Technorati Tags: Ca Real Estate License

Technorati Tags: Ca Real Estate License

Technorati Tags: Ca Real Estate License

Technorati Tags: Ca Real Estate License

1. The Probate Process. Probate is the process by which the Probate
Court handles a deceased person’s estate if there is no _trust_; it
applies if there is a will only, or if there is no will. (One of the
primary reasons for having a trust is to distribute the estate without
having to go through probate.) Essentially a probate petition is filed
with the Court, creditors are notified, the personal representative
lists all of the estates assets and liabilities, a probate referee
appraises the assets, any disputes relating to the estate are settled, a
final accounting is made, the creditors are paid and then the remainder
is paid to the beneficiaries.

a. Time. Probate often takes 8 to 10 months, although it can take even
longer. During that time, if the family needs money from the estate, a
motion has to be brought and a court order obtained.

b. Terminology. The person handling the estate is called the “executor”
if there is a will or the “administrator” if there is no will or no
executor is named in the will. “Personal representative” or “estate
representative” (or just “representative”) refers to either an executor
or an administrator.

2. Exceptions to Probate.

a. Trusts. No probate is required if the estate is primarily owned by a
trust. Note, though, that in this case if the trust owns real estate one
or more filings often need to be made with the county recorders office
to remove the deceased’s name from the title. If more than $100,000 in
gross assets (with certain exceptions, discussed below) are outside the
trust, though, then probate may still be needed.

b. Where All Property Goes to the Spouse. If there is no trust covering
the property, then it may be possible to file only a spousal petition
(versus going through a full-blown probate) if the surviving spouse has
100% unqualified ownership of the real property (meaning there are no
co-owners, it is not merely a life-estate, etc.). Usually this requires
either a will giving 100% of the property to the surviving spouse and/or
the title to any property having been held by the spouses in joint
tenancy (with right of survivorship) or community property with right of
survivorship. If this is not the case, then a probate is almost always
required.

c. Estates Worth Less Than $100,000. If, though, the gross value of the
estate is $100,000 or less (without subtracting any liens, debts, deeds
of trust, etc.), there are simple procedures for distributing an estate
without using formal probate proceedings. Certain items are excluded
from the calculation of the $100,000. Some of these are:

i. Joint tenancy property (real or personal);

ii. Community property with right of survivorship;

iii. Half of all other community property;

iv. Life insurance and death benefits (assuming that beneficiaries are
named);

v. Real property outside of California;

vi. Any motor vehicles.

vii. Multiple party accounts.

d. Where Probate May Still Be Advisable. Even in these cases, probate
still may be appropriate, though, if there are strained family
relations, complex investments, large or complex claims by creditors, or
an interest in a good-sized business.

3. Estates Where There Is No Will. Where the decedent died intestate
(without a will), California law generally distributes the estate as
follows:

a. If there is a surviving spouse, that spouse receives:

i. All community property.

ii. As to the decedent’s separate property (if any):

(1) All of it if the decedent did not leave any surviving issue, parent, brother, sister, or issue of a deceased brother or sister.

(2) One half if the decedent has only one child or has one deceased child with issue.

(3) One half if the decedent leaves no issue but leaves a parent or parents – or leaves their issue or the issue of either of them.

(4) One-third if the decedent leaves more than one child, leaves one child and the issue of one or more deceased children, or leaves issue of two or more deceased children.

b. The rest goes first to the decedent’s surviving children or, if any
of them are deceased, to the children’s surviving issue.

c. If the decedent has no surviving children or deceased children with
surviving issue, the rest goes to:

i. The decedent’s parents, if living.

ii. The decedent’s brothers and sisters (or their issue if any of them are deceased).

4. Attorney and Executor Fees.

a. Attorneys’ fees for handling a probate are set by California statute
and are based on the gross estate, meaning that there is no subtraction
for any liens, debts, deeds of trust, etc.

i. The amount is based on a sliding percentage as follows:

(1) Four percent on the first one hundred thousand dollars ($100,000).

(2) Three percent on the next one hundred thousand dollars ($100,000).

(3) Two percent on the next eight hundred thousand dollars ($800,000).

(4) One percent on the next nine million dollars ($9,000,000).

(5) One-half of 1 percent on the next fifteen million dollars ($15,000,000).

(6) For all amounts above twenty-five million dollars ($25,000,000), a
reasonable amount to be determined by the court.

ii. For example, if the estate is a house worth $700,000, then the
probate fees for the attorney will be $17,000 ($4,000 + $3,000 +
$10,000) – regardless of the size of any loans against the property.

iii. If extraordinary services are required, the attorney may be able to recover additional amounts.

iv. This, of course, is a major reason for having a trust so that the estate can be distributed without having to go through probate.

b. The executor of a will is also entitled to the same amount of
statutory fees unless the will does no allow them, although the executor
can waive those fees if he/she wishes (and family members often do).

5. Bonds. Generally, unless there is a will that designates an executor
and waives the bond, the personal representative must post a bond to
guarantee that he/she will fulfill his/her duties.

a. If the person is out of state, the Court will generally require a
bond even if the will waives it.

b. Even if the will does not waive the bond, if all interested parties
request in writing that the bond be waived and the written waivers are
attached to the petition, the bond will usually be waived.

c. In estates that require a bond, the Court will generally set the bond
equal to the amount of the equity in the property plus the value of the
personal property, plus twice the value of the annual income from all
estate property.

d. The premium for the bond is often approximately one percent (1%) of
this total. Note that most bonding companies will not issue a bond if
the personal representative is not formally represented by an attorney.

6. Inventory and Appraisal. One of the first things that the personal
representative does is file an inventory with the Court of all the
assets of the estate that are covered by the probate. Assets that are
not subject to probate (for example, joint-tenancy property with right
of survivorship) are not listed.

a. Generally at the beginning of the probate a probate referee is also
appointed to make an appraisal of the estate assets. While it is
possible to seek a waiver from the Court of the appraisal by the probate
referee, good cause must be shown (such as the only items in the estate
are the deceased’s personal effects, which are minimal, and one piece of
real property that has recently been independently appraised).

b. Often the personal representative sends a letter to the probate
referee with basic facts regarding each major asset in order to avoid
delay and mistakes.

c. The probate referee is compensated by a commission of 1/10 of 1
percent of the total value of the assets appraised, with a minimum fee
of $75 and a maximum fee of $10,000. If the reasonable value of the
referee’s services is more, the referee can petition for a higher amount.

7. Notifying Creditors and Dealing With Creditor Claims.

a. Newspaper Publication of the Petition for Probate. The notice of the
petition to administer the estate must be published in a newspaper. In
many cases the newspaper can be a free weekly advertising publication.
Proof of the publication must be filed with the Court before the hearing
on the petition for probate is held

b. Notice to Specific Creditors. The personal representative must give
notice directly to reasonably ascertainable creditors before the later
of i) four months after the date of issuance of the “letters” appointing
the representative or ii) 30 days after the personal representative
first becomes aware of the creditor. Proof of the notice to each
creditor must be filed with the Court.

c. Time Limits for Creditors to File Claims. Each creditor must file a
claim. The general rule is that a creditor’s claim is barred if it is
not filed by the later of i) four months after issuance of the “letters”
appointing the personal representative or ii) 60 days after the date
that specific notice is given to that creditor. Creditors must file
their claims with the Court and serve a copy on the personal representative.

i. In addition, all creditor lawsuits must be commenced within one year after the date of death. This deadline is extended, though, if the
creditor files a timely claim and in certain other limited situations.

d. Allowance and Rejection of Claims. The personal representative must
file and serve any allowance or rejection of a claim.

i. If a claim is rejected, the creditor must bring a lawsuit in the
proper court within three months of the date of service of the notice of
rejection (or within three months after the claim becomes due, if that
is later) or the claim is barred. If suit is brought, the plaintiff must
notify the personal representative.

ii. If the personal representative does not reject a claim within 30
days after the claim is filed, the claimant may deem the claim rejected
and file a lawsuit. The estate cannot be closed while there are
unresolved filed claims, so some creditors are content to wait for an
eventual approval by the personal representative.

iii. The personal representative and the claimant may agree in writing that to refer the claim to a temporary judge. The hearing on the claim
is then heard without pleadings, discovery or jury and the determination
has the effect of a judgment.

8. Sales of Real Estate and the Independent Administration of Estates
Act. Selling real estate is often the biggest job that a personal
representative has.

a. With one exception, if the personal representative (executor) wishes
to sell real property that is part of the probate estate, the property
can only be sold with Court approval and notice to those who have an
interest in the property – and the sales price must be for at least 90%
of the appraised value.

b. The one exception is where the personal representative has been given
authority to act under the Independent Administration of Estates Act
(IAEA) and the property is not being purchased by the personal
representative or his/her attorney. In that situation the “at least 90%”
rule and the requirement that the personal representative “obtain the
highest and best price for the property reasonably attainable” do not
apply .

i. The request for authority under the IAEA may be made at any time,
though this is usually done as part of the initial petition for probate.

ii. Any interested party can object to the grant of authority, although the Court must grant the authority unless an objecting party can show
good cause.

iii. In any case, the personal representative must give notice of the sale to all affected parties. The notice must include all material terms
of the transaction, including the sales price and the amount of any
commission. Notice need not be given if all interested parties may sign
a waiver of notice or a consent to the request for authority.

c. With a sale of one to four units of owner-occupied property located
in California where a loan secured by the property is in default, the
sale agreement must comply with California’s relatively intricate
pre-foreclosure sale statutes. To be safe, anyone indicated in any will
as receiving an interest in the property, any surviving spouse and
anyone receiving an interest under the intestacy laws (if there is no
will) should be considered an owner.

9. Account, Report and Petition for Distribution. The personal
representative must file the final accounting, a report and a petition
for distribution when there are sufficient funds to pay all debts, the
time for filing creditors’ claims has expired, and the estate is ready
to be closed.

a. The requirement of filing an accounting (though not the report or
petition for distribution) can be waived if all person entitle to any
distribution from the estate sign and file a written waiver or a written
acknowledgment of receipt of their share of the estate.

b. With the accounting, the representative accounts for the financial
transactions that have happened since his/her appointment (or since the
last account, if an account has been filed with the court previously).

c. The representative also must file a report on matters that are not
self-explanatory from the exhibits. This includes actions taken under
the Independent Administration of Estates Act.

d. Finally, the representative petitions for approval of the accounting,
approval of his/her acts, compensation for the attorney and the
representative (if allowed) and distribution of the estate.

Methven & Associates
2232 Sixth Street Berkeley, CA 94710-2219
Phone: (510) 649-4019 Fax: (510) 649-4024
E-mail: admin@methvenlaw.com
Web site: http://www.methvenlaw.com
Copyright 2001-2003 Bruce E. Methven. All Rights Reserved.

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Technorati Tags: Ca Real Estate License

Technorati Tags: Ca Real Estate License

Technorati Tags: Ca Real Estate License

Negotiating the purchase or sale of a home can be fraught with struggles, ill-will and nastiness. coming the three deal-killers is easy if you remember one thing. Keep your emotions out of real estate contract negotiations. It will reward you handsomely. Plus, if you exit successfully from a ugly negotiation you still have to endure several weeks or months with the other side. On top of that, you might need to go back to the buyer and seller and ask for a closing date extension or inspection repairs. If wear out the other side early, they’ll be much more unlikely to agree to anything you ask for simply because they don’t like you or your attitude.

There are three outcome variables when a real estate contract is drafted by the buyer and presented to the seller.

The seller will accept the terms=contract.

The seller will change the terms=counteroffer.

The seller will reject the terms=the end, start over or walk away.

When the parties to a real estate contract accept the terms, it is known as acceptance. Most states require all real estate contracts to be in writing. And, they require that all offers of price or other terms be in writing. You might want to throw out a number out to a seller in a conversation, but it is not enforceable and is considered by real estate professionals as undesirable.

The counteroffer is the most common scenario in real estate contracts. Many buyers and sellers like the back and fourth of counteroffers and negotiations. But, be forewarned, some buyers and sellers have a low threshold to extended counteroffering. My rule of thumb is once you have gone back and fourth five times, you start to bog down the process. Each side should develop a strategy for negotiating before the real estate contract is formally presented.

In some situations a real estate contract is rejected before acceptance, by either side at any time. Some reasons for rejections are: incompatible closing dates or other terms, price, or another real estate contract is presented and it is more attractive to the seller. I am of the opinion that it is better for a contract to be rejected during negotiations than fall-through after acceptance. Like many things in life, accepted contracts are easier to get into, than out of.

Low-ball offers. Much more common in 2006 and 2007 than in previous years. Real estate market pendulums have swung in the buyers favor. That being said, some of the low-ball offers that buyers recently have attempted to negotiate were twenty-percent under list. Sellers of appropriately priced homes did not even respond. The rule of thumb is to not go below ten-percent of list for an opening price offer. If you can sweeten other terms of a contract to counter the low price, it could help keep you in good graces with the seller.

Counteroffers are like volleyball. Each time an counteroffer is given back to the other side, you will start to know where they want to go on price and terms. If sellers or buyers don’t move off their original price much, they are showing signs of digging in their heals, don’t expect much movement, each round. Early signs of rigidity in counteroffers tell me to buckle your seatbelt another notch, because the other side is not flexible.

The take-it-or-leave-it offer. Sometimes negotiations get near an impasse. The other side might call your bluff and say this is it, take-it-or-leave it. If you developed a strategy as I mentioned earlier, you will know what to do with the ultimatum. And, I hate to say it, the folks who do these ultimatums also like to try and come back after you’ve met the ultimatum and ask for another bump. No, no, and no.

Highest and best offer. Sometimes sellers or their agents get restless in negotiations and want to call your bluff. They’ll say give us your highest and best offer. This is a tricky situation, sometimes if your not in love with a home, you might withdraw the offer and not tip your hand. Especially if you might revisit it later after pursuing other homes.

Bidding Wars. Going into bidding wars is not for the faint of heart. You will probably over-pay for the home, but if you truly want it, it’s okay. You might though have to come up with some extra cash for the down-payment if it doesn’t appraise out, at an inflated price. One of the main problems in bidding wars is not knowing how many offers are on the table. Real estate license laws usually favor the listing agent ’s need for confidentially with their client, the seller. I’ve also seen all the offers drop out except for one, and you end up negotiating against yourself. I tell my clients to not participate in a multiple offer situation. They become competitive and emotional, I prefer to stay on the sidelines until the dust settles. Since you haven’t tipped your hand, if you are invited to submit your contract after the multiple peter out, you will have a fresh slate with all the frenzy just a learning experience for the sellers.

Don’t be rushed through negotiations. I have seen contracts put into acceptance in hours and at the worst, weeks. I would say, a good negotiation should take no more than two days, with five rounds of counteroffers. If either side starts to delay their response to a counteroffer more than one day, it’s a red flag. Give reasonable deadlines for a response to all your counteroffers.

Full price offers. Sometimes if a home is priced right and new to the market, and you really want it, offer full price. I’ve seen homes slip away over a thousand dollars, and in the scheme of things or as a ratio of list price, it’s dumb.

Withdrawing an offer. If you are working with unreasonable people, or terms that are agreed to are change and continually in flux, walk away. First though, withdraw the offer. Withdrawing can really tell the other side that they are unreasonable. Sometimes they get it, sometimes they don’t. But, most houses are worth the trouble of torture-some sellers or buyers.

Keep a written record of negotiations. It’s easy after a couple of rounds to forget that you agreed to leave the basement refrigerator, or as a buyer to shorten your mortgage contingency, make sure you write down all the changes each round, all experienced real estate agents do.

Mark Nash, is a residential real estate author, broker, columnist and writer based in Chicago. His fourth book 1001 Tips for Buying and Selling a Home received eighteen five star reviews on Amazon.com. His latest book; Real Estate A-Z for Buying & Selling a Home will be published in December 2006. Mark publishes a free monthly ezine for real estate professionals. Agent to Agent features ten articles that offer free reprints for agents, home buyers and sellers through EzineArticles.com . Real estate news and book reviews, Celebrity Homestyles, Home selling and buying tips and advice, Joke-of-the-Month, Help this Agent, and agent marketing tips. Over 5000 subscribers in the U.S. & Canada. Subscribe at: [http://www.1001realestatetips.com/forrealestateagents.html]

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Want to buy a home in California? If so, chances are you’ll need a California Mortgage Lender to help finance your new house. Fortunately, the Internet has made the mortgage process easy. You can even find a lender online with very little hassle! Here’s how to find a reputable California Mortgage Lender online:

Ask friends, family and neighbors

If you already live in California, some of the people you know in the state may have used a California Mortgage Lender online when they financed their home. Ask around among close friends and acquaintances to see if anyone can make a personal recommendation. Check with co-workers, family members and neighbors, too. A referral like this is often a good way to hear about the good–and bad–experiences people have had with various online mortgage lenders.

Watch out for predators

“Predatory lending” is a term generally used to describe any lender that is trying to take advantage of the borrower. Examples include charging high, unnecessary fees, pushing borrowers into a loan they can’t afford, or using lies and deception to obtain clients. Carefully review all fees and charges–your lender is required to give you a “good faith estimate”–plus the fine print, like loan terms and prepayment penalties. Be on the lookout for any false or misleading information, or any terms that are vague and unspecific. If the fees seem too high or too numerous, look for a different lender.

Check with officials

All California Mortgage Lenders and Brokers should be licensed with either The California Department of Real Estate or The California Department of Corporations. To help ensure your California Mortgage Lender is legitimate and reputable, check with these agencies to see if your lender is licensed. Avoid any lending company that is not licensed or has allowed its license to expire.

Be sure to check with your city’s Better Business Bureau office, as well. They’ll have a record of any complaints that may have been filed against your California Mortgage Lender.

Carrie Reeder is the owner of http://www.ABCLoanGuide.com, an informational website about various types of loans online.

View Our Recommended California Mortgage Lenders Online.

Also, view our recommended sources for a Free Credit Report Online.

Technorati Tags: Ca Real Estate License

Technorati Tags: Ca Real Estate License