A Loved One Has Passed Away. What Practical Steps Should You Take Next?

When someone close to you passes away, there is obviously a lot to process emotionally. Unfortunately, there can also be a surprisingly long list of things that suddenly need attention. One of the questions I frequently get is: “Where do I even start?” If you are the successor trustee, executor, administrator of the estate, or simply the person trying to help get things organized, you don't necessarily need to tackle everything at once. But there are a few important steps that are worth addressing early, particularly when your loved one owned a home or other real estate. Here are some practical places to start. 

1. Locate the Will, Trust, and Other Important Documents. One of the first practical steps I recommend after a loved one has passed away is trying to locate any documents relating to their final wishes. Look for a Will, Trust, amendments to the Trust, property deeds, insurance policies, bank and investment statements, tax returns, and other financial records. If there is a Trust, determine who has been named as the successor trustee. That is generally the person who assumes responsibility for managing the Trust and its assets after the original trustee passes away. If you're unsure what a document means or what authority you have, this is a good time to speak with an estate or probate attorney. 
2. Obtain Multiple Copies of the Death Certificate. You'll likely need certified copies of the death certificate for a variety of purposes, including dealing with financial institutions, insurance companies, government agencies, and potentially real estate. Rather than requesting a single copy and discovering later that you need several more, it can be helpful to obtain multiple certified copies at the outset. Trying to obtain more certified copies of the death certificate later can be difficult and more expensive than just getting multiple copies up front. And a color copy of a certified copy is not going to be an acceptable substitute. 
3. Make Sure the Home Is Insured. If your loved one owned real estate, this is one item I would not put off. I cannot emphasize enough how critically important this is. Confirm that there is an active homeowners insurance policy and determine what the insurance company requires now that the owner has passed away or the property may be vacant. Why is this so important? A house may be one of the estate's most valuable assets. If a pipe breaks, someone breaks into the property, a fire occurs, or there is another major loss while the property is uninsured, the financial consequences to the estate could be enormous. And unfortunately, you generally can't buy insurance retroactively after something has already happened. 
4. Secure and Check on the Property. If no one is living in the home, make sure someone is regularly checking on it. Collect keys, secure doors and windows, retrieve mail, deal with landscaping, and pay attention to anything that could make the property appear obviously vacant. You may also need to address utilities, alarm systems, vehicles, pets, and other practical matters. Chat with neighbors and ensure they know how to reach you if something looks amiss at the property. 
5. Identify the Assets and the Bills. Begin putting together a list of what your loved one owned. That might include real estate, bank accounts, investments, vehicles, business interests, personal property, and other assets. At the same time, start identifying recurring expenses and obligations such as the mortgage, property taxes, insurance, utilities, HOA dues, credit cards, and other bills. Often, these bills need to be continued to be paid. You may discover that some assets were held in the Trust while others were not. If that happens, consult an attorney before assuming how those assets should be handled. Personal property may need to be inventoried, distributed among beneficiaries, sold, donated, or otherwise handled according to the estate plan and advice from the appropriate professionals...so while you may be tempted to start giving things away, don't do that without consulting an attorney. 
6. Get a Date-of-Death Appraisal for Real Estate. This is one of the steps people sometimes overlook. If your loved one owned a home, rental property, or other real estate, talk with your CPA and attorney about obtaining a date-of-death appraisal. This is literally a value of the property at the date of the owner's death, which could be months or years before the property actually gets sold. The property's value as of the date the owner passed away can be important for tax and accounting purposes. This is different than “What could the house sell for today?” Even if you don't intend to sell the property immediately, establishing its value at the appropriate date will be important later. 
7. Talk With the Right Professionals. You don't have to figure all of this out by yourself. Depending on the estate, you may need an estate or probate attorney, CPA, financial advisor, appraiser, and real estate professional experienced with probate and trust sales. Each has a different role. As a real estate broker, for example, I can help evaluate the real estate, discuss its current market value and condition, determine what preparation may make sense before selling, and coordinate many of the practical details involved in getting a property ready for market. But I don't provide legal or tax advice, which is why having the right team can be so important. 
8. Decide What Needs to Happen With the Home. Eventually, there is usually a decision to make: Will the property be kept, transferred to a beneficiary, or sold? I've worked with many estate properties over the years, and the right preparation can vary tremendously. One home may benefit from paint, flooring, landscaping, and staging. Another may make more sense to sell largely in its current condition. Before spending significant estate funds, it can be helpful to have an experienced real estate professional look at the property and help determine which improvements are likely to matter to buyers, and which probably aren't worth the expense. There may also be a lot of logistical work involved: removing personal belongings, hauling away unwanted items, coordinating an estate sale, cleaning, landscaping, inspections, repairs, contractors, staging, and ultimately preparing the home for sale. A good real estate agent experienced with estates should be able to help coordinate much of that process. 
9. Establish the Appropriate Estate or Trust Bank Account. Depending on how the estate is structured, you may need to obtain a taxpayer identification number and establish a separate bank account for the Trust or estate. That account may be used to pay expenses, receive income, and ultimately receive proceeds from the sale of estate assets such as real estate. Your attorney and CPA can advise you on exactly what is required for your situation. 
10. Keep Good Records. Finally, document everything. Keep records of expenses, repairs, professional fees, distributions, property-related costs, deposits, and other transactions involving the estate. When you're juggling dozens of responsibilities, it can be tempting to tell yourself, “I'll organize all of this later.” Later has a way of becoming much more complicated. Good recordkeeping from the beginning can make life much easier for you, your attorney, your CPA, and ultimately the beneficiaries. 

Settling someone's affairs can feel overwhelming because there may be legal, financial, emotional, and practical decisions happening simultaneously. Start with the things that are most urgent: find the estate documents, identify who has authority to act, obtain death certificates, protect and insure the real estate, and begin assembling the appropriate professional team. Then you can work through the remaining pieces one at a time. During my 20+ years as a Sacramento-area Realtor, I've helped numerous clients sell homes and other real estate through Trusts and probate estates. I also served as the personal representative and administrator of my own mother's estate, so I've experienced this process from the other side as well. 

If you've inherited property in Greater Sacramento, or you're a successor trustee, executor, or probate administrator trying to figure out what to do with a home, I'm happy to help you understand the real estate side of the process and connect you with attorneys, CPAs, appraisers, estate liquidators, contractors, junk-hauling services, landscapers, inspectors, stagers, and other professionals when needed. 

Important: This article is intended to provide general information about some of the practical steps that may arise after a loved one passes away. It is not legal, tax, or financial advice. Every estate is different, so consult qualified legal and tax professionals regarding your particular circumstances.

New Listing - 9452 North Kiefer Blvd, Sacramento, CA 95826

Don't let the street name fool you: this home is on North Kiefer Blvd, a residential street just off Mayhew Road, not busy Kiefer Blvd! Located on a corner lot in Rosemont's Jordan Park community, this special 3 bedroom, 2 bathroom, 1,408sf home has had just one owner and has been lovingly cared for over the years. Now it is ready for a new owner to make it their own and begin its next chapter. Step inside and you will love the comfortable, open floor plan with a spacious living room and fireplace, plus an open kitchen with granite countertops, stainless steel appliances, a center island, and a pantry closet. Primary suite is generously sized with an inviting ensuite bathroom featuring double sinks, large stall shower, and walk-in closet. Two additional bedrooms offer lots of closet space, along with a hallway bath with a tub/shower combo and a dedicated laundry room inside the home. Out back, the private patio and lawn area offer plenty of room to garden, play, entertain, or simply relax at the end of the day. New carpet and a pest clearance mean some of the work has already been done for you! And you will love the location, tucked into an established residential neighborhood while still close to parks, shopping, restaurants, the American River, and everyday amenities, with easy access to Highway 50 for getting Downtown or just about anywhere else around Sacramento. This one is ready for someone new to fill it with memories of their own. Don't wait! Probate estate. Court confirmation is not required. Offered at $485,000. For more photos, a 3D virtual tour, and a floorplan visit 9452 North Kiefer Blvd, Sacramento, CA 95826.

Is selling ‘as-is’ to an off-market investor really my best option? NO.

I closed a transaction last week where I helped my clients net an additional $80,000. Engaging a Realtor can bring a ton of value in situations like this. 

I was connected to the administrator of a probate estate by his attorney, who found me while searching online for a Sacramento probate specialist. 

The situation with this property was challenging and the seller was overwhelmed. The home had been owned by a woman who struggled with hoarding. After her passing, the property sat vacant for over a year. During that time, it was broken into, and suffered significant damage from a plumbing leak. Utilities were shut off. The interior and exterior were filled with excessive debris. Landscaping was overgrown. It was overwhelming. 

Enter the off-market investors. Several approached the seller, offering quick, “as-is” solutions. The highest offer was around $215,000. They positioned themselves as the easy path. No cleanup. No repairs. No Realtors to pay. Just sign and be done. 

Friends: these investors are trying to buy at a steep discount…and they know many sellers in these situations feel stressed, uncertain, and just want relief. After paying off the mortgage and liens, the estate would have netted very little money. Barely enough to cover the cost of the probate itself, with a trivial amount left for the heirs of the estate. The seller was paralyzed by what to do next and tempted to take it. Thankfully I got involved and we went to work. 

The estate had no funds to prepare the property for sale, so I leveraged my network of tradespeople to make it happen with no upfront cost and the expenses billed to escrow: 

• Coordinated a full property trash-out 
• Secured the home and addressed access concerns, including boarding up gaps in the fence
• Arranged exterior vegetation cleanup 
• Got an up-front pest inspection to provide with disclosures 

Then we took professional photos and brought the home to market at $295,000. 

The response was incredible! More than 20 offers. Final sales price that closed last week: $320,000. 

That’s roughly $80,000 more net to the estate after mortgage loan and lien payoffs, and the other costs of preparation and sale than the highest off-market investor offer and a dramatically better outcome for the estate. All because they trusted me to smooth out the rough edges of the situation and take their overwhelm away. This is the difference between taking the “easy” offer versus having the right representation working on your behalf who knows how to get things done. 

Having an experienced Realtor on your side DOES NOT add complexity! We create opportunity, connect the right people to help with strategic repairs or improvements, we protect equity, and make sure sellers fully understand their options. 

Let me tell you… $80,000 makes a tremendous difference in someone’s life. I’m so happy for this family and I’m also relieved to bring a positive conclusion for them to this experience. So when people ask me if selling ‘as-is’ to an off-market investor really my best option? The answer is NO.

Taxes When Selling an Inherited House in Greater Sacramento, California...

Inheriting a home can come with a lot of emotions and a lot of questions, especially as you try to piece together the puzzle of someone's financial affairs. One of the most common questions I tend to get asked when people inherit property in greater Sacramento is: “What are the tax implications if we sell the house?” or "Will we owe capital gains tax on the sale of this home?" The good news is that, in many cases, selling an inherited home in California may result in less tax than people expect because of something called a stepped-up basis. 

When someone inherits a home or become the administrator of an estate, the tax basis of the property typically adjusts to the fair market value at the date of the original owner’s death. This means that if the home was purchased decades ago for a much lower price, the heir does not inherit that original purchase price for tax purposes. Instead, the basis is “stepped up” to the value at the time of inheritance. (Side note: you may need a "date of death appraisal") 

For example, suppose a Carmichael home that was originally purchased in the 1970s for $80,000 but was worth $650,000 when the owner passed away. If the heirs later sell the home for around $650,000, there may be little to no capital gains tax owed, because the sale price is close to the stepped-up value. 

Of course, every situation is different. If significant time passes between inheriting the property and selling it and the home increases in value during that time, then capital gains could apply to the increase that occurs after inheritance. In addition, heirs should also consider property tax issues, especially if the property is kept as a rental or transferred between family members under California’s property tax rules.

Another important factor is how the property was held. Many Sacramento homes pass through living trusts, which often allows families to sell the property without going through probate. Others may require a probate process before the home can be sold. The tax implications can vary slightly depending on the structure of the estate and how the sale is handled. 

Because tax rules can be complex, I always advise you speak with a CPA or other qualified tax professional before selling an inherited home. They can review the estate details, establish the correct stepped-up basis, and help ensure everything is reported properly. 

If you’ve inherited a home and and are trying to decide what to do next, you’re not alone. Many families find themselves balancing legal, financial, and emotional considerations all at once. Having a clear understanding of the tax side of the transaction is one of the first steps toward making the right decision for your situation. I welcome your call to talk through different scenarios to the extent I can be helpful or connect you with an attorney or CPA to assist you. And if you would like some guidance relative to selling via a trust estate or probate estate, here is a link to some common Q&A's I encounter from clients and tips for some practical steps.

Handling a Probate or Trust Estate? Why the homeowners insurance policy is one of the first things you should find...

In the last month, I’ve had the same conversation twice with two different people, handling two different probate estates under similar circumstances. 

Both sellers had been named the administrator of a loved one’s Sacramento area probate estate. In both cases, the death of their loved one (the property owner) had occurred more than a year ago and they had delayed filing for probate. And when I asked questions about the property and status of the homeowners insurance policy, both of them admitted that they did not know if there was a homeowners insurance policy for the property. And in each of these cases, the policy coverage had lapsed.

Yikes! That’s a big hairy detail that just CAN NOT be overlooked. 

When someone passes away, often grief, family dynamics, and sheer overwhelm take over. Filing for probate is often not top of mind. And it’s emotionally very daunting to sift through your loved one’s finances, documents, and personal property, but I can’t emphasize enough how important it is…and checking for a homeowners insurance policy on any real estate that person owned is one of the most critical boxes to check. 

Here’s the reality: if a property is uninsured and something happens like a broken pipe, a break-in, vandalism, a fire, etc…the estate could suffer a massive and catastrophic financial loss. A house or other real property is probably going to be the highest-value financial asset of a probate estate. And if it’s uninsured, and there’s a loss, there is no do-over. There is no retroactive insurance coverage if policy coverage has lapsed. 

When someone passes away, the first thing I suggest is look for any and all documentation for existing mortgages and insurance. Contact the insurance agent immediately. You should ask if an existing homeowners policy automatically remains valid after the owner’s death. Some policies may require the insurer to be notified of the death or a change in occupancy status. Vacant homes often need special endorsements or entirely different policies. If the insurance company isn’t informed, a claim could be denied when you need it most. 

And if the policy renewal notice comes and goes without being paid, that will likely result in a lapse in coverage. Don’t let that happen. 

This is why early in these conversations I try to slow things down and ask very direct questions: Is there an active insurance policy? Who is the carrier? When was the last premium paid? Has the insurance company been notified of the death?

If no one knows the answers, that’s the signal to stop and investigate as soon as possible. Please make one of your first priorities protecting the estate's assets. Making sure there is an active, appropriate homeowners insurance policy in place is one of the simplest steps and one of the most important. 

New Listing - 6604 Willowleaf Drive, Citrus Heights, CA 95621

Enviable, remodeled 3 bedroom, 2 bathroom, approximately 1,273sf home with built-in swimming pool in Citrus Heights! Inviting front courtyard and charming curb appeal. You will love the light and bright open floorplan. Enter into the foyer. To your left find a spacious formal living room with vaulted ceilings and a lovely picture window overlooking the front yard. To the right of the foyer, find a cute dining area and the remodeled kitchen, offering white cabinets, quartz surfaces, tile backsplash, stainless appliances, and a large breakfast counter. The kitchen overlooks a family room with a cozy fireplace and sliding door to the backyard. Vinyl plank floors throughout the living spaces. Primary suite has a large remodeled ensuite bathroom with dual sinks, a closet, and stall shower. Remodeled hallway bathroom with a tub/shower combo, and two more bedrooms with ample closet space. The backyard is an outdoor oasis with a covered patio and built-in swimming pool with lots of sunny space to sunbathe, or to garden or play! Large side-yard and extra-wide driveway offers RV parking for your toys. Newer roof. Dual pane windows. 2-car attached garage. All this in close proximity to schools, parks, shopping, restaurants, and more. Don't wait! Offered at $509,000. Probate estate, and seller has full authority to sell. For more photos, a 3D virtual tour, and information, please visit 6604 Willowleaf Drive, Citrus Heights, CA 95621.

Erin, where are all the homes that should be for sale in Sacramento?

I was quoted in a Sacramento Bee article last week, that among other things discussed the imbalance of supply of homes for sale and demand to purchase homes. I was quoted in the article saying "At some point there is going to be this backlog of sellers who have forgone selling. We are going to see those people put their houses on the market."

BUT WHEN?

That is a fabulous question. I thought I'd take a minute to describe some of the things I have been hearing from my clients, as well as some of the bottlenecks and challenges sellers have in this environment. At some point the trickle of new listings will be a little more steady, but we have some things to work through in our Sacramento real estate market.

(1) Some sellers still do not feel safe having buyers in their homes. Some homeowners who want to sell have a higher or lower risk tolerance than others. While the COVID19 vaccine has recently become more widely available, it will still be several months before the majority of the population in our region has been fully vaccinated. And cautious sellers who fear catching COVID19 have been staying put. I have conversations with would-be sellers in this category all the time. It does seem like there is a light at the end of the tunnel, but every would-be seller will have a different comfort-level here.

(2) The court systems have been backed up. You may not realize how many transactions are dependent on court orders or other legal processes. For example the probate court system, which governs who will manage the estate of a deceased person, was closed for a few months. There is a tremendous case backlog, and those who will ultimately decide if and when to sell a home that was owned by someone who died are not able to manage the estate affairs without a court order. I have one client who filed for probate back in the summer 2020 who was just recently finally granted authority to handle his father's estate. Courts also often weigh in on the sale of homes in divorce/family law and bankruptcy cases too.

(3) There is an eviction moratorium and various "just cause" ordinances in place preventing landlords from displacing tenants. While I feel for the plight of tenants who face a COVID19-related hardship, there are property owners who would love to sell if they were able to end the tenancy of their current renters. It is often challenging to sell a home with tenants for a variety of reasons. I was contacted by a single-family homeowner last year who had a non-paying tenant, and ultimately they were advised by their attorney that they could not evict the tenants and should not try to sell until the tenants were either paying rent or move out. 

(4) There is a moratorium on foreclosures. While we have been in an increasing price market for a while in Sacramento and distressed property listings (short sales and foreclosures) account for a very small fraction of listings, these listings are not coming on the market as quickly. (4b) Homeowners who are unemployed or under-employed are propped up by federal stimulus, additional pandemic unemployment insurance income, and loan forbearance. At some point, some of these homeowners will sell when the federal assistance expires.

(5) It can be a little more difficult to prepare a home for sale. I have spoken to many contractors are reluctant to work on occupied homes. For those that do, their schedules tend to be booked out for weeks or months. Some organizations have stopped taking certain donated items, so clearing out the house can take longer. Many building materials, supplies, and appliances have become scarce and can be difficult or expensive to obtain. (I personally am still waiting for delivery of a new cooktop I ordered in early March. I will be lucky to have it by the end of May according to the supplier. No it is not stuck on the Ever Given!)

(6) Where will the seller move once they sell? In this low inventory environment for both purchasing AND renting homes, sellers often express concern that if they sell their home they may not be able to purchase or rent something else. Not every seller has an easy move-out plan. I easily have 8 would-be sellers who would list tomorrow if they were confident in finding a replacement property. There are still plenty of ways to work through this, but some of the options can be a little stressful for risk-averse sellers/buyers.

So hopefully this is informative. And as I was quoted in the Sacramento Bee article -- at some point sellers who have not listed their homes WILL sell. I have a queue of many people who very much want to sell. And at some point we will see those homes come to market. There are ways to work within many of these challenges with a little creativity and determination. I am still listing plenty of homes...

The good news is I am seeing a little more inventory as we inch more into the spring. This is the time of year when we normally see more listing inventory...and I can only hope it takes some of the upward pressure off the market for home buyers, as the current trajectory of the market is not sustainable for the long term. but we all know there is less that is the normal we are all used to. 

Sacramento Home Seller B-I-N-G-O!

After one particularly stressful transaction recently that was laced with several pandemic-induced challenges I jokingly asked my seller client "So was 'getting exposed to COVID right before closing' on your BINGO card"? 

And we both laughed.

And then it hit me -- gosh maybe adding some levity during an otherwise stressful time would be a good idea. So, starting now I will be giving my sellers a BINGO card to complete during our transaction. I used an online program that randomizes the squares so each client will have a unique card for their own unique transaction. Any client who achieves a BINGO will get a $100 gift card to a restaurant of their choosing at closing.

The market is a little nutty and things can get chaotic, so let's have some fun too. 

Earned a Certified Probate Real Estate Specialist (CPRES) designation

Not that I have loads of spare time, but as we are spending more time at home during the COVID19 pandemic, I have dedicated more time in 2020 to continuing education. While I have closed many probate estate transactions and already consider that to be an area of expertise, I recently earned a Certified Probate Real Estate Specialist (CPRES) designation. This additional education will be an asset as I assist estate personal representatives throughout Sacramento to sell properties that are in probate estates. 

Probate is a legal process through which the applicable county court verifies that a deceased person's assets are distributed according to the deceased's Will or via applicable law. Most people filing for probate need to connect with an attorney who specializes in estate law - I know several great ones if you need a referral.

It is an emotional time for any family, and a confusing path to navigate. Having an expert to help sell the real estate assets of a probate estate is really a key. 

This is a path I have traveled both personally and professionally. Not only have I sold many homes via probate processes, but I have also been the personal representative and administrator of my mom's probate estate when she passed away unexpectedly. 

I know first hand what the process is like from the inside out, and I try to smooth out the rough edges for my clients. 

Quoted in today's Sacramento Bee in an article about the real estate market...

I was quoted in today's Sacramento Bee in an article by Tony Bizjak about the Sacramento real estate market. The headline of the article is a little funny to me -- as prices increase, so (generally) does home equity. Clearly this is great for homeowners and sellers. Higher home prices - not so great for buyers.

Things are complicated.

As I have mentioned before, we have an imbalance of supply and demand in the market right now. This stems from fewer than normal sellers listing their homes, and a high number of buyers who are highly motivated to purchase homes as we are all spending so much more time at home now.

Sellers who would otherwise list their homes are faced with several challenges that are unique to our COVID19 environment:

• Some contractors are reluctant to do repairs or remodeling in occupied homes. This makes things a little more difficult to prepare homes for sale.
• The courts were closed for a prolonged period of time. Courts are now open but caseloads are backed up. Petitioners for probate have had a much longer wait to receive their "orders and letters" needed to appoint a personal representative. Personal representatives, who have authority to act on the estate's behalf, can't prepare or list homes for sale until their authority is ratified by the court. 
• Estate liquidators have some challenges selling the contents from the homes of those who have died. The traditional estate sale is just not really feasible right now due to social distancing. This affects homes in trusts and in the probate process, and these properties now take longer to clear out.
• Ever try to clear out a home yourself where someone has passed away? It it emotionally draining and physically difficult! It takes a long time under normal circumstances, and longer when people are reluctant to come to a garage sale.
• At a time when everyone is supposed to be social distancing, many sellers are not excited to have dozens of people in and out of their homes for showings! Not only can it be overwhelming to sanitize between showings, but many sellers do not want to take the risk of exposure COVID19. While buyers and agents must provide a health declaration swearing they do not have symptoms of COVID19, there may be asymptomatic carriers of the virus who access the property. 
• Spending so much time at home, where can you go during showings? It is best to leave during showings, and many local businesses are closed. Travel is not as easy as it used to be, so it may not be super convenient to pack up the kids and pets to leave.
• The kids are going back to school! Seriously, now that so many people are working from home and kids doing distance-learning during the day, who has time to sell the house? And how much more disruptive will a move be?
• If you have a home to sell in order to purchase your next home, with such low inventory, what will you be able to buy?
• Some sellers want to wait things out and get past the COVID19 situation to a time where things are more predictable and certain.

These are common things I hear from people thinking about selling. And for some would-be sellers, sometimes these challenges are insurmountable. I thankfully have been able to work with and around most of these scenarios with sellers. I have numerous inspectors and tradespeople I can refer who will work through these conditions. I have a really creative estate liquidator who has pivoted to virtual estate sales and some creative online sales techniques. There are viable alternatives in many cases. But things are slower moving for sure.

With low inventory and LOTS of interested buyers including more than usual bay area transplants, it can be a good time to put your Sacramento home on the market if you have a well-crafted plan and circumstances allow.

New Listing - 5630 35th Avenue, Sacramento, CA 95824

Adorable 2 bedroom, 1 bathroom, 1,213sf Fruitridge Manor home is the perfect blank canvas for your personal touches, and is ready for a new owner. Lovingly maintained by the same family for many years, you will appreciate the wood floors, large kitchen with double oven, separate living and family rooms, fireplace with gas starter, and spacious bedrooms. Backyard offers both sunny and shady spaces to garden and play and a shed for additional storage. Close proximity to shopping, public transit, CSUS, and more. Probate sale. Offered at $249,900. Don't wait! For more photos and information please visit 5630 35th Avenue, Sacramento, CA 95824. MLS#18047865

Don't wait to get a "Date of Death" Appraisal...

I sell many homes where the original owner passed away, and the administrator of a probate estate or successor trustee of a trust is the person selling the home. As a rule, I do not give tax or legal advice to my clients since I am not a CPA and not an attorney...but I see this situation enough that I feel the need to make a suggestion to sellers of homes after the death of the owner - talk to a CPA immediately, and obtain A DATE OF DEATH APPRAISAL.

A Date of Death Appraisal is a formal valuation of the home by a state-licensed real estate appraiser upon the date of death of the owner.

You should look into this sooner than later. The estate will likely need one for tax purposes, whether you decide to sell the home immediately or wait.

For too many people having this done is an afterthought. Be proactive. Recently I sold a home for a successor trustee where the owner died over 8 years ago. The longer you wait to have a this done, the more expensive the appraisal will be. The appraisers I refer to my clients typically charge $400-$500 for an appraisal, however if they have to dig for comparable sales information that is not readily available or current, the cost will definitely increase. Additionally, if you get this done sooner than later, while you still have access to the property, the appraiser can actually see the home. If you wait a long time...and maybe even wait until after the property is sold (very common), then the appraiser not only has to dig up old information but also won't have the benefit of being able to see the home in person.

My suggestion - talk to a CPA and don't delay getting this done. If you need a referral to a great appraiser, reach out to me and I can connect you.

New listing - 3729 Erlewine Circle, Sacramento, CA 95819

River Park home is ready for a new owner - this 3 bedroom, 2 bathroom, 1,307sf fixer is the perfect blank canvas for your personal touches and renovation. You will love the spacious layout, large living room with gas fireplace, formal dining room, central heat and air, HUGE .22ac lot on a cul-de-sac with a built-in pool, lots of sunny space to garden or play. Close proximity to the river parkway, baseball fields, parks, Caleb Greenwood Elementary, Sac State, and all East Sacramento has to offer. Don't wait! Probate sale. Offered at $325,000. For more photos and additional detail please visit 3729 Erlewine Circle, Sacramento, CA 95819. MLS#18025100

2017 - my real estate transaction statistics and how I compare to Sacramento market averages...

I closed what will likely be my final real estate transaction of 2017 yesterday - not that I have any shortage of work to do between now and the end of the year! 2018 is shaping up to be extremely busy as well.

I like to track the statistics of my transactions, and toward the year end I always reflect on what I have done, how I compare to the rest of the agents in the market, and how I can improve. So for the sake of transparency, I thought I would post some statistics and my thoughts on the coming year. Keep in mind, I am not a part of a "team" and this is all my own production. This year, all of my transactions are in Metrolist MLS, so this information is easily verifiable...in 2017:

-I closed 38 transactions and closed $13,448,865 in volume. My lowest transaction was $95,000, and my highest transaction was $815,500. The average was $353,917 and the median was $334,500.
-65.8% of my transactions were past/repeat clients (which is amazing to me!) 34.2% were new clients.
-81.6% of my transactions were residential properties (condos, single family homes), 15.8% were multi-family properties (duplexes, triplexes, fourplexes), and 2.6% were other (commercial, land).
-57.9% of my transactions I represented the seller, while 42.1% of my transactions I represented the buyer.
-My typical residential listing sold for an average of 101.64% of its original listing price (meaning, 1.64% over the original listing price) in just 11.55 cumulative days on the market. The distinction of original and cumulative is important...original means even after a price reduction from the initial listing price, and cumulative means even if a property is re-listed or comes back on the market.
-My typical multi-family listing sold for an average of 101.4% of its original listing price (1.4% over the listing price) in just 6 cumulative days on the market.
-My typical listing had an average of 3.8 buyer offers on it!

Comparing these statistics to the overall Sacramento real estate market averages, I had a stellar year.

For one, to qualify for the Sacramento Association of Realtors Masters Club, a realtor must close $5M in transaction volume and a minimum of 8 closed transactions. Clearly I blew those numbers out of the water. I would guess that with 38 closed transactions and nearly $13.5M in volume I am likely in the top 1-2% of all agents in greater Sacramento.

My clients are all over the spectrum from first-time buyers, move-up buyers (those who sell their home and then purchase another home), investors, sellers of property they inherited via a trust or probate, sellers retiring and moving out of the area, sellers divorcing, etc. My average and median transactions at $334,500 and $353,917 are right in line with the average and median home prices in the Sacramento region according to Trendgraphix data. My high and low range indicates I work with a broad economic client spectrum as well, from those working with downpayment assistance to those among top-income earners in the region. Unlike past years, I did not close any short sale listings in 2017 (though I do have a short sale listing that is pending/approved, and scheduled close in 2018). Distressed properties are a very small part of the marketplace right now though just a few years ago they were the bulk of my transactions.

My listing statistics are also excellent...according to Trendgraphix for Sacramento County, the lowest average days on market for a single family listing in the last 14 months was 19 days on market, versus my listings at 11.55 cumulative days on market. My original listing price versus final selling price ratio is also outstanding as my listings sell for 101.64% above original listing price on average, versus the highest month of the last 14 months at 100%. I think these numbers are indicative of my strategic approach to listing property -- complete with pre-listing inspections, staging, repairs, professional photography, 3D virtual tours, and multi-faceted marketing.

Of course I hope to improve these numbers next year in 2018...so we shall see how that shapes up! If you think we would be a good fit to work together toward your next property sale or purchase, I welcome your contact via phone or email.

Heirs: please do not throw out home maintenance records if you find them...

I listed a Sacramento home recently where the owner passed away earlier this year. The person selling the home is the "successor trustee" of the owner's Living Trust -- the niece of the owner. She came out from Texas to go through the house, clean it out and get it ready for sale.

I visited the house the other day as they were packing items up to move and getting ready for a huge garage sale, and the niece handed me a box. Looking inside, I discovered the owner retained records for EVERYTHING. And by everything, I mean everything. Every appliance she purchased, service records for maintenance, extended warranty information and more dating back nearly 40 years.

We were able to purge a little of it -- for example the central heat and air system she installed in the 1980s was replaced just a few years ago. And the coffee maker she bought in 1996 was being sold in a garage sale and not coming with the house.

Homes that are sold by the successor trustees of a living trust where the owner has passed away or become incapacitated are exempt from many of the typical disclosures given to buyers during a home sale. Often, successor trustees have never occupied the home and don't know pertinent information about the home. If you are ever in the position to have to sell the home of a deceased person via a probate estate or a living trust PLEASE do not throw out these records if you find them while sorting out the affairs of the estate. This sort of cache of information is absolutely invaluable to the new owner.

New Listing - 3224 Normington Drive, Sacramento, CA 95833

This cute 3 bedroom, 1 bath, 1,220sf fixer home near the South Natomas area has tons of potential and is the perfect blank canvas for your personal touches. you will love the cute front patio, ample living areas, wood flooring, inside laundry, big backyard, newer fencing, possible RV access with paved side driveway. Great location near shopping, freeways, and public transportation. Don't wait! Offered at $189,900. Probate sale, not subject to court confirmation. For more photos and detail, please visit 3224 Normington Drive, Sacramento, CA 95833.

California Transfer On Death (TOD) Deed -- avoids probate, less expensive, faster...

Thanks to California Assembly Bill 139 that passed in 2015, as of January 1, 2016 a real property owner has a new way to avoid the Probate process. AB 139 created the "Transfer On Death" Deed. Why is this significant? Let me explain...

Generally, if a property owner dies and does not have a Living Trust, any real estate owned must go through the Probate process in order to be sold. This applies even if the property owner has a Will...so don't be fooled into thinking that property named in a Will avoids the Probate process. IT DOES NOT. The Will only serves to specify who the deceased person wants to pass the property along to. Probate is a court process to actually transfer ownership of the property. Probate is expensive, extremely time consuming, and can be highly emotionally charged...trust me, I have helped several clients through the process in order to sell homes of deceased loved ones, and it is not a process I would wish on anyone.

So I am frequently asked -- how can we avoid Probate? Up until this last year, my answer was -- talk to an attorney, form a Living Trust, and do not forget to deed your real estate into the trust. Creating a Living Trust sets up a mechanism that transfers responsibility for real estate to a Successor Trustee, which makes selling a home after death pretty simple. There are two downsides to setting up a Trust though. The first is that forming a Trust is pretty expensive -- an attorney will charge $2,500 - $10,000 depending on how complicated your estate is. The second is that Trusts take time to plan properly -- so it could take a few weeks to a few months to form your Trust and deed your real property into it.

With the passage of AB 139, there is now an inexpensive and faster option -- deed your property into a "Transfer On Death" Deed -- aka, a TOD Deed.

One of my past clients called me in September when her mom was diagnosed with an aggressive form of cancer.  Her mom had just weeks to live, had no trust and no will, and owned a home in Carmichael. I immediately thought of the TOD Deed. With a TOD Deed, the owner remains the owner while that person is alive, and it names a beneficiary that the property is transferred to upon the death of the owner. She called an attorney who prepared a TOD Deed for her mom, had it signed and  notarized and recorded with Sacramento County. She passed away just days later.

The entire process to prepare, execute, and record a TOD Deed was just days and a few hundred dollars. Once her mom's death certificate was available, an "Affidavit Death of Transferor" had to be prepared and filed with Sacramento County. So within a short period of time, and for a few hundred dollars, daughter had full authority to sell the property. No Probate. No excessive costs. Way less stress.

I always suggest getting tax and legal advice before doing something like this, but what I can tell you is that this is a streamlined way to take the expense, time, and stress out of what is already an emotional time. And as a side note, an owner can file a TOD Deed, make changes to the beneficiary during his/her lifetime, sell the property, or deed the property into a trust later. No need to wait until a fatal illness to get one done. In fact I would recommend being proactive.

Disclosing death on a property....

It seems a few times per year, I list property where someone has passed away at the home. Death at a property is one of those things that will not bother some people, and for others it will be a deal breaker when deciding whether to purchase a home. But how should it be disclosed? Where should it be disclosed? And for how long is it relevant to disclose?

In late 2016, legislation passed clarifying disclosure obligations in California for death on a property.

The provisions in AB73 are pretty simple: any death in or on a property MUST be disclosed if it occurred within 3 years from the date of the purchase contract. After 3 years has passed, the death, and the manner in which someone passed away, will no longer legally be considered "material facts" and disclosure is not required. Additionally, this legislation clarifies that no disclosure is required if an occupant who lived at the property had HIV, or died from HIV-related complications.

As I assist sellers to fill out their property disclosures, when we get to this question in the Seller Property Questionnaire, usually the answer is no and the "no" box is checked accordingly. However when the answer is yes, just checking the "yes" box that there has been a death on the property within the last 3 years, is usually not enough. I would recommend noting, if known, the location within the house where the death occurred and circumstances. Something like "Previous occupant passed away by natural causes in the master bedroom" is appropriate. It's also something I put in the agent comments section in MLS, so that it can be known to buyers before they view a property. If buyers have additional questions about the death, I generally suggest they ask in writing so that the seller can respond appropriately.

I also ask my clients to think about other notable deaths that may have occurred at the property. I recently had a seller who buried a 60-pound dog in the backyard, and after some discussion we agreed was a good idea to disclose that burial. What new owner wants to start landscaping and unexpectedly find buried bones in the backyard? Providing appropriate detail may save everyone from surprises later.

Is your house a 1970's throwback? A small investment in neutralizing the decor may payoff for home sellers...

Often times I list property for folks who have lived in their homes for decades, or for a family who inherited property from long-term owners. Homes that have been well loved and well lived-in are often in good shape structurally, however cosmetically they tend to be a little dated. Sometimes it makes sense for the sellers to invest a little money in neutralizing some of these things before selling a home.

It doesn't always make sense to make improvements to a home before putting it on the market though. Depending on numerous variables, such as the target market buyer for a property, the overall condition of the home, the location, and just how pervasive the cosmetic dating is will play into what, if anything, it makes sense to improve.

These are options that I review with the sellers so that they get the most bang for the buck -- flooring and paint tend to get a really good return on the investment, and generally spending a few thousand dollars yields a much higher return in property value and a higher selling price. The home will photograph better, and have a more wide appeal to the target market with neutral colors, and will ultimately be more turn-key for the new owner.

After strategizing different ideas with the sellers of this particular property shown in the photos, they decided it was worth the investment to scrape the wallpaper, paint the walls, replace the shag carpet, and replace the vinyl flooring.

Not every seller has the resources to do improvements to a home before selling it, and not all improvements will have a positive return, but generally neutralizing a property with very distinct outdated décor will payoff.

I have a full slate of contractors and suppliers who can assist as well. Often times folks who are selling homes under these circumstances live or have relocated outside of the Sacramento area, and I have lots of experience helping to get bids and facilitate this work from afar.