many people learn from probate is that they never want anyone that they love to go through that process. While Nancy's story will leave a house to her loved ones when she passes, she is missing some opportunities outside of the $2,000 in rental income per month. She could sell that property at this point and buy multiple properties without paying capital gains through a 1031 exchange. Doing this could earn her more money by having new properties at market rental rates, creating more retirement income for her. She could also be leaving a house to each of her children while she is still alive or even reinvesting in a Delaware Statutory Trust, which would defer the capital gains and provide her a return without dealing with tenants.

3) Move into the Property

Another option available to property heirs is to move into the inherited property. If you are looking for a new home, renting, or selling does not suit your situation; moving into the inherited home may be a practical option. You would need to consider the condition of the property, its location, your personal finances, and the associated expenses before settling on this option.

This has many advantages in California, if your parents had a low property tax base, you could inherit that too and which would make owning a home very affordable, even if you had or wanted to make significant improvements.

Some people decide against this because of memories they may have at home or it just isn't practical for them to move to the property. When there are several heirs, if one heir wanted o move in, they would have to buy out the interest of the others or come to a mutual agreement.

4) Donate the Property

Donating an inherited property can be a great option if you do not wish to keep the home and if there are no other heirs. You can donate the property to a charitable organization, and in return, receive a tax deduction. Before donating the property, it is crucial to ensure that the charity is a reputable organization and that you are aware of the tax implications.

5) Do Nothing

Doing nothing is also an option when you inherit property through probate. If you cannot decide on the next course of action, you can choose to leave the property as it is until you are ready to take action. Doing nothing might not be a wise idea in the long run, as the property may attract expenses such as property taxes, utility bills, and maintenance costs.

Deferred maintenance is a concern as well as unwanted tenants. When squatters choose to move in, evicting them could be a challenging and lengthy process, even though they are not paying rent.

What I Chose to do when I Inherited A House

I lost both of my parents at separate times and I was fairly young in life. My mom had owned the home that I grew up in and it was in a great area. She still owed some money and the mortgage was manageable, even for a young person. Despite this, I did not feel comfortable living in the home with all of the memories of growing up with alcoholic parents. I felt that starting a family there would be uncomfortable for me and I did not want to be in the room where my mom spent her last moments.

During probate, you also learn about all of the debts that the decedent has that need to be settled. Selling the home, settling all of the debt and starting fresh was the option for me. I chose to do this and purchase a home in a less expensive area so that my monthly expenses would be lower. The Realtor® who helped me back then recommended that I buy a duplex so that I could live in one side and rent the other, I do wish that I would have done that years later. At that moment in time, stability was what I wanted the most, so I chose to buy a home for myself and use this blessing to keep my expenses down.

Inheriting a property can be an overwhelming and daunting process, especially when you are grieving the loss of a loved one. It is important to consider all your options before deciding what to do with the inherited property. You can rent it out, move into it, donate it or even do nothing until you are ready to take action. Whatever you decide upon should suit your current and future situation, as this decision will have a lasting impact. My advice is to consult with experts that understand probate, real estate, 1031 exchanges and property taxes before making any decisions. Take the time you need to make the right choice for you and your family.

I hope my story gave you some insight into how I chose to handle my own inheritance, and that you can use this information to help inform your decisions. Please share this with anyone in your life who could find this helpful. For further assistance, contact me at any time! I am a C.A.R. certified Probate and Trust Specialist.

Written by Scott Stollar

760-697-5661

sellitscott@kw.com

www.sellitscott.com

DRE 02136497