Tuesday, February 28, 2012
Question for Sellers selling Real Estate in current market
http://www.kcmblog.com/2012/02/28/is-it-the-price-of-your-home-or-the-price-of-your-happiness/
Monday, February 27, 2012
Is the bank responsible for issues that come up after settlement on foreclosed homes
Below is an example of what may happen if you buy a foreclosure.
Buyer: We bought a foreclosed home, as is, from a bank. When we removed the old carpet, we found large cracks in the slab, leading to costly foundation problems. The contractor who repaired the foundation found evidence of previous foundation repairs that were done incorrectly.
We searched the county records and found that this older work had been done without a permit. Is the bank that sold us the properly liable for not disclosing this problem?
Answer: Banks are exempt from disclosure laws because, in most cases, they are unfamiliar with the homes they acquire through foreclosure.
If you had bought the home from a private party, that person might have had knowledge of the substandard foundation repairs and would have been required to provide disclosure. In your case, the bank was probably unaware of the problem and could not have provided disclosure.
Unfortunately, some banks take advantage of the disclosure loophole by avoiding information that they might have to disclose. For example, if you had hired a home inspector and had then decided not to buy the property, the bank would probably not have requested a copy of the report.
Without having seen the report, the bank could maintain plausible deniability with other buyers.
Buyer: We bought a foreclosed home, as is, from a bank. When we removed the old carpet, we found large cracks in the slab, leading to costly foundation problems. The contractor who repaired the foundation found evidence of previous foundation repairs that were done incorrectly.
We searched the county records and found that this older work had been done without a permit. Is the bank that sold us the properly liable for not disclosing this problem?
Answer: Banks are exempt from disclosure laws because, in most cases, they are unfamiliar with the homes they acquire through foreclosure.
If you had bought the home from a private party, that person might have had knowledge of the substandard foundation repairs and would have been required to provide disclosure. In your case, the bank was probably unaware of the problem and could not have provided disclosure.
Unfortunately, some banks take advantage of the disclosure loophole by avoiding information that they might have to disclose. For example, if you had hired a home inspector and had then decided not to buy the property, the bank would probably not have requested a copy of the report.
Without having seen the report, the bank could maintain plausible deniability with other buyers.
Thursday, February 23, 2012
Housing market shows signs of turnaround
http://www.csmonitor.com/Business/2012/0222/Housing-market-showing-signs-of-turnaround
Building permits and final inspection for buyers and sellers
Not only is it a good idea for buyers to check the permit history on a home before they buy, but sellers are wise to check the permit history on their homes before putting them on the market. This way, they can correct any permit issues before the listing goes public.
Homeowners often assume when they hire a contractor to do work that requires permits that the contractor will take responsibility for this. This may not happen, particularly if it is not specified in the work authorization contract.
Sometimes there is mis-communication between a contractor and the homeowner. One thinks the other is going to call for a final inspection and meet the inspector, but neither does. It's a good idea to follow up on this because it will cost more renewing a permit if it expires before the final inspection is done.
Another issue that can create problems is work done without building permits that adds living space to a home. In most cases, due to changes in mortgage lender requirements, appraisers can't count unpermitted work as livable square feet, even though it is used as such by the current homeowners.
In older neighborhoods, there are often homes where an attic or basement has been converted to add living space. Until recently, if the work was done professionally by a contractor, the appraiser could usually count it as usable square feet. Today, underwriters may require copies of permits for all work that adds square footage in addition to what shows in the public record.
The public record on a property is not always accurate. For example, an addition that was done with permits may not show up in the public record. In this case, the error should be corrected before the home goes on the market. Your real estate agent or assessor's office should be able to help you with this.
Many homes have been renovated without the benefit of building permits and final inspections. In today's real estate market, this could have an effect on value.
Even so, the last thing a seller should do is make representations that can't be substantiated. Sellers who had work done without a permit should let the buyer know, in writing.
Homeowners often assume when they hire a contractor to do work that requires permits that the contractor will take responsibility for this. This may not happen, particularly if it is not specified in the work authorization contract.
Sometimes there is mis-communication between a contractor and the homeowner. One thinks the other is going to call for a final inspection and meet the inspector, but neither does. It's a good idea to follow up on this because it will cost more renewing a permit if it expires before the final inspection is done.
Another issue that can create problems is work done without building permits that adds living space to a home. In most cases, due to changes in mortgage lender requirements, appraisers can't count unpermitted work as livable square feet, even though it is used as such by the current homeowners.
In older neighborhoods, there are often homes where an attic or basement has been converted to add living space. Until recently, if the work was done professionally by a contractor, the appraiser could usually count it as usable square feet. Today, underwriters may require copies of permits for all work that adds square footage in addition to what shows in the public record.
The public record on a property is not always accurate. For example, an addition that was done with permits may not show up in the public record. In this case, the error should be corrected before the home goes on the market. Your real estate agent or assessor's office should be able to help you with this.
Many homes have been renovated without the benefit of building permits and final inspections. In today's real estate market, this could have an effect on value.
Even so, the last thing a seller should do is make representations that can't be substantiated. Sellers who had work done without a permit should let the buyer know, in writing.
Wednesday, February 22, 2012
Tuesday, February 21, 2012
Wednesday, February 15, 2012
Tips for Selling your home in Today's market
Some homeowners have been waiting for years for a better housing market and a good time to sell. Is it better to wait a few more years and see if you can get a higher sale price, or sell now and just move on?
The motivation for selling is the big question. Are you commuting to work several hours a day and the commute is just too long? Are your children grown and your home is too big, in addition to being a burden to maintain or it it too small? Are you moving out of the area for job transfer? Can you no longer make the payments? Do you no longer want to pay the price it costs to own and maintain a your home?
These are all good reasons to consider moving. Not only do current market conditions enter into the equation, but making a move like this is usually more complicated than it was the first time you bought a home.First, you need to find out the probable sale price of your home and access the state of the current home-sale market in your area. You also need to know what you can do to maximize the saleability of your home. Then you should consider where you'll live next and how much that will cost.
If you don't already have one, find an experienced real estate agent who specializes in your area. Friends whose opinion you trust are the best source of agent referrals. Meet with your agent at your home and ask for a comparative market analysis. This will help you figure out what you may be able to net from the sale of your home in the current market.
You'll also want to know how long you can expect it to take to sell your home. How many homes like yours have sold recently? Are homes like yours in high demand? Or, is it located in a less desirable area that could mean a longer marketing time and, perhaps, a lower price than you were expecting?
Ask your agent to walk through your home with you and point out what should be done to make your home marketable. Homes that sell today are priced right for the market and are in move-in condition.
You want to make cost-effective improvements. If the kitchen and bathrooms are outdated, consider a cosmetic redo. Update paint, hardware, light fixtures and floor coverings, if necessary. Don't do a complete remodel unless you plan to stay in your home for years; otherwise, you won't recoup your investment.
Deciding where to move -- and when -- can be difficult. Some buyers can afford to buy a new home before selling, and prefer to make the move that way. Most repeat buyers can't afford to buy first. Others who can won't buy first due to market uncertainty and the stress of owning two homes at once.
The most prudent approach to making a move from one home to another is to sell first and rent if necessary until you find the right home to buy. By selling first, you will know exactly how much money you have to apply to a new home. Today's housing market is volatile. A dip in the market could shave tens of thousands of dollars, or more, off your selling price.
The other benefit of renting before buying is that you're under no pressure to buy the first listing you see. Interest rates are low and are expected to stay low through 2012. Prices are also low and aren't expected to move up much for the next several years.
The motivation for selling is the big question. Are you commuting to work several hours a day and the commute is just too long? Are your children grown and your home is too big, in addition to being a burden to maintain or it it too small? Are you moving out of the area for job transfer? Can you no longer make the payments? Do you no longer want to pay the price it costs to own and maintain a your home?
These are all good reasons to consider moving. Not only do current market conditions enter into the equation, but making a move like this is usually more complicated than it was the first time you bought a home.First, you need to find out the probable sale price of your home and access the state of the current home-sale market in your area. You also need to know what you can do to maximize the saleability of your home. Then you should consider where you'll live next and how much that will cost.
If you don't already have one, find an experienced real estate agent who specializes in your area. Friends whose opinion you trust are the best source of agent referrals. Meet with your agent at your home and ask for a comparative market analysis. This will help you figure out what you may be able to net from the sale of your home in the current market.
You'll also want to know how long you can expect it to take to sell your home. How many homes like yours have sold recently? Are homes like yours in high demand? Or, is it located in a less desirable area that could mean a longer marketing time and, perhaps, a lower price than you were expecting?
Ask your agent to walk through your home with you and point out what should be done to make your home marketable. Homes that sell today are priced right for the market and are in move-in condition.
You want to make cost-effective improvements. If the kitchen and bathrooms are outdated, consider a cosmetic redo. Update paint, hardware, light fixtures and floor coverings, if necessary. Don't do a complete remodel unless you plan to stay in your home for years; otherwise, you won't recoup your investment.
Deciding where to move -- and when -- can be difficult. Some buyers can afford to buy a new home before selling, and prefer to make the move that way. Most repeat buyers can't afford to buy first. Others who can won't buy first due to market uncertainty and the stress of owning two homes at once.
The most prudent approach to making a move from one home to another is to sell first and rent if necessary until you find the right home to buy. By selling first, you will know exactly how much money you have to apply to a new home. Today's housing market is volatile. A dip in the market could shave tens of thousands of dollars, or more, off your selling price.
The other benefit of renting before buying is that you're under no pressure to buy the first listing you see. Interest rates are low and are expected to stay low through 2012. Prices are also low and aren't expected to move up much for the next several years.
Saturday, February 11, 2012
Buying a home without representation
Should we use an Agent to Buy a home?
When they first begin looking for a home, many buyers ask "can't we do this on our own? Do we really need to use a Real Estate Agent?" The answer is yes, you can do it on your own. There is no law that prevents you, as an individual, from buying property without professional Real Estate assistance. You can search for homes, arrange showings, and even negotiate on your own (although, in some localities, the actual contract for purchase will need to be drawn up by an Attorney). The real question may be "do we want to do it on our own?"
There is a misconception among many first time home buyers that by using a Real Estate Agent, they will be subject to paying a commission. In virtually all situations, this is not the case. The commission for the sale of a home is paid for by the seller, not the buyer. If you went to your local appliance store and bought a new refrigerator, you wouldn't expect to pay a commission to the salesperson. The same applies when you buy a house--it is the seller of the item (in this case a house) that is responsible for paying to have it sold.
If you do decide to "go it on your own," your choices will obviously be very limited. The only homes that you can buy without any Agent assistance are those that are "For Sale By Owner" (FSBO)--generally a small percentage of the market. These are home owners who, for whatever reason, have decided not to use an Agent in the sale of their house. It may be because they think they can get more return by not paying a commission, or it may be because there was no Agent who would take their house listing at the price they demanded. Many Real Estate analysts have found that the selling prices of FSBO homes are equal to--or higher--than those listed by Agents. A problem arises when, as a "do-it-yourself" house buyer and without the benefit of a Comparative Market Analysis, you need to make a determination whether or not the house is worth the asking price. How do you decide? There is too much money potentially involved to make a "seat of the pants" decision. In this case, you will need to either secure an independent appraisal to determine a realistic price range for the property or develop your own determination of value.
The next mistake that many buyers make, when they find that their choices are so limited by only dealing with homes for sale by owners, is to jump into the "listed" market by checking advertisements and calling Listing Agents directly or visiting Open Houses. There is not a dime to be saved with this strategy (the seller is still going to pay a commission) and you run the risk of ending up with no representation, since the Listing Agent is duty bound to represent the seller.
When they first begin looking for a home, many buyers ask "can't we do this on our own? Do we really need to use a Real Estate Agent?" The answer is yes, you can do it on your own. There is no law that prevents you, as an individual, from buying property without professional Real Estate assistance. You can search for homes, arrange showings, and even negotiate on your own (although, in some localities, the actual contract for purchase will need to be drawn up by an Attorney). The real question may be "do we want to do it on our own?"
There is a misconception among many first time home buyers that by using a Real Estate Agent, they will be subject to paying a commission. In virtually all situations, this is not the case. The commission for the sale of a home is paid for by the seller, not the buyer. If you went to your local appliance store and bought a new refrigerator, you wouldn't expect to pay a commission to the salesperson. The same applies when you buy a house--it is the seller of the item (in this case a house) that is responsible for paying to have it sold.
If you do decide to "go it on your own," your choices will obviously be very limited. The only homes that you can buy without any Agent assistance are those that are "For Sale By Owner" (FSBO)--generally a small percentage of the market. These are home owners who, for whatever reason, have decided not to use an Agent in the sale of their house. It may be because they think they can get more return by not paying a commission, or it may be because there was no Agent who would take their house listing at the price they demanded. Many Real Estate analysts have found that the selling prices of FSBO homes are equal to--or higher--than those listed by Agents. A problem arises when, as a "do-it-yourself" house buyer and without the benefit of a Comparative Market Analysis, you need to make a determination whether or not the house is worth the asking price. How do you decide? There is too much money potentially involved to make a "seat of the pants" decision. In this case, you will need to either secure an independent appraisal to determine a realistic price range for the property or develop your own determination of value.
The next mistake that many buyers make, when they find that their choices are so limited by only dealing with homes for sale by owners, is to jump into the "listed" market by checking advertisements and calling Listing Agents directly or visiting Open Houses. There is not a dime to be saved with this strategy (the seller is still going to pay a commission) and you run the risk of ending up with no representation, since the Listing Agent is duty bound to represent the seller.
Monday, February 6, 2012
Has the housing market a stablized?
The CEOs of some of the nation's biggest home building companies said Thursday that they feel the housing market has stabilized.
But they were careful not to be overly optimistic even with the spring home-selling season coming up. A year ago many housing experts forecast housing would begin recovering in 2011, only to see it play out as the worst year for new home sales on records going back a half-century.
Executives at Pulte Group Inc., MDC Holdings Inc., M/I Homes Inc. and Beazer Homes USA Inc. weighed in on the housing market after their companies reported financial results for October to December.
In that period, sales of new homes rose nationally as builders slashed prices to compete with sales of previously occupied homes, including many that had been foreclosed.
Beazer's and M/I's sales and new orders rose sharply in the quarter, while trends were mixed for Pulte Group and MDC Holdings.
Only Pulte Group ended the quarter with a smaller backlog of homes under contract than a year earlier, and its backlog fell less than 2 percent. Backlog is an indicator of potential home deliveries and revenue for home builders.
So the increases bode well for the spring. But executives were cagey about forecasts.
Pulte Group President and CEO Richard Dugas said it's still too early to get a read on whether spring will be a boon or a bust — though he was pleased with business activity in January and said sales representatives in the field were positive.
But they were careful not to be overly optimistic even with the spring home-selling season coming up. A year ago many housing experts forecast housing would begin recovering in 2011, only to see it play out as the worst year for new home sales on records going back a half-century.
Executives at Pulte Group Inc., MDC Holdings Inc., M/I Homes Inc. and Beazer Homes USA Inc. weighed in on the housing market after their companies reported financial results for October to December.
In that period, sales of new homes rose nationally as builders slashed prices to compete with sales of previously occupied homes, including many that had been foreclosed.
Beazer's and M/I's sales and new orders rose sharply in the quarter, while trends were mixed for Pulte Group and MDC Holdings.
Only Pulte Group ended the quarter with a smaller backlog of homes under contract than a year earlier, and its backlog fell less than 2 percent. Backlog is an indicator of potential home deliveries and revenue for home builders.
So the increases bode well for the spring. But executives were cagey about forecasts.
Pulte Group President and CEO Richard Dugas said it's still too early to get a read on whether spring will be a boon or a bust — though he was pleased with business activity in January and said sales representatives in the field were positive.
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