New laws for the new year

At a recent economic seminar with the Silicon Valley Association of Realtors (SILVAR), we learned about changes to real estate law beginning January 1st. We’ll have a full update next week, but in the meantime, let’s focus on four new policies…

CHIC (Pearl)

Under current law, you’re allowed to build an ADU (aka Accessory Dwelling Unit) based on your lot size and zoning regulations in your particular city. Starting in the coming year, you’ll be able to sell an ADU with your lender’s consent and other additional restrictions. Even better, the limit for small real estate claims will jump from $10,000 to $12,050!

GEEK (Kevin)

Starting next year, the environmental hazard information you receive from realtors will have new additions about sea level rise, wildfires, and climate change. Also, if a home has been owned for less than 18 months and has a major renovation, the seller not only has to disclose the changes they made and contacts of subcontractors but also the status of all permits.

Drawing the (property) lines

Knowing the precise location of your property lines is crucial for a number of reasons, and there are just as many ways to find them. Let’s look at the how and why.

CHIC (Pearl)

I’ll take the “How?” The first thing you can do is consult your deed, the fundamental legal document that defines your property’s boundaries and dimensions. If the deed does not suffice, you could hire a professional surveyor to conduct an assessment, research property maps at your local assessor's office or land records department to access property maps. It’s also fun to hunt for physical markers like metal stakes, stone walls, fences, or even neighboring structures. And of course, it’s helpful to be on good speaking terms with your neighbors. Open communication can solve any problem.

GEEK (Kevin)

Guess that means I’m here to tell you the “Why?” Bottom line: Property lines establish ownership rights and prevent encroachment and trespassing by your neighbors and other randos. Knowing your lines also comes in handy when you’re planning a renovation or new build. The last thing you want to do is get on your neighbors’ bad side. So play nice. Happy block, happy flock. Oh, and don’t forget your property lines determine your property size and consequently, your property value. At the end of the day, if there’s any doubt, enlist the talents of a professional. The peace of mind is worth the price.

Fighting Fire with Insurance

Insurance companies are shying away from new policies in California and raising rates on existing customers after years of wildfires have devastated their bottom line. How can you keep your current plan or find a new policy that fits your budget?

CHIC (Pearl)

If your insurance company tells you they’re not renewing your policy, don’t panic! You’re entitled to 45 days notice before the policy expires, which gives you time to shop around for a replacement policy or renegotiate with your current provider. If you don’t receive proper notice, don’t hesitate! Call the California Department of Insurance (DOI) at 1-800-927-HELP or go online to insurance.ca.gov and check to see if your policy has a guaranteed renewal provision. And if you think you’re out of options, you’re not. Call the California FAIR Plan at 1-800-339-4099. FAIR warning: This policy can be expensive, and it only covers certain losses, so you may need to buy Differences in Conditions (DIC) insurance too.

GEEK (Kevin)

Who wants to spend all day and night and part of the weekend filling out forms and running themself ragged with research? Okay, some of us love this kind of stuff. But for the rest of us, I recommend getting an insurance agent. The DOI website offers a tool to help you find an agent or broker near you, as well as other resources. Before you decide on an agent, check to see if they work exclusively with one insurance company or have access to multiple carriers so you know you’re getting the best deal. And come prepared with questions for your agent such as: What is covered and what is not? Can I get the full cost to rebuild if disaster strikes? Does it cover demo or debris removal? Is there a coverage limit?

The True Costs of Moving

Selling your first home and purchasing your next one can seem like an insurmountable process when you’re in the thick of it. That’s why it’s important to plan ahead before the madness begins. The first step is understanding the costs beyond the listing price.

CHIC (Pearl)

Before you commit to listing your current home, it’s a good idea to ask your agent for an estimate of all the closing costs involved. A roll call of the usual suspects includes real estate commissions, advertising, legal and professional fees, excise taxes, capital gains taxes, prorated property taxes and HOA fees, and typically surveys, inspections, etc. You’ll need to put a number to all of these items to get a full picture of your options for buying a new home, which comes with its own set of peripheral expenses.

GEEK (Kevin)

So what are some of the costs you need to consider as a buyer? To name just a few: down payment, lending fees, title fees, insurance, inspections (if the seller isn’t paying), professional cleaning, repairs and cosmetic upgrades, utility deposits, and more. We also suggest getting pre-approved for a new home loan before you do anything else, and while you’re at it, make sure to include the costs for any renovations you may want to make. Oh, and did we mention moving expenses? It adds up quick!

Should it stay or should it go?

Remember when you remodeled your kitchen and installed that high-end stove and oven you use every day to cook fabulous meals for your family? If you sell the home, you probably think you can take it with you. Not so fast! The buyer may have other ideas.

CHIC (Pearl)

Generally speaking, anything that’s permanently installed or custom built — like light fixtures, built-in shelving, and major appliances — stays with the home. Decorative items like rugs, artwork, and non-custom curtains are typically fair game if they can be removed without causing damage to the property. But if you find it’s hard to say goodbye to that special something that really pulled your home together, it’s important to avoid misunderstandings and make your plans clear to buyers in advance.

GEEK (Kevin)

Pearl’s absolutely right here. You have to set expectations up front. If you don’t plan on leaving your appliances or other hardware in the house, it’s wise to replace them before you start showing the house or disclose that info before you enter into contract. Even something as simple as those custom cabinet handles you’re planning to take with you could be the one thing that makes a buyer commit. Don’t lead them on. If you’re ever confused about what stays and what goes, ask your agent!