Author Archives: Jack Edwards

What happens to your real property when you get a divorce?

First things first.  I am not an attorney and cannot provide legal advice.  I am only sharing information from my experience as a realtor.  I always suggest that you seek legal advice from a licensed attorney on legal issues.

I am a licensed realtor in California only, and therefore this discussion is only applicable to California.  California is a community property state and, generally speaking, real property purchased during a marriage is considered to be community property and owned equally by both spouses, regardless of who is paying the mortgage or whose name is on the deed.  Speaking from personal experience, I have owned a home and gone through a divorce, and I have worked with clients who were experiencing divorce and selling their family home, and it is important to work together during the process and keep each other informed.

Keep in mind that you have options for handling your Divorce.  Most of us have seen the movie, “The War of the Roses,” where everything about their divorce was an ugly court-litigated battle. No offense to attorneys meant by the following statement, but unfortunately, in that type of situation, the only winners are the attorneys. The more a couple fights, the more it costs them in attorney’s fees. So be smart. Working together to settle the issues between each other will go a long way to getting through the process with the least amount of pain.

My personal suggestion to anyone reading this blog post that may be contemplating a divorce is to consider looking for an attorney who practices Mediation and/or Collaborative Divorce.  Both are out of court methods to handle your Divorce with less financial and emotional damage to your family.

If you are facing separation or divorce, the family home may need to be sold so that each party can receive their share of the equity in the home and hopefully be in a position to purchase a replacement property.  Depending on the income of each party, this replacement home may need to be a smaller property, a condo or a townhouse.

Sometimes, it is possible for one spouse to “buy out” the other spouse by refinancing the home and paying one-half of the equity to the other spouse.  However, with interest rates today, we may find that it takes the income of both spouses to qualify for the mortgage on the home and the spouse who wishes to remain in the home cannot qualify to refinance the mortgage on their own.  Some lenders offer the option for one spouse to “assume” the mortgage after demonstrating that they have paid all of the payments on the loan for a period of time.  This is rare, and can be an expensive and a lengthy process and you would have to check with your lender to see if this is an option for you.

Assuming that one spouse can afford to buy the other spouse’s interest in the property, the spouse coming off of the loan will need to sign an Interspousal Transfer Deed at the time of the refinance to remove them from title.

If the house was purchased using a VA loan, it may be in the best interest of the veteran to sell the home during the divorce so that the veteran can qualify for a VA loan on a future purchase. I suggest that the veteran read the VA Loans Booklet as well as to check with the Veterans Affairs office for more info.

If a divorcing spouse is over 62 years of age, he/she may qualify for a reverse mortgage on the property. If you are considering using this type of mortgage, always talk with an experienced reverse mortgage specialist about this option to see if you qualify and how this mortgage differs from a regular FHA or Conventional mortgage.

As a reminder, it is important to seek legal advice from an attorney and/or mediator if you are contemplating a divorce and want to sell your property, refinance your home to buy-out your spouse, assume the mortgage, or purchase another property before your Divorce is final.

There are important legal steps to ensure that the house will be considered your separate property and not community property after a refinance or buy-out.  Many people erroneously believe that just because they have separated and filed a Petition for Dissolution with the Court, anything they purchase afterwards will automatically become their separate property.  This is not always the case, so please do consult with an attorney.

I want to offer a special thank you to Lana M Shearer, Law and Mediation, APC. for taking the time to review this post for me.

Fire Hazard Mapping Zones

When you are in the process of purchasing a house or vacant property, we suggest that you make contact with your insurance company early on to determine if they will provide fire insurance as well as the cost for said insurance. Oftentimes, clients chose to purchase in a lower fire hazard risk zone because of the cost of insurance. So, don’t wait until you are ready to close escrow to find out that your insurance may be $10,000 or more per year because the house or property is located in a high fire hazard zone.

Additionally, during the process of buying a home, buyers should make sure that they get and read a natural hazard disclosure report because it will provide information on the fire hazard risk. To create the report, the natural hazard disclosure companies rely on fire hazard zone maps provide by the California Department of Forestry and Fire Protection. Noted below is the information that shows the appropriate Public Resources Code that directs the creation of these maps.

Public Resources Code 4201-4204 directs the California Department of Forestry and Fire Protection (CAL FIRE) to map fire hazard within State Responsibility Areas (SRA) based on fuel loading, slope, fire weather, and other relevant factors present, including areas where winds have been identified by the department as a major cause of wildfire spread. These zones, referred to as Fire Hazard Severity Zones (FHSZ), classify a wildland zone as Moderate, High, or Very High fire hazard based on the average hazard across the area included in the zone.

Below is a link for the maps:  Link To Fire Hazard Severity Zone Maps for 2022

Another aspect of this situation is Defensible Space which is defined as the space between hour home and the surrounding area.  If a home is in a very high fire hazard zone, the seller must provide a specific disclosure to the buyer. Here is some additional information on this disclosure.

Here is more info from Cal-Fire about Defensible Space.

Property Tax Relief for Victims of Fires

I originally created this post in 2017, but with the fires of 2019 I thought I needed to update the info for the victims of the 2019 fires.

Also, as a result of the fires, many homeowners have had policies cancelled, even though their homes did not burn. Additionally, many home buyers who are looking at foothill neighborhoods are finding that the cost of insurance is now several thousand dollars per year because of the cost of the fires. One of my local agents, Blake Mori, told us that your homeowners should ask their agents about the California Fair Plan Property Insurance program.  I am not a homeowners insurance agent and don’t know the ins and outs of insurance, but if you need more info and your insurance agent cannot answer your questions, let me know and I will put you in touch with Blake.

Please pass this on to your friends who have lost their homes or have experienced at least $10,000 in property damage due to the fires.

Fire victims are eligible for a program that temporarily reassesses their property to reflect a lower value based on its damaged condition.

Once you rebuild, a county official restores the property to the assessment value it held before the fire.

To qualify, property owners must first file a claim with their county assessor.  You have up to one year to apply for the tax relief.

Click here to find out how to contact your assessor

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As you might guess, this document is a compilation of information from our own efforts as REALTORS, as well as input from other REALTORS in our Coldwell Banker office.  I hope it has been of value to you.  Don’t hesitate to email us with any suggestions that will make this document better for you and your fellow homeowners!

Be sure to follow us on Facebook at www.Facebook.com/ElkGroveRealEstate.  For information about properties available for sale and for more information for buyers and sellers, please visit our website at www.TeamEdwardsRealEstate.com and don’t hesitate to give us a call or drop us an email with your questions.

WANT TO USE THIS ARTICLE IN YOUR E-ZINE OR WEB SITE? You can, as long as you include this complete blurb with it: Jack Edwards, your real estate advocate, specializes in helping buyers and sellers in Elk Grove, CA,  and the greater Sacramento area. BRE License # 01331087

 

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