Wednesday, August 29, 2007

Can we avoid probate any other way than a trust?

Can we avoid probate any other way than a trust?

In Nevada there is another mechanism that allows your heirs to receive your property without probate other than by you creating and managing a trust. Nevada is one of but eight states in the nation that provide for Transfer on Death Deeds. It has only been available for a couple of years, and can be a very good tool for estate planning. We’ve only recently become aware of it and thank local attorney Karen Winter for introducing and orienting us to this means of conveyance.

With a Transfer on Death Deed (TODD) the owner(s) execute a deed and name the recipients of the property, those they intend to inherit it. The Deed must be recorded prior to the death of the owner. Once recorded, the owner may continue to do with the property what he wants with no restrictions. He can re-finance it, sell it, or even record another Transfer on Death Deed changing the recipients. If it is sold the TODD is voided. Likewise, if a subsequent TODD is recorded the first is voided. The owner even has the right to rescind the TODD at any time. For details read NRS 111.109. It is easy reading as far as laws go.

This is a reasonable tool for estates in which the real estate comprises the majority of the estate’s value. What happens is on the demise of the owner the property is immediately conveyed so it is no longer a part of the estate. In many cases, the result of removing the real estate is the resulting estate value is small enough that probate is not required thus the heirs avoid the expense, time and aggravation of a probate. Note that the property is immediately conveyed – the Executor of the estate consequently has no power/effect on the new ownership of the property. The Executor may be an owner, but the property has absolutely no relationship to or with the estate.

Our Advice: Though the law specifically states a married grantee may receive title as “sole and separate property” without a quitclaim from their spouse, be advised that to get title insurance when selling the property you will likely need to get one. If you are considering using this tool be very careful in assessing who you are going to give your property to. You can give it to multiple parties in various ownership percentages, i.e.- one gets 16%, another 23%, etc. Understand, however, that you are creating a “partnership” of sorts which inherently creates a precarious situation. Make sure they get along. If they don’t they may have to resort to a partition lawsuit to unwind their common interest. Make sure, too, that you address how the mortgage payment, taxes, insurance, utilities and maintenance will be paid while they own the property.

A Transfer on Death Deed can be the best and worst of things – think it through before you use it. Properly used it can put your mind at ease and save your heirs a lot of money, time and aggravation. Make your intentions and desires known, make a plan, and execute your plan. Questions? See your attorney and/or CPA.
Experience is Priceless! Lisa Wetzel & Jim Valentine, RE/MAX Realty Affiliates,, 775-781-5472.

Wednesday, August 22, 2007

Where Have All the Buyers Gone?

We’re on the market but aren’t getting showings … where are the Buyers?

Our initial response is to address your price … are you priced right? That is elementary and essential. Assuming your price is right let’s look at today’s Buyers. Buyers today are very informed. They generally know the market, what is going on in the community, what is going on in the financial/lending world, and the many other factors that can affect market dynamics. This information is available on the internet, in print publications, and other media. They know what is happening so-o-o … “Where are the Buyers?”

There are Buyers actively shopping and making offers to buy. Their quantity is not what it was a couple of years ago, and there are many, many more properties available for them to buy. What is changing is where people are buying. When the Carson Valley real estate got too pricey a few years back people went to Dayton for affordability and investment opportunity. As Dayton got priced up they went to Yerington. As the prices came down this scenario unwound, the Yerington market slowed, Dayton slowed and they came back to the Carson Valley which is now quite affordable.

It doesn’t end there. Our market has been driven by people moving in from out of state, primarily from California. For some time we’ve waited for those people to sell their homes thinking that their slow market was causing our market to stall. Now we are seeing some of those markets so price decimated that the need or desire to buy in our market isn’t what it was. Investors that were investing in Northern Nevada can buy properties in their local market in the $300,000 range that were in the $500,000’s a few years ago. They are investing locally. Likewise, people that wanted the lifestyle of a $500,000 home, and were coming to Nevada to get it can stay home and achieve it today without moving to Nevada. Those coming for tax relief? Most people in the $300,000 price range aren’t that dramatically affected by the Nevada tax relief and many are now staying home.

Our Advice: If you are determined to sell in this market … price it right. There is no substitute. Your agent can’t buy an ad big enough to overcome improper pricing. Look ahead – where are you going and what will selling your property do for you. The market will change in time – it is up to you to decide if you are going to wait for it, or act now and achieve your immediate real estate goals. Don’t be hung up on price or value – it is your position in the market that counts. That will get you where you’re going.

Be aware of where you are positioned in the market. The Buyers know your market position… which may be why you aren’t getting showings.

Experience is Priceless! Lisa Wetzel & Jim Valentine, RE/MAX Realty Affiliates,, 775-781-5472. Email us at

Wednesday, August 15, 2007

Physical Condition of Foreclosure Properties

I’m going to bid on a foreclosure property … how do I know its physical condition?

That is one of the inherent risks of buying property at foreclosure auctions … you generally don’t know the condition – especially the interior. If the property owner still occupies the property you can’t access it unless it is listed for sale and you can set up a showing. If it is vacant you might be able to peek through the windows, but you are technically trespassing. Generally, you are buying the proverbial “pig in a poke”.

The Lender doesn’t own the property until after the foreclosure, and then only if there are no bids to match their minimum bid amount and they end up receiving the property. That situation presented a dilemma for the Nevada Legislature with the Seller’s Real Property Disclosure form they require for all residential transactions. In a foreclosure sale the Owner isn’t selling the property, and the Lender never lived in it. How could the Buyer be protected from known defects? Who is responsible for disclosing them?

Recognizing that the Owner isn’t involved in a foreclosure sale, the State added a clause in 2005 that requires the Trustee or Beneficiary to disclose any defects of which they are aware. The situation is still problematic for the Trustees or Beneficiaries usually have not been in the property – ever. They might, however, know of problems related to the property and are now compelled by law to disclose those before the property is conveyed. Such problems can be a neighborhood issue, something like all the windows having been vandalized, or the roof being blown off. Any defect required by a law to be disclosed must be disclosed if they have knowledge of it. Perhaps, there was correspondence from the Owner to the Lender relating the need for a new roof and a request for relief from payments so they could afford it. This type of knowledge must be related to a new Buyer by the Lender.

Our Advice: Despite the legal requirement for disclosure, proceed with caution. The Lender most likely has no knowledge of the condition of the home. If the Owner wrecks havoc as they vacate the property just prior to or subsequent to the sale the Lender would have no knowledge of the damage. Lenders usually want to sell ‘As Is”, and may ask that you waive the SRPD requirements. If you are to waive the requirements remember that you must sign the waiver document and have it notarized to be valid. A Buyer can waive the SRPD requirement in any transaction as long as it is notarized.

Be smart in your foreclosure acquisition. Your successful bid might seem like a good deal until you walk through the front door, or when you get a physical inspection to ascertain the condition of the home. Build a cushion in your bid for the unexpected … you can expect it.

When it comes to choosing professionals to assist you with your real estate needs… Experience is Priceless! Lisa Wetzel & Jim Valentine, RE/MAX Realty Affiliates,, 775-781-5472.

Wednesday, August 8, 2007

Selling Smart in Today's Market

How in the world can we be smart in today’s market?

Everyone wants to be smart in their real estate moves. Really, most just don’t want to be dumb. Unfortunately, many are now considering non-action for action and are hiding behind the mantra of, “We’re not going to give it away!”

It isn’t that kind of market, folks. Consider what the Chief Executive of Countrywide Financial, Angelo Mozilo, the Largest U.S. mortgage underwriter, said on July 25th, “No one saw the deterioration of real estate values coming.” He went on to say, “The Company is seeing home price depreciation at levels not seen since the Great Depression.” If you still can’t adjust your expectations to reality, or if you are wondering why you weren’t told about this think about the above statements. The number one man of the largest mortgage company in the nation says they didn’t see it coming. Don’t fault yourself, or your agent – take action now.

We’ve recently seen amazing Seller resistance to price adjustments in all market segments. It has been frustrating for agents offering professional insight and perspective to Sellers in denial. The results are numerous agent “firings” of customers. This is when they give back the listing because they feel they can’t get the job done at the List Price in today’s market. Given that Mr. Mozilo thinks it will be mid-2008 or even 2009 before things come back, it is important to evaluate your situation with brutal honesty. Listen to your agent.

Our Advice: Quit worrying about what your property was worth in 2005 – that was then. Don’t scheme about how you can take advantage of an unsuspecting out-of-state Buyer – Buyers are smarter now and nobody pays too much in this market. If you have an opportunity to replace your residence with something equally affected by the market as your present property – sell and buy and get on with your life. If you have health or family issues that are affecting your need or desire to sell – price it right and get on with your life, prioritize right between money/health/family and your decision should be easy. Don’t try to fool your agent into believing your value story – if they believe you then you haven’t selected the right agent to work for you. Your agent must take a risk right now. Your agent must tell you what you don’t want to hear … the Truth. The risk of disappointing you now greatly outweighs the risk of really disappointing you in six months. The good ones will take that risk to serve you professionally – it’s up to you to listen and take action.

Property is selling … at interesting prices. Yours can sell – when you remove the blinders and have an honest look at where you fit in today’s market. Buyers are “pricing forward” in their offers – something Sellers were doing not too long ago in the other direction. If you don’t have to sell now … don’t!

When it comes to choosing professionals to assist you with your real estate needs… Experience is Priceless! Lisa Wetzel & Jim Valentine, RE/MAX Realty Affiliates,, 775-781-5472.

Thursday, August 2, 2007

Who Pays Which Closing Costs?

How do we know who pays what part of the closing costs?

Your question is timely. With the influx of new agents in the real estate industry in recent years some of the traditional closing cost splits in Douglas County have been addressed differently in offers. All closing costs are the subject of transaction-specific negotiation, but there is a “baseline” of how closing costs are treated so one knows if they are being offered “less” or “more” than what they could customarily expect.

One of the biggest costs of a real estate transaction is title insurance. It has long been the custom in Douglas County that the Owner’s Policy be paid equally by both parties, and the Lender’s Policy be paid by the Buyer. Just over the County line to the North in Carson City the policy is that the Seller pay for the Owner’s Policy. Sometimes Carson agents working in Douglas that aren’t familiar with our custom ask in their offer that the Seller pay for the policy. What is happening now is many local agents are providing for the Seller to pay the cost of the policy as a matter of course, not negotiation. Either practice, innocent of malice as it may be, can cause consternation on the part of Sellers resulting in unnecessary negative emotion in the negotiations.

Inspection costs such as Physical, Pest, Roof, Septic, Water Quality, etc. are typically Buyer paid costs. Both sides, however, benefit from inspections – Buyers can consider it “insurance” that they aren’t buying the proverbial “pig in a poke”, and Sellers have the liability relief of having a licensed third-party inspecting the condition of the home. These costs can be reasonably negotiated due to their mutually beneficial nature.

Our Advice: Some folks get upset when they sell if they paid half the cost when they bought and are now expected to pay the entire title insurance cost. What ultimately counts is the net proceeds check you receive. Don’t get hung up on principle issues if the dollars meet your wants and/or needs. Buyers should be advised that the Seller isn’t “getting in their pocket” against what is normal if they counter a customary item in a customary manner, rather they are treating them in a manner they deem to be fair. Having the Buyer pay the entire cost would be seeking a financial advantage. Despite traditional customary practices, it is not unusual these days to see Sellers paying much of the Buyer’s closing costs as an incentive for them to select their property versus another.

Both sides of a real estate transaction are negotiating for their financial benefit. Closing costs can total thousands of dollars so it is important to understand who pays what and why. An understanding of what is customary helps all parties understand how they are being affected financially, good and bad, and keeps unnecessary emotion out of the negotiations.

When it comes to choosing professionals to assist you with your real estate needs… Experience is Priceless! Lisa Wetzel & Jim Valentine, RE/MAX Realty Affiliates,, 775-781-5472.