My mother’s will says her boyfriend can live in her home after she dies. Can I still kick him out if the deed is transferred to me?


Dear Moneyist,

My mother currently owns a beautiful home in Virginia Beach that is paid for; she inherited a very sizable number of assets from her late husband. In her will, she would like to leave the house to me, but has stipulated that her boyfriend can remain in the house indefinitely, although he will have to pay utilities. The will also stipulates that he cannot have another woman living in the house.

This puts me in a sticky spot, as I have no emotional or legal ties to this man. She has known him for less than four years, and they met out of loneliness. Bottom line: I would like to keep this home in the family, but I do not want to deal with removing her boyfriend from the home. Would I have the right to remove him from the home if the deed is transferred to me?

Unhappy Daughter

Dear Daughter,

Before I answer your question: People often meet out of loneliness. Romance is a better reason to fall in love than, say, finance. Isn’t it a nice thing that your mother has found happiness with this man? If they enjoy each other’s company, make each other laugh, luxuriate in the companionship their partnership affords them, travel the world, or just snuggle up at home, what’s not to like?

Here are your options: You can take your chances that she manages her estate properly and you eventually inherit the house. There are three outcomes to that: 1. Her boyfriend lives out his life there, and you inherit her home after that. 2. She inadvertently leaves him the house by putting him on the deed, and you inherit nothing. Or 3. She messes up her will, and you kick him out.

The Moneyist: I filed a joint tax return with my estranged wife because she is a gambler and her finances are a mess. But I got NO stimulus check — what can I do?

Alternatively, you could recommend a good estate attorney, tell her you are happy that she is happy, and assure her that you will do your best to ensure she need not worry about what will happen to her boyfriend after she’s gone. Assuming she then managers her estate according to her wishes, there is one outcome: Her boyfriend lives there, and you inherit her home after he dies or moves out.

For that last option, she would likely set up a life estate deed, putting her house in a trust to avoid probate, and make stipulations in the will that you receive it after her boyfriend decides to leave or he dies, whichever comes first. The Drucker Law Offices in Beverly Hills, Calif. says this is eminently doable, but should be water tight as life estate deeds can have unforeseen complications.

Among them, according to The Drucker Law Offices: There may be unexpected gift taxes if your mother’s boyfriend terminated the life estate prior to his death, financial problems could arise if he failed to maintain the home, and it could lead to a reassessment of the property for property tax purposes; however, they could get married or file registered domestic partners to avoid that.

The Moneyist: I didn’t get my stimulus check because I owe back child support. It’s not fair. My stepchildren rely on me — what can I do?

Your mother could also transfer an interest in the property to her boyfriend for a term that is less than 35 years. “There is an exemption from the reassessment rules for property tax purposes where the transfer of the interest in California real estate is for a term that is less than 35 years,” The Drucker Law Offices added. Estate law, of course, will vary depending on the state where your mother lives.

Four years together is better than four months or four weeks or four days. Your mother knows this man well enough, and holds him in high enough esteem to ensure he has somewhere to live should she predecease him. You don’t have to like him or be his best friend, or invite him over for supper if he does outlive your mother. But it would be nice if you did decide to respect her wishes.



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Home Buying Boom Boosts Zillow’s Fortunes to a Record By Investing.com


© Reuters.

By Christiana Sciaudone

Investing.com —  Zillow Group Inc (NASDAQ:) bounced to a record as Americans went shopping for new homes in the pandemic.

Shares of the real estate listings company jumped 17% Friday after it reported revenue rose 28% to $768 million, compared to the average analyst forecast of $619 million. The loss per share of 15 cents compares to the expected loss of 48 cents. The shares gave back some of the gains to close up 11.5%, at $79.78.

Traffic to Zillow Group’s mobile apps and websites reached a record 218 million average monthly unique users, an increase of 12% year over year, driving 2.5 billion visits during the quarter, the company said in a statement. Zillow ended the quarter with the highest cash balance in its history, growing cash and investments to $3.5 billion from $2.6 billion at the end of the first quarter. 

Shares have eight buy ratings, nine holds and one sell, with an average price target of $65.25, analyst tracked by Investing.com say. The stock has more than doubled since March.

 

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My boyfriend is buying a house and does not want me to have equity. I’m moving in with him and selling my home — what should I do with the proceeds?


Dear Moneyist,

My boyfriend and I are planning on moving in together. We each have one child and are planning on one more together. There is a large income disparity (in his favor). He is purchasing the home, and does not wish for me to have equity in the house. I completely understand his reasons and have no desire to fight him on that. I will be selling my current home to move with him.

The Moneyist: ‘I’m having a hard time understanding how earning over $200,000 a year is too much to qualify for a decent stimulus check’

What is the best way for me to contribute to our new life together, while also making sure that I have an investment for myself later should I need to purchase my own home, or something for my child(ren) to inherit after I am gone? I don’t want to help pay the mortgage if I’m not receiving equity. I’m more than happy to pay for other things.

With no home equity, I will not be building savings in that way. Does it make sense to take my current home profits after the sale and put it in a separate money making account for the future? We both love each other and are comfortable with this arrangement, I just want to be sure that I am also protecting myself just as he is, while also helping to contribute to our new household.

Anonymous

Dear Anonymous,

You are asking the wrong question.

Your letter stopped me in my tracks here: “I will be selling my current home to move with him.” Stop. Don’t sell this home unless you absolutely have to, and I see no reason in your letter why you should sell to move in with a man who does not wish to buy a home together, especially given that you are planning to have children together. It’s a red flag.

The Moneyist: I filed a joint tax return with my estranged wife because she is a gambler and her finances are a mess. But I got NO stimulus check — what can I do?

I’ll leave the relationship to you, but I urge you not to give up your financial independence and your home. If this relationship does not work out and you sell your home, you will be in a tricky situation and you will rue the day you ever sold it. If you do stay together, you and your children will be living in his home. That’s not a good outcome for you or your child.

Assuming you keep your home and have a tenant, it’s fair for you to pay a set amount every month toward rent in your boyfriend’s home, but if that feels weird or creates a low status/high status situation in your relationship, or doesn’t feel right to you, listen to your gut. It will be your best guide on how to proceed. Don’t move in if something feels wrong about this.

The Moneyist: I didn’t get my stimulus check because I owe back child support. It’s not fair. My stepchildren rely on me — what can I do?

You can email The Moneyist with any financial and ethical questions related to coronavirus at qfottrell@marketwatch.com. Want to read more?Follow Quentin Fottrell on Twitterand read more of his columns here.

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New Home Sales Up 13.8% In June, Beats Forecast


By Jill Mislinski

This morning’s (July 24) release of the June New Home Sales from the Census Bureau came in at 776K, up 13.8% month-over-month from a revised 682K in May. Investing.com forecasted a 4.0% increase.

Here is the opening from the report:

Statement Regarding COVID‐19 Impact: Due to recent events surrounding COVID-19, many governments and businesses are operating on a limited capacity or have ceased operations completely. The Census Bureau has monitored response and data quality and determined estimates in this release meet publication standards. For more information on the compilation of this month’s report, see .

New Home Sales

Sales of new single-family houses in June 2020 were at a seasonally adjusted annual rate of 776,000, according to estimates released jointly today by the U.S. Census Bureau and the Department of Housing and Urban Development. This is 13.8 percent (±17.8 percent)* above the revised May rate of 682,000 and is 6.9 percent (±13.7 percent)* above the June 2019 estimate of 726,000.

Sales Price

The median sales price of new houses sold in June 2020 was $329,200. The average sales price was $384,700. [Full Report]

For a longer-term perspective, here is a snapshot of the data series, which is produced in conjunction with the Department of Housing and Urban Development. The data since January 1963 is available in the St. Louis Fed’s FRED repository here. We’ve included a six-month moving average to highlight the trend in this highly volatile series.

Over this time frame, we see the steady rise in new home sales following the 1990 recession and the acceleration in sales during the real estate bubble that peaked in 2005.

The Population-Adjusted Reality

Now, let’s examine the data with a simple population adjustment. The Census Bureau’s mid-month population estimates show a 75.4% increase in the US population since 1963. Here is a chart of new home sales as a percent of the population.

Population Adjusted

New single-family home sales are 31.3% above the 1963 start of this data series. The population-adjusted version is 25.2% below the first 1963 sales and at a level similar to the lows we saw during the double-dip recession in the early 1980s, a time when 30-year mortgage rates peaked at 18.63%. Today’s 30-year rate is about 3.01%.

For another perspective, here is a chart of the median new home sale prices back to 1963, inflation-adjusted. The data source is also the Census Bureau and can be found on the press release and website above. For inflation adjustment, we use the CPI-U, which is the Consumer Price Index for All Urban Consumers. We’ve included a 6-month moving average for this extremely volatile metric to give us a clearer sense of the trend.

Here’s a zoomed-in look since 2000.

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Editor’s Note: The summary bullets for this article were chosen by Seeking Alpha editors.





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K12 Set to Boom Amid Virtual Schooling as Covid Keeps Us Home By Investing.com



By Christiana Sciaudone

Investing.com — K12 (NYSE:) Inc. runs online public schools and, accordingly, business is booming.

“The growth in enrollments that we’re seeing is shocking even to us,” Chief Executive Officer Nathaniel Davis said in a Zoom interview with Investing.com this week. 

Covid-19 stay-at-home mandates and school closures have forced parents to seek out alternatives to traditional in-person school, boosting K12’s fortunes. The company gets the lion’s share of its revenue from operating virtual public schools, with the first quarter bringing in $228,335 for the segment out of a total $257,154. Investors are seeing the same opportunity, tripling K12’s share price this year. 

“They are in the right place at the right time,” said Jeff Silber, an analyst at BMO Capital Markets who has a buy rating on K12. “This is likely to be the best year in company history.”

K12 is a 20-year-old venture, and operates more than 70 schools in 35 states, with an enrollment of 122,800 as of fall 2019. It also provides the curriculum and services necessary for public and private schools to set up their own customized full-time and part-time online programs, and for supplemental online and blended education. In total, K12 works with 6,000 teachers, of which approximately 2,000 are K12 employees. That will grow this year, with plans to hire as many as 1,300 teachers.

Visits to the website are up 90% from February through now, and applications are up 60%, Davis said. The company is poised to announce a major deal with one of the country’s largest school districts, for which it will provide software and services. Local teachers will remain.

K12 is targeting expansion in big markets like New York and New Jersey, and will continue opening schools in states where it already operates. 

“Based on the kinda applications we are seeing, the estimates in the marketplace are modest,” Davis said. 

Online school is still a limited market, however, Silber said. While there are more than 50 million students in U.S. public schools, not everyone can adjust well to the virtual environment. In 2017-18, 298,000 students were enrolled in full-time virtual schools, Silber said, citing the most recent information available from the National Education Policy Center. It’s a tiny niche, he said. Even if it doubled, 99% of students would still be enrolled in regular schools.  

Pearson’s Connections Academy is K12’s biggest peer, and it also reported strong revenue growth, with applications up 61% in the first half compared to 2019. Pearson said in its half-year results statement on July 24 that it is increasing capacity in existing schools and seeing interest from states that haven’t yet initiated virtual schooling. In the upcoming school year, Connections will have 32 partner schools in 29 states.           

While the short-term looks positive, long-term growth will come from K12’s career readiness segment, Davis said. While K-12 education is a market estimated to be worth $11 billion, the potential market for career readiness totals almost $100 billion, according to a K12 presentation.

In January, K12 bought career readiness company Galvanize Inc. for $165 million in a cash deal. The acquisition of Galvanize positions K12 as a provider of career readiness education services, including skills training, technology staffing and developing talent and capabilities for Fortune 500 companies.

Davis recounted a recent management meeting with four big corporations, and their frustration at finding qualified talent. 

“Half the jobs they are going to fill don’t require college education, but they do need skills,” Davis said. “The corporations are all telling us ‘I care more about skills than I do about degrees.’”

Companies want employees who can get to work on time, be organized, handle spreadsheets, and perform other tasks. Those things aren’t being taught in college, though some are adapting, Davis said. With the coronavirus sending kids home, families are starting to question the tens of thousands of dollars they are spending on traditional college experiences.

“A liberal arts education may not help you get a job,” Davis said.  

Among the strategies in building a successful company is, evidently, finding the right people. While diversity is on everyone’s mind of late, Davis has made it a priority since he took charge in 2013. White men are outnumbered on K12’s management team and the board of directors, which includes African-Americans, Asians and Hispanics.

“I am a person who has benefited from people giving me a chance. I want to give others a chance,” Davis said. Candidates, including for the board of directors, have to be qualified, but Davis keeps an open mind in terms of experience and exact skills. Even if they have never served on a board, they will have something else to contribute. “You have to be committed to it and you open your mind up to the other skills of individuals.”

A recent example of the difference diversity brings to the board came after a look at the mix of students showed a dearth of Latinos. Two Hispanic board members were consulted, and they reached out through their contacts to help the company reach Latino families. As a result, K12 saw a jump in the number of Latino students enrolled.

“It comes from the top,” Davis said. “It’s how you set the tone.”





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