Posts Tagged ‘Van Purser and Associates’

Real Estate Perspective for 2010 and 2011

February 17, 2011

It seems that we were never lacking for additional nuisances in real estate during 2010.  Throughout the year we experienced a number of unprecedented events that had a significant impact on our local real estate market.  And, as we enter 2011 the stage is set for another defining year.

The Conclusion of the Buyer Tax Rebate

As of April 30th of 2010 the Tax Rebate ended for all but military personnel.  This routinely modified attempt by our government to intervene in the free market system was marred by variations to the program, to include rebate amounts, whether it was to be repaid or not, and starts and stops that seemed to have no rhyme or reason, and delays in qualified recipients receiving the rebates.

We did however see prices on homes increase slightly as would be buyers rushed to go under contract before April 30th. However it was not without a price, overwhelmed lenders could not complete the loans in time to meet the June 30th deadline to close, so the deadline was extended until September 30th 2010.  This set the stage for fraud to occur as reports surfaced of contracts occurring after the April 3oth deadline.

Record Number of Foreclosures

2010 was year that our nation saw more than a 1,000,000 foreclosure hit the market. At one time foreclosures made up approximately 40% of all sales.  We also saw the cumulative effect of the foreclosure crisis resulting in home values, declining an average of 25% over the last three years.  2011 is forecast to produce more foreclosures that 2010; with approximately,250,000 properties being foreclosed.  The result may be a double dip in sales prices and declining values. In light of this 2011 should also bring out many would be purchasers who have been trying to time the market; hoping to capitalize on continuing historically low interest rates and a true bottoming of prices.  After 2011 we should see a decrease in the number of foreclosures hitting the market and as a result increasing sales prices and values.

Robo Signers for Foreclosure Proceedings

2010 also revealed how overwhelming the sheer volume of foreclosure is on our nation’s lenders and mortgage servicers.  Faced with mounting case of defaulted loans and the need to work them through the foreclose process; which by the way differs from state to sate, many lenders failed to execute the foreclosure process according to the rights and responsibilities set forth in the notes  and security deeds, and according to individual requirements of each state.  Much of this was also a result of the way mortgages are traded, serviced and hypothesized in the open Market.

2011 should result lenders paying closer attention to all governing documents and statutes, as they experience an increasing number of law suits resulting from their mechanized approach to processing foreclosures.

Record Low Interest Rates

2011 from all indications and from those far more equipped than I to forecast interest rate trends, seems to suggest that we will enjoy historically low interest rates for a while longer, but not forever.  This coupled with a bottoming of prices should be the catalyst for many waiting buyers to make buying decisions this year.

Increasing Number of Short Sales

2011 will also a year that we will see an increasing number of Short Sales hitting the market.  On the surface this seems like a bad thing, but it may have some positive effects.  First Short Sales are often time occupied by the owner, which means that the house has not sat empty for moths while a foreclosure is processed.  It may also mean that the property because the owner continues to live in it may be in much better condition than a foreclosure.  Often times this will result in a higher sales prices that a foreclosure would yield; thereby reducing the number of homes that sell at foreclosure prices.

What does listing status reveal about a property?

January 20, 2011

Active, Withdrawn, Expired, Sold, Contingent-KO, Contingent-Due Diligence, Contingent-Other, Pending, and Pending Lender Approval. What does all of this mean and what should it mean to you?

First of all these are various ways of describing the “Current Status” of a listing.  Unfortunately, there is often a delay between the change in a property’s listing status and when it is actually publicized.  Let me explain.

Phase One-An Active Listing Status

Phase One occurs when the listing is taken by the broker.  The listing is then entered into our local MLS’s, and will then appear as an Active Listing in other sites that receive their feeds from the local multiple listing services.

Phase Two-Under Contract Status… BUT!!!!

Hopefully while active, a buyer surfaces and agrees to buy the property under terms and conditions that the seller will agree to.  When this happens the broker is responsible for changing the status of the listing to that which reflects the terms agreed to by the buyer and seller.  These terms will usually consist of one of the following statuses; Contingent-KO, Contingent-Due Diligence, Contingent-Other, Pending, and Pending Lender Approval.  Each of these still provide for the property to be shown, but with the knowledge that the property is under a contingent contract.  In other words it will usually show as an active listing on all sites other than the local MLS that provide the feed.

Contingent-Kick Out Status

This status is generally associated with a contract that calls for the sell of the buyer’s property in order to close.  It provides the seller the right to “Kick Out” the contract if another acceptable offer is received, and if the buyer does not remove the  contingency from the contract within a set period of time (for example 48 hours, 72 hours). If the seller does “Kick Out” the contract in order to accept another offer, the buyer would normally be entitled to a full refund of their earnest money. These listings will still show up on web sites as available listings.

Contingent-Due Diligence Status

This status generally is associated with a contract that provides the buyer a set number of days to perform their Due Diligence on the property.  During this time unless negotiated otherwise, the buyer can usually terminate the contract with out penalty, and receive their earnest money back.  This period will generally provide the buyer the right to terminate the contract for reasons such as a home inspection, loan qualifying, appraisal, and even buyers’ remorse.  The length of time provided for the Due Diligence period is usually a result of the negotiations between the buyer and seller along with the counsel and guidance of their agent or broker.  These listings will still show up on web sites as available listings.

Contingent-Other Status

This status generally is associated with a contract that provides the buyer and/or the seller an out based on the occurrence or non-occurrence of an event.  Examples could be obtaining financing, rezoning approval, bankruptcy, divorce settlements, approval by a tax advisor or accountant, approval by a spouse, or even the approval by local authorities to approve plans to renovate.  This is a “catch all” for anything and everything.  These listings will still show up on web sites as available listings.

Phase Three-Pending Sale Status

Once all of the contingencies have been satisfied or expired, the listing status will/should go to Pending.  Unfortunately this is not always the case; and with some contingencies lasting until the date of closing, the status may go from Contingent to Sold without ever going Pending.  In my opinion this should never happen, provided the listing agent has done their job. When this does occur it is usually the result of the efforts of a good Buyers Agent.  Pending Listings normally do not appear on web sites as available listings.

Pending Lender Approval Status

Pending Lender Approval is a status that is intended to reflect a short sale contract.  Once a listing reflects this status it suggest that the parties are waiting for the lender to approve the contract that the buyer and seller have agreed to; which if approved will result in the lender accepting a reduced pay-off on their loan.

Generally speaking, once lender approval is received the listing status should change to some form of a Contingent Contract.  This is due to the fact that the date that lender approval is received usually replaces the Binding Agreement Date in the contract, and the date from which all other dates and time lines are gauged.

Expired Status

Reflects the fact that the property failed to sell within the designated listing period.

Withdrawn Status

Reflects the fact that the listing was Withdrawn from the market while it was listed.  Any number of reasons can cause this to happen.