Don't wait to get a "Date of Death" Appraisal...
I sell many homes where the original owner passed away, and the successor trustee of a trust is the person selling the home. As a rule, I do not give tax or legal advice to my clients since I am not a CPA and not an attorney...but I see this situation enough that I feel the need to make a suggestion to sellers of homes after the death of the owner - talk to a CPA immediately, and obtain A DATE OF DEATH APPRAISAL.

A Date of Death Appraisal is a formal valuation of the home by a state-licensed real estate appraiser upon the date of death of the owner.

You should look into this sooner than later. The estate will likely need one for tax purposes, whether you decide to sell the home immediately or wait.

For too many people having this done is an afterthought. Be proactive. Recently I sold a home for a successor trustee where the owner died over 8 years ago. The longer you wait to have a this done, the more expensive the appraisal will be. The appraisers I refer to my clients typically charge $400-$500 for an appraisal, however if they have to dig for comparable sales information that is not readily available or current, the cost will definitely increase. Additionally, if you get this done sooner than later, while you still have access to the property, the appraiser can actually see the home. If you wait a long time...and maybe even wait until after the property is sold (very common), then the appraiser not only has to dig up old information but also won't have the benefit of being able to see the home in person.

My suggestion - talk to a CPA and don't delay getting this done. If you need a referral to a great appraiser, reach out to me and I can connect you.
New Listing - 9434 Pandora Court, Orangevale, CA 95662
Well-maintained 3 bedrooms + office / possible 4th bedroom, 2 bathroom, 1813sf Orangevale home is ready for a new owner. Lovingly cared for by one owner for more than 30 years, this home is the ideal blank canvas for your personal touches! You will love the spacious, open layout, separate living and family rooms, updated kitchen with granite counters, formal dining area, large bedrooms, central heat and air, dual pane windows, composition roof and two-car attached garage. Inviting built-in swimming pool is the ideal place to play or entertain, and large sunny garden area is a great place for your green thumb! HUGE attached workshop with high ceilings and 220v is just waiting for your crafts and hobbies, and large covered RV or boat access can store all of your toys. Bring your imagination! All this located near award-winning K-12 schools, parks and recreation areas, shopping and more. Don't wait! For more photos and detail, visit 9434 Pandora Court, Orangevale, CA 95662.
New Listing - 3428 Kauai Road, West Sacramento, CA 95691
Adorable 3 bedroom, 2 bathroom, 1362sf Bridgeway Island West Sacramento home. You will love the open layout, separate living and family room areas, kitchen with tile counters and breakfast bar area, dining room, integrated surround sound speakers, gas fireplace, laminate flooring throughout, and custom-painted interior. Backyard has a large covered patio, plenty of room for entertaining and lots of sunny space to garden or play! Two-car attached garage. Located in close proximity to schools, parks, and nature trails. Don't wait! Offered at $369,900. For more photos and information visit 3428 Kauai Road, West Sacramento, CA 95691.
Graduated with my Master's Degree in Public Policy and Administration!!!
I have a list of goals. Small goals, big goals, and BIG goals. And about 5 years ago, I set a BIG goal for myself. I decided to work toward a Master's Degree in Public Policy and Administration (MPPA).

Why? My friends and family all asked me this. I did not have a clear answer other than the fact I had a deep interest in housing policy issues thanks to my involvement in the Sacramento and California Associations of Realtors, and I felt I wanted to deepen my understanding of policy analysis. Analysis and advocacy are two very different things. 

I earned my Bachelor's Degree in Spanish back in 2001 -- a far cry from the study of Public Policy and Administration. Before I could even apply to the MPPA program, I had to enroll in prerequisite coursework in Economics, Government, and Statistics. So in the spring semester of 2014 I enrolled at American River College and for the next three semesters knocked out those classes. I applied for the MPPA program and accepted, and in the fall semester of 2015 started the MPPA program at California State University Sacramento

Initially I felt like a fish out of water - generally I was a bit older than most of the other students in the program, and most of the other students worked for public agencies, in legislative offices, or were lobbyists. Thankfully, they all were my nerdy kindred spirits and we all had a love for policy. I fit right in.

Not only did I fit right in, but as it turns out, I really excelled in my coursework. I took classes in applied economic analysis, public administration, quantitative analysis, urban policy, research methods and more. I wrote papers on all sorts of nerdy policy topics ranging from homelessness, the supply and demand of labor markets, short-term rentals and the sharing economy, organizational performance metrics, homeownership rates, and determinants of home value. I wrote my thesis on the positive and negative spillover effects associated with the growth in numbers of Homeowners Associations in Sacramento County. It was a lot of hard work and I loved every minute of it. 

I liked it so much that I got involved in the Graduate Association of Students in Public Policy and Administration (GASPPA) and served as Treasurer for 2017-2018. The Faculty asked me to sit on the hiring committee for a new faculty member, which was a really interesting experience. My professors encouraged me to submit my research on Homeowners Associations to different student research symposiums, and I ended up presenting my research in three separate events, which was really awesome. 

And the craziest part...I had the highest GPA in my program at 3.97 (darn that one A-). The faculty of my department selected me for the 2018 Cristy Jensen Award, named for the founder of the MPPA program. And last but not least, the Dean of the College of Social Science and Interdisciplinary Studies named me Graduate Student of the Year for 2018 for the SSIS Department. And I graduated "with Distinction". 

So May 18, 2018 I walked across the stage at the Golden 1 Arena. What a ride! I can't say enough great things about the program, faculty, and my fellow students. It was a lot of work, and during my 1.5 years of prerequisites and 3 years in the MPPA program I managed to do all that and remain a top producing Realtor. In fact if anything I just got busier while I was in graduate school.

So now what? Well I am maybe the nerdiest Realtor in Sacramento. And being done with school, I have more time on my hands for something - I guess my next BIG goal, whatever that turns out to be.






New Listing - 2574 16th Street, Sacramento, CA 95818
Enchanting 2 bedroom, 2 bathroom, 1105sf Land Park cottage! All the amenities of a newer home coupled with lots of vintage charm! You will love open layout, hardwood flooring, formal dining area, remodeled kitchen with concrete counters and a classic Wedgewood stove. Spacious bedrooms, remodeled hallway bathroom, master bedroom with huge walk-in closet, jetted tub and separate shower. Partial basement allows for extra storage. French doors lead to a backyard for the ultimate entertainer with built-in BBQ, covered pergola area! Lots of sunny space to garden and play, and garden shed for your green thumb accessories. Close proximity to William Land Park, Broadway Corridor, breweries, schools, public transportation, and easy downtown access. Don't wait! Offered at $525,000. For more photos and detail, visit 2574 16th Street, Sacramento, CA 95818.
New Listing - 1805 Suffolk Way, Carmichael, CA 95608
Welcome to this stunning 3 bedroom, 2.5 bath, approximately 2,290 square foot Shelfield Estates home! You will love the spacious and open layout, built-in office niche, remodeled half bath off of the entryway, separate living and family areas, a double-sided fireplace, a formal dining room and the den area with a built-in entertainment center with French doors opening to the backyard. There are over-sized hallway bedrooms, a remodeled hallway bathroom with dual sinks and a stylish sliding barn door. The master suite has a huge walk-in closet and a remodeled master bathroom with an enormous shower and dual sinks. The backyard is great for entertaining with built-in seating and offers lots of shady and sunny space to garden or play. All this in close proximity to Shelfield Park, the American River Parkway and award-winning schools. Don't wait! Offered at $679,000. For more photos, 3D Virtual Tour, and information please visit 1805 Suffolk Way, Carmichael, CA 95608.

New Listing - 2487 Torino Street #6, West Sacramento, CA 95691

Lovely 2 bedroom, 2 bathroom, 1,307 updated ground floor single level condo in Riva on the River in West Sacramento! You will love the open spacious layout, large kitchen with granite counters and pantry cabinet, window coverings throughout, freshly painted interior, brand new flooring, master bedroom suite w/outdoor access and large walk-in closet. 2-car tandem garage. HOA dues are $220 per month. Community has lots of great amenities such as a built-in pool, playground, and manicured green space. Short distance to the river, downtown Sacramento, schools, shopping, and freeways. Don't wait! Offered at $299,900. For more photos and information visit 2487 Torino Street #6, West Sacramento, CA 95691.

My clients and I featured in a Sacramento Bee article about millennial home buyers...
I think my clients Farrah and Andrew said it best as they were quoted in the Sacramento Bee article - that millennials aren't different from other generations. They have the same goals, and they want to buy houses.

Duh.

I work with a lot of millennial buyers (and sellers, since after all they have been buying homes for a while now). The fact is there are a lot of millennials. And you know what, the bulk of that generation is turning the corner of their 20's into their 30's. Not all of them want or have traditional households, but once those student loans are paid down or off, and they settle into a career, and they meet someone and maybe want to co-habitate or get married or have kids - SURPRISE! They buy homes.
New Listing - 7780 Reenel Way, Sacramento, CA 95832
This 3 bedroom, 2 bathroom, 1148sf  Meadowview fixer home is an excellent value and the perfect blank canvas for your extensive renovation. Nice layout, cute kitchen with pantry, formal dining area, spacious bedrooms, and huge approx .37ac parcel which is a great place for outdoor fun. Close to public transportation, shopping, and more. Bank repo. Offered at $163,500. For more photos and detail please visit 7780 Reenel Way, Sacramento, CA 95832.
New listing - 3729 Erlewine Circle, Sacramento, CA 95819
River Park home is ready for a new owner - this 3 bedroom, 2 bathroom, 1,307sf fixer is the perfect blank canvas for your personal touches and renovation. You will love the spacious layout, large living room with gas fireplace, formal dining room, central heat and air, HUGE .22ac lot on a cul-de-sac with a built-in pool, lots of sunny space to garden or play. Close proximity to the river parkway, baseball fields, parks, Caleb Greenwood Elementary, Sac State, and all East Sacramento has to offer. Don't wait! Probate sale. Offered at $325,000. For more photos and additional detail please visit 3729 Erlewine Circle, Sacramento, CA 95819.
New Listing - 1796 Mammoth Way, Sacramento, CA 95834
Stunning 3 bedrooms+loft, 3 bathrooms, 2,320sf former model home in Sonora Springs Natomas! You will love the spacious floor plan with every upgrade imaginable! Separate living and family rooms, gas fireplace, enormous open kitchen with island, granite counters and stainless steel appliances. Upstairs loft area, built-in home office cabinetry, master suite with dual sinks, separate tub and shower. Wood flooring, custom shutters and drapes plus designer features. Stamped concrete backyard patio with planter beds. Attached two-car garage. Homeowners Association has community built-in pool and recreation facilities, low dues at approximately $73/month. Close to shopping, schools and parks. Don't wait! Offered at $375,000. For more photos and a 3D virtual tour, please visit 1796 Mammoth Way, Sacramento, CA 95834
Call 811 before you dig!
I attended a presentation by a representative from PG&E in Sacramento earlier this week, and among other things he emphasized the importance of calling 811 before doing any digging or landscaping so that utility providers can visit your home and mark the locations of underground utility lines. Gas lines, water lines, electric lines, communication lines among other things are buried underground. PG&E frequently receives emergency calls when homeowners are digging and unexpectedly hit gas lines. Breaking a gas line can be very dangerous since gas is highly flammable and easily ignited. Be careful!
New Listing - 2760 63rd Street, Sacramento, CA 95817
Adorable updated 3 bedroom, 1 bathroom, 1,292sf Tahoe Park home! You will love the vintage charm coupled with newer amenities. Spacious layout, freshly refinished wood floors, recently painted interior and exterior, remodeled kitchen with granite counters and newer appliances, plus a formal dining area, and a remodeled bathroom. Lots of storage space. Enclosed breezeway offers extra space to entertain or play and connects to a large two-car garage. Located in close proximity to restaurants, breweries, UCDMC, K-12 schools, and Sac State. Offered at $399,000. Don't wait! For more photos and information visit 2760 63rd Street, Sacramento, CA 95817
New Listing - 2408 E Street, Rio Linda, CA 95673
Rio Linda 4 bedroom, 2 bathroom, 1,493sf home on one acre - this is the perfect blank canvas for your personal touches! You will love the spacious layout, living room with cozy gas fireplace, laminate flooring, dual pane windows, newer central heat and air, huge over-sized 2-car attached garage with long driveway and possible RV access. Large outbuilding for additional storage. HUGE front yard, and bigger rear yard with ample room for your creative endeavors. Don't wait! Offered at $339,000. For more photos and additional detail please visit 2408 E Street, Rio Linda, CA 95673.
New Listing - 1108 Vickrey Court, Rio Linda, CA 95673
Adorable 3 bedroom, 2 bathroom,  approx 1,281sf home on .89ac in Rio Linda is ready for your and your horses! You will love the spacious layout, remodeled kitchen with stainless appliances and granite counters, remodeled master bathroom with dual sinks, dual pane windows, central heat and air, tile flooring throughout, two-car garage and awesome covered deck for entertaining. The property has a pasture with lighting, 4-rail fencing, covered horse stalls with concrete floors. Located close to parks, schools, and riding trails. Don't wait! Offered at $399,000. For more photos and information visit 1108 Vickrey Court, Rio Linda, CA 95673
It's official - I have moved to Coldwell Banker!
I am super excited to let everyone know that this week I pulled the trigger and affiliated with Coldwell Banker. As of April 9th, 2018 I am a Broker Associate working out of their Sierra Oaks office at 2277 Fair Oaks Blvd in Sacramento. I will continue to serve neighborhoods in and around Sacramento, including Downtown / Midtown Sacramento, East Sacramento, Land Park, South Land Park, Hollywood Park, Curtis Park, Tahoe Park, Pocket / Greenhaven, Elk Grove, West Sacramento, Natomas, Arden, Carmichael, Rosemont, College Greens, Fair Oaks, Orangevale, Foothill Farms, Citrus Heights, Antelope, Roseville, Rocklin and Lincoln.

I did not just wake up last week and decide to pull the trigger and switch brokerages. This has been something I have contemplated for the last several months. Coldwell Banker is one of the largest real estate brokerages in the United States, and they have a significant market share in the greater Sacramento area. I am really excited to use their amazing technology and marketing tools that will allow me to better serve my buyer and seller clients.

Having spent nearly 8 years at my previous brokerage Dunnigan Realtors, I was truly truly sad to leave such great people. Some of my best friends on the planet are there and I will miss seeing them on a regular basis. I plan to go out of my way to maintain those relationships because many of them are very special to me.
Median Home Price in Sacramento County Increases to $370,000 in April 2018
The median home price in Sacramento County climbed last month to $370,000. The median had been relatively flat for the bulk of 2017 and early 2018. There is A LOT of buyer demand right now and not nearly enough homes on the market to satisfy the demand. If my own client activity is any indication of the greater market, my buyers are all in multiple offer scenarios, and my listings are receiving multiple offers. In April there was approximately 1.1 months of inventory -- which is not too different from this time last year.
City of Sacramento offering free leak repair services to qualified households
The City of Sacramento is offering free leak repair services to qualified households until March 31, 2018. This is a great opportunity to have a city contractor to investigate, repair or replace fixtures at no cost!

The program, called "Leak Free Sacramento" is available to those Sacramento home owners who meet the following criteria:
  • Live within a Disadvantage Area Community (here is a map);
  • Complete and submit the application (linked here);
  • Single family residential homeowners that are customers of Sacramento County Utilities;
  • Show irregular water usage, need leak detection and repair or replacement services;
  • Applicants must own both the home and the land (for example, mobile homes on rented land do not qualify); and 
  • Applicants must be the permanent resident of the home.
The program may be used to repair leaks and install water efficient fixtures. Residents can contact the program at 916-808-5605 or email leakfree@cityofsacramento.org. Do not wait! This program is available for a very limited time between March 19, 2018 - March 31, 2018.

New Listing - 137 Mike Gartrell Circle, Sacramento, CA 95835
Spacious single story 3 bedroom, 2 bathroom, 1,733sf home in Regency Park Natomas! You will love the custom interior paint, vaulted ceilings, lots of natural light and open feel, formal dining area, kitchen with stainless appliances, 5-burner gas stove and convection oven. Large master suite with walk-in closet, ensuite bathroom with double sinks, large sliding door leading to the backyard. Close to recreational bike trails, parks, restaurants, retail, freeways, and Sacramento International Airport. Don't wait! Offered at $375,000 subject to lender approval of short sale. For more photos and a virtual tour visit 137 Mike Gartrell Circle, Sacramento, CA 95835.
How to fill out a Short Sale Addendum
I have a new short sale listing coming on the market in the next few days, and it seems that over the last few years, other agents and buyers have forgotten how to do them. In the time period from 2007 - 2012 or so, it seemed like ALL my listings were short sales. I know them backward and forward, how different types of short sales work, how different mortgage companies and banks process them, and more. Short sales are not a huge part of our Sacramento real estate market anymore...but they are still out there.

So - here is a primer on how to fill out a Short Sale Addendum (C.A.R. Form SSA) and what it means to buyers and sellers.

First, this form must accompany any offer on a short sale listing. This document establishes that the property is being sold subject to the mortgage company's approval of a payoff for less than the amount owed, defines timelines and other parameters in conjunction with the Residential Purchase Agreement. Generally, the SSA discloses that there is no guarantee of approval, that the buyer and seller pay incur costs that are not recoverable in the event the mortgage company(ies) does not approve the transaction, and that the parties may want to obtain tax or legal advice. Aside from that, there are three fillable components that may change the dynamic of the short sale transaction that I want to cover.

Paragraph 1A: SHORT SALE APPROVAL - this timeline indicates the period in which the buyer is willing to wait for the mortgage company to provide written approval for the short sale. This timeline commences upon the seller's acceptance of the offer, and the buyer MUST wait during this timeframe for a response from the mortgage company. In other words -- the buyer CANNOT cancel prior to the timeline in this contract simply because the buyer gets tired of waiting. There may be other contingency timelines that permit cancellation before this period expires, but otherwise the buyer is in contract with the seller and is obligated to wait it out. For a seller of a short sale, you want this timeline to be as long as possible. As a short sale listing agent, I like to see a minimum of 60 days. Ideally the short sale will not take that long for mortgage company approval, however short sale timelines are a bit of a moving target.

Paragraph 2: TIME PERIODS - this indicates when the buyer's contractual contingency timelines will begin. Checking the box for "shall begin as specified in the agreement" is what I prefer as a listing agent. This means that buyer investigation contingencies, appraisal contingencies, loan contingencies, etc. all would begin once the seller accepts the offer (which is BEFORE the short sale mortgage company consents to the short sale). As a short sale listing agent, I want the buyer to conduct inspections, appraisal, loan underwriting, etc. right away. If this box is unchecked, then the buyer's timelines do not start until the mortgage company has issued short sale approval. The sooner the buyer removes contingencies, the better. If timelines do not start upon seller acceptance, then it is possible for the buyer to walk away after we have short sale approval. We do not want to get several months into a short sale and lose the buyer over something relating to condition of the home. If a buyer cancels we want that to happen early so we do not have to take too many steps backward before moving forward again.

Paragraph 3: BUYER'S DEPOSIT CHECK - this indicates when the buyer's initial deposit should be held in escrow. Checking that box for "as specified in the agreement" is what we want to see. This means that within 3 business days of seller acceptance, the buyer's initial deposit is held in escrow (which again is BEFORE the short sale mortgage company consents to the short sale). As a listing agent, I want to see this for a few reasons. One, if the buyer is willing to do this, it indicates they are serious buyers! Two, if the buyer gets sick of waiting and wants to move on, they will want their deposit back. If escrow is not holding a deposit, the buyer can move on and simply never tell us. That would be bad. Three, holding the buyer's deposit upon seller acceptance looks fantastic to the short sale mortgage company. Four, if the buyer removed contingencies (as we discussed in paragraph 2) and then decide before the timeline in paragraph 1A is over, then the seller may have the right to retain the deposit.

Not all buyers of short sales are willing to do all three of these things I recommend. In non-competitive situations, many buyers will not agree to do all of these things...in multiple-offer situations, often buyers will agree. It is all negotiable. Hope that helps!
New Listing - 6308 & 6310 Blackstar Drive, Citrus Heights, CA 95621
Excellent real estate investment opportunity with this well-maintained Citrus Heights duplex. Convenient and high-demand location. This property is a 2 bedroom/1 bathroom/1-car garage and a larger 2 bedroom/2 bathroom/1-car garage duplex. Spacious units flow nicely with lots of living space, open layouts, big bedrooms, ample storage, and private backyards. 6308 has brand new flooring and fresh paint. Reports, income/expenses, and maintenance records available. Located near shopping, public transportation, parks, schools, and I-80. Offered at $345,000. For more photos and detail, please visit 6308-6310 Blackstar Drive, Citrus Heights, CA 95621.
New flooring and fresh paint can be a huge improvement and help maximize your selling price when preparing a home for sale...
Often, I list property for clients where the home has been occupied for many years and then is vacated before the listing goes on the market. Perhaps the seller purchased another home first, moved out, and then listed the home. Or in other scenarios, the property was occupied by tenants who did not leave the home in stellar condition. Whatever the case, sometimes after a long term occupant, a vacant home will not look or smell its best.

Case in point: in an upcoming investment property listing, the tenants vacated the property after living there 8 years. I viewed the property while the tenants were still living there and thought to myself that once they moved out the unit would probably just need a deep cleaning and would ready for market. It became clear after they moved out though, that the unit needed more than a deep cleaning. Their possessions masked the rips and stains in the carpet, and there was a distinct pet odor that remained. Also, after 8 years the white walls were really dingy. 

My sellers live out of the area, so I met my go-to contractor at the home and he bid replacing the flooring and repainting the interior, among a few other repairs. The before and after differences are amazing! The unit is now ready for occupancy, whether by a new owner occupant or new tenant. 

It does not always make sense to make improvements to a home before listing it though...depending on numerous variables, such as the target buyer for the property, overall condition of the home, the location of the property, and overall market conditions, a seller might be better off selling the property in its current condition. I of course help advise my clients accordingly. It is my goal to maximize the return on any pre-sale repairs or improvements, and sometimes that means it does not make sense to do much, if anything. Or, as in this case, spending some money up-front should yield a three-fold return on the investment with a much higher selling price
New Listing - 2616 Cleat Lane, Sacramento, CA 95818
Popular, sold-out floorplan in The Mill at Broadway is available! 2 bedrooms + den, 2.5 bathrooms, 1,451sf detached home in cool newer Land Park community! You will love the kitchen with quartz counters, stainless appliances, built-in wine fridge and bar area, high-end laminate flooring, stylish light fixtures, downstairs den or possible 3rd bedroom, upstairs loft, both bedrooms have ensuite bathrooms. Energy saving features include 1.5kW owned photovoltaic solar system, tankless water heater, ductless HVAC. 2-car attached garage, big patio and large upper balcony. HOA dues $90/month. Newer construction from 2016 within close proximity to Land Park, Broadway District, Bike Dog Brewing, Selland's, transportation and more! Offered at $469,900. For more photos and information visit 2616 Cleat Lane, Sacramento, CA 95818. Don't wait!
Do you have a home for these buyers?
It's January in Sacramento. And it is that wonderful time of the year when home buyers decide to jump-start their home searches, and sellers start to prep their homes for sale...the perfect storm when buyers are ready to go, but there is very little housing inventory on the market for buyers to choose from. Which brings me to today's post...do you have a home that you would like to sell that my buyers would like to buy? I am working with some really well-qualified (pre-approved!), amazing people...

Buyer A
Seeking a home in the Arden/Arcade or Carmichael areas. Ideally 4 bedrooms (3 bedrooms could also work if there is a separate living and family room, or home office space), 2 or more bathrooms, and 1,800sf or more. Energy efficient features are a plus. A swimming pool would be a huge plus, though not a must have. They would also like a home with good southern exposure to add solar (or could assume an existing solar lease). They are pre-approved for up to $540,000.

Buyer B
Seeking a home in the Citrus Heights, Fair Oaks, or Orangevale areas. Ideally 3 bedrooms, 2 bathrooms, and 1,400sf or more. They would like a decent-sized yard and are not afraid of something that is dated or needs a little cosmetic TLC. They are pre-approved up to $300,000.

Buyer C
Seeking a condo in the Pocket/Greenhaven, Elk Grove, or South Sacramento areas. Ideally 2 bedrooms, 1 or more bathrooms, and 900sf or more. They would prefer an attached or detached garage, but covered parking is also ok. They are pre-approved up to $180,000.

Buyer D
Seeking a home in the East Sacramento, Land Park, Elmhurst, or Midtown Sacramento areas. They would prefer something with architectural character. They would love a 3 bedroom home, but would be ok with a 2 bedroom home. They would love a second bathroom too but realize that's a tall order. Off street parking is a must, and a garage is a huge plus. They are pre-approved up to $460,000.

So anyway, if you own a home something like what I have described here, drop me a line at erin@erinstumpf.com or 916-342-1372! My buyers would love to hear about it.


What does the new Tax Reform Bill mean for home buyers, sellers, and homeowners?
A few weeks ago, right around Christmas and just before the end of the year, the president signed the final version of the Tax Cuts and Jobs Act of 2017. The legislation -- two separate bills -- was advanced in both the United States House of Representatives and the United States Senate pretty quickly, then elements of the two bills were blended together (via a process known as "conference"), resulting in a final bill...

Regarding tax implications for homeowners, several items were on the table for pretty significant changes in both bills. And for a while it was difficult to determine what actually made it into the final bill that was signed into law.

Now that the chips have landed -- here is a summary of what is in the final bill that will affect residential home buyers, home sellers, and homeowners.

Capital Gains Exemption on the Sale of a Primary Residence
The good news here for sellers is the final bill had NO CHANGE. For as long as I can remember, the law has been that up to $250,000 (for individuals) or $500,000 (for married couples) of  the gain (aka profit) from the sale of a primary residence is exempt from capital gains tax, provided that you have lived in the home for at least 2 out of the last 5 years. Both of the original House and Senate bills sought to change this timeline for exemption to 5 out of the last 8 years. This would have placed a huge hardship on many homeowners. Life happens, and many people look to sell and move into larger homes, downsize, or relocate after a short time in a home...so thankfully that change was not part of the final bill, and homeowners can still sell and take their equity with them, untaxed to those amounts, after 2 years.

Mortgage Interest Deductibility for Primary Residences
The good news here is that the final bill only capped tax write-off for mortgage interest at loan amounts of $750,000 or less. The original House bill sought to cap the mortgage interest deduction at loan amounts of $500,000 or less (in fact you may recall I made an appearance on the KCRA News when the original bill was announced). Overall this is still a reduction from the $1,000,000 cap that had been in place for as long as I can remember...though at $750,000 that will not affect too many people purchasing homes in the greater Sacramento region. Our current median home price in Sacramento County is in the mid-$300k range. For those with pre-existing home loans between $750,000 - $1,000,000 -- you are grandfathered in and may still write-off that mortgage interest. Also of note is that interest on home equity lines of credit (HELOCs) is no longer deductible, however it is still deductible on home equity loans (aka, second mortgages). Clear as mud, yes?

Mortgage Interest Deductibility for Second Homes
The good news here is that the final bill did not eliminate the mortgage interest deduction for second homes! The original House bill would have completely eliminated the mortgage interest deduction for second homes (aka vacation homes).

So that is enough information to use as a guideline. The National Association of Realtors also published a detailed Q&A which you can refer to here. Please be sure to confer with your CPA to determine how these things apply specifically to your situation.