Dear Michael: I am closing escrow in two weeks and the tenants whom are occupying the property are moving out on the day we close escrow. I am worried that they may not move out on time. What can I do to guaranty they move out on time?
Answer: Your best bet is to delay the close of escrow. The purchase contract clearly states that the tenants shall vacate the property at least five days prior to the close of escrow. Schedule your walk-trough the day after the tenants move out. This is the only way to be 100 percent sure that they have moved out and the property is not left in a state of disarray. Your seller is in breach of contract, unfortunately with tenants it may be beyond your seller’s control. Hold off depositing your down payment funds to escrow until you’re guaranteed that the tenants are out. Timing will be of the essence, the cut off time to stop the transfer (closing) is between 2 and 4 p.m. the business day prior to the transfer of your funds. If you close escrow with tenants occupying the property you then become a landlord. A position I am sure you do not want to take on.
Dear Michael: How come I’m paying more in property taxes than some of my neighbors who have similar houses?
Answer: Your taxes are not based on your neighbors assessed value, but are based on the price you voluntarily agreed to pay when you purchased your home. Before Proposition 13 the average property tax rate in California was three percent of assessed value and there was no limit on annual increases. In those days, if a house on your block sold for much more than you paid for your house, you shuddered in fear when you received your next property tax bill. Chances are, your new taxes would be based on what your new neighbor was willing to pay for his home. Things got so bad in the late 1970s that people were actually losing their homes because of uncontrolled tax increases. The assessment rate in California is now 1.25 percent and annual tax increases are limited to no more than two percent. When real property is sold it is then reassessed at market value, but the rate remains at 1.25 percent and the new owner is then protected by the two percent cap on annual increases. The property may be reassessed under certain conditions other than a change of ownership, such as when additions or new construction occurs.
Dear Michael: My friend just bought a house a few months ago and I agreed to be the co-buyer of the house. Now, I want to get off of the title because my friend who bought the house just told me that he will not be able to make these payments since his wife just lost her job. What should I do? I am just the co-buyer.
Answer: You’re not the cobuyer! You are an owner of the property, and I presume you’re name is listed on the mortgage as well. As far as the mortgage lender is concerned, you are (and always were) considered a primary borrower on the property. If your friend fails to pay the mortgage, the lender will come after you for the money and his failure to pay on the mortgage will damage your credit history and score. The only thing you can do now, if you want to protect your credit history and score, is to make the payments on this property. If you’re listed on the mortgage, you’re legally liable for those payments. If you fail to make the payments, the lender will foreclose on the property. If you can’t make the payments, tell your friend to move out of the property, and find a renter to help defray costs until you can get the property sold. Unfortunately, you’ve discovered the primary danger of “lending a signature” to someone …if that friend suddenly can’t afford to make the payments, you’re on the hook. For more details, please seek the advice of a real estate attorney.
Michael Kayem is a Realtor with Re/max Estate Properties serving Culver City and the Westside since 2001. You can contact him with your questions at (310) 390-3337 or email them to him at: homes@ agentmichael.com
