DON’T FORGET THESE COSTS OF OWNING A HOME. INSPECT, CHECK, SAVE, SMILE. YOU’RE A HOMEOWNER!
Whether you are buying a home in probate or a “regular” home, you are bound to have some costs you forgot about as you look forward to owning your new home. In a typical, non-probate home, you can hire inspectors to ensure the house you buy passes the rules set up by the California Realtor Board.
Know Your Potential HOMEOWNER COSTS
Here are a few typical ongoing costs, yet we want to remind our buyers of all of these as they budget (especially) for their first home purchase, be it “standard” or probate.
- Utilities can be quite high. Heating and air conditioning can be expensive.
- Property taxes could be a new cost for an apartment dweller or someone who has moved from another state, county, or country.
- Appliances. Replacing appliances when the previous owner took the washer-drier, refrigerator, and barbecue can cost a few thousand dollars. Okay. The barbecue may be over the top, but some people take the free-standing stove!
- Homeowners’ insurance. It’s a new expense if you’ve never owned a home.
- Landscaping upkeep. Do it yourself? If you have the time, it’s great, but it may be too much to handle. Remember to budget for it.
- Yearly or biannual odds and ends. Gutter cleaning, chimney sweeping, pest control, tree-trimming, and other not-DIY-friendly tasks requiring special equipment and dangerous ladder-climbing put dents in the best budgets.
HOMEOWNERS ASSOCIATION OR PLANNED COMMUNITY DUES IN SOME NEIGHBORHOODS
The State of California Department of Real Estate website offers many tips on buying homes here. For instance, they recommend that once you find a house that meets your family’s needs, you should consider hiring a qualified inspector to check the home’s plumbing, electrical, and structural integrity. By having the house assessed for possible repairs before buying it, you’re allowing yourself the chance to negotiate any needed reparations with the seller.
As realtors for many years in Southern California and specifically as probate realtors, we at The CREM Group have seen that maintaining a home requires unexpected expenses for repairs and upkeep. Whether you’re looking in Orange County, Los Angeles County, or San Bernardino Counties, these homeowner costs come before ‘fun’ parts of remodeling and landscaping. But people sometimes spend on the fun things and have no money left for an expensive ROOF or PLUMBING repair. When you decide to buy a home, remember to include a “surprise” stash in your budgeting process.
HOW TO MINIMIZE SURPRISES
One of the things you can do is to be aware of the “Disclosures” required by the State. Before you buy the home, you are given some helpful, basic information about the property. Two of the most critical disclosures in a residential purchase transaction are the
- Real Property Disclosure Statement
- Agency Relationship Disclosure
If you want to be really prepared, check out the list of these six charts from the California Association of Realtors showing what needs to be disclosed and to whom in a variety of sales and lease scenarios. Although you can only access the lists in their entirety if you’re a realtor, at least you’ll have an idea of what you can ask.
REAL PROPERTY DISCLOSURE STATEMENT
The seller completes the disclosure, which covers the property’s physical condition and uncovers potential hazards or known imperfections that may be connected with it. While the seller is mainly accountable for the problems presented in this disclosure statement, the real estate agent is also responsible. As your real estate agents, we conduct a visual inspection of the property (even in probate cases, we do this) and mention any readily observable defects we find during our review. The Real Property Disclosure Statement also presents any assessments, special taxes, or other elements that may have a significant effect on the property value, and the future costs that might accrue to owning that property. This statement goes a long way toward minimizing surprises.
AGENCY RELATIONSHIP DISCLOSURE
As your real estate agents (probate or otherwise), we at The CREM Group are required to provide you with a written document stating whether we represent you as the buyer exclusively or as the seller only. Sometimes we act as a “dual agent” representing both buyer and seller. This does not have a specific effect on the homeowner’s costs. However, it is part of ensuring you carefully review and understand everything that surrounds your purchase, which includes what responsibilities go with the real estate agent of your choice.
WHAT COSTS ARE THE “WORST” REPAIRS FOR DESTROYING BUDGETS?
Replacing a roof is a huge expense. Plumbing repairs can be nasty-costly. Foundation problems from California earthquakes can break the budget. Flooding and weather-related situations (a tree falls on your home) can be a problem, especially if you have yet to read the fine print on your insurance policy, and it’s not covered, or your deductible isn’t friendly.
In a probate purchase, the home is often marketed and sold “as is,” and the sale price is usually lower if there are lots of visible problems. However, due diligence requires that the same inspections as for any home are completed beforehand. It’s best to do the inspection to ensure that the repairs do not eat up the discount off the probate house’s price to make it livable or re-sellable for a profit.
As a prospective buyer, you will find that conservatorship, probate, and trust homes can often provide a roof over your head for less money than a “regular” home if you can wade through the probate process (which can last up to a year). Still, beware of your acquisition and your repair costs.
As a probate property seller, you have costs, too, which we’ve covered in previous posts in THE JOURNAL. Please contact us if you need any further information.
WHAT WE RECOMMEND FOR PROBATE OR REGULAR HOME BUYERS (and sellers)
All is not gloom and doom. Forewarned is fore-armed, as we always say. We suggest:
- Having a good idea of what repairs could be necessary.
- Putting aside money every month to prepare for the worst.
- How much? Some people recommend putting aside an average of 1 to 2% of the home’s value away every year for that rainy-day roof repair.
- When you finally purchase your (probate) home, you may use the rainy day fund in some years, and not others. Either way, you’ll be glad it’s there.
- Trying to keep ahead of the catastrophe by repairing weakened or old items around the home (if you’re selling). Encourage your parents or grandparents to inspect the roof. Hire a plumber to check the lines every few years. Termites should be handled yearly, or they can eat away your family home’s garage or the kids’ playroom if they’re really hungry.
WORK WITH EXPERIENCED INDIVIDUALS
We are a broken record. Surround yourself with people (like The CREM Group) who have knowledge of markets, homes, neighborhoods, and lenders, as you face any real estate transaction, pandemic, probate, conservatorship, trust, or otherwise.
As long-time probate real estate agents and attorneys working in and around all kinds of properties in Los Angeles and Orange and San Bernardino Counties, The CREM Group has ensured we support our clients, so they know the alternatives to buying, selling, or renting probate, trust, and conservatorship homes and commercial properties in California.
As always, contact us by email here if you have any questions about real estate, probate real estate, conservatorship, or trust real estate properties, especially in Los Angeles, Orange County, and San Bernardino County in California.
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DISCLAIMER: This content is meant purely for educational purposes. It contains only general information about real estate and legal matters. It is NOT legal advice and should not be treated as such. We recommend consulting a legal or tax professional before acting on any material, opinion, or point of view described herein.