This week’s relevant links: Week of April 1st-6th, 2013

NewsLinks-Full

“What sunshine is to flowers, smiles are to humanity. These are but trifles, to be sure; but scattered along life’s pathway, the good they do is inconceivable.”

― Joseph Addison

 

GenY is finally in a mood to buy (houses)

A generation that’s about 90 million strong, Millennials (or Generation Y) form the largest demographic wave in the nation’s history

 

Home Prices Seen Making Stronger Gains in 2013

the first three months of the year have shown the conditions that produced last year’s gains are just as strong

 

Homeowners, Name Your Price

A real-estate site tests the magic number that might convince an owner to move; listing an Arizona home on a whim

 

CoreLogic: Completed Foreclosures at Lowest Level Since 2007

Data from CoreLogic shows 54,000 homes were lost to foreclosure in February of this year, a 7 percent decline from January’s downwardly revised 58,000

 

DataQuick Reports Improvements for Housing, Questions Sustainability

Although prices are improving and foreclosures are declining, there’s still room for economic uncertainty to “dampen” housing activity, according to DataQuick’s Property Intelligence Report

 

Increase in Consumer Sentiment Surpasses Expectations

consumers have expressed improved prospects for economic growth

 

Is California’s Wild Housing Market a Sign of a Bubble?

California is the comeback kid of the housing recovery

 

A Look at Case-Shiller, by Metro Area

The composite 20-city home price index, a key gauge of U.S. home prices, was up 8.1% in January from a year earlier. Seattle-8.7%, Portland-8.3%

 

Trulia: Buying Beats Renting Despite Rising Home Prices

To buy, or not to buy, and instead to rent? That, as ever, is the real-estate question

 

Housing recovery starts to look like a boom

Portland steamed along in the middle of the pack, posting 8.3 percent home price growth, slightly ahead of the 20-city index of 8.2 percent

 

Buy or rent? 10 major cities

Seattle’s land comes at a premium: The area’s residential communities are hemmed in by the Olympic Mountains and Cascade Range, as well as the Puget Sound.

 

Seattle house prices take seasonal dip

House prices in the Seattle area edged down in January for the second straight month, but year-over-year they are up 8.7 percent

 

US rate on 30-year mortgage ticks up to 3.57 pct.

Average U.S. rates on fixed mortgages edged up this week but remained near historic lows. Low rates have helped drive the housing market’s steady recovery

 

S&P nears record as home price surge lifts stocks

Rising home prices and orders for manufactured goods drove stocks up from the opening bell

 

Coldwell Banker recognized for training platform

Coldwell Banker Real Estate LLC was named one of the top 10 companies “for ongoing excellence in learning and development” by Chief Learning Officer magazine

 

Zombie Homes on the Rise?

Zillow chief economist Stan Humphries weighs in on how much of a problem zombie homes really are across the country

 

Home Decor When Money’s No Object

Prices are increasing but are still ‘on sale’ throughout most of the country when compared to 2007 prices

 

Homes ‘On Sale’ Across the Country [INFOGRAPHIC]

The NAR reported total sales were up 10.2% from February 2012, but conventional sales are probably up closer to 25% from February 2012, and distressed sales down

 

Should Your Buyers Increase Their Offer?

Limited inventory and a very strong demand for housing has created an environment where bidding wars are commonplace in today’s real estate market

 

House of the Week: And the Winner Is…

Four new properties vied for the title of “House of the Week.”  Watch this video (or see the slide show) to find out which home readers chose as the latest top abode

 

Oregon home permits jump 27 percent

The number of single-family home permits issued in Oregon jumped 27.4 percent in 2012

 

After You Read the Listings, Your Agent Reads You

EVERY saleswoman will tell you that the customer is always transparent

 

Housing market surge may wane in time

The outlook for housing continues to remain positive, with economists predicting a sustainability that may last for years

 

Lending data reveals no debt crisis

Home mortgage debt fell to $9.4 trillion at the end of 2012, down from a record of $10.6 trillion in 2008

 

 Big Predictions for Housing for Next 2 Years

Home sales are projected to post some big gains in the next two years, according to Fannie Mae’s latest monthly economic outlook

 

New Database Allows Americans to Post Mortgage Gripes

Americans have a lot of gripes when it comes to mortgages

 

A New Senior Moment

Zumba classes, sushi chefs and kilns in the crafting room: the newest generation of 55-plus communities caters to active—and demanding—retirees

 

For more opinions on today’s real estate issues, visit CBBain’s “In The Know” blog at www.cbbaincareers.com/blog

“Links” are edited each week by John Deely 

 

Avoiding Lender Fraud

Avoiding Lender FraudAs a Principal Managing Broker, I am asked about the proper response to handling seller financial incentives to the buyer. There are only two ways to handle financial incentives from the Seller to the Buyer without stating specific inspection items in the addendum. Loan officers from various companies continue to ask our brokers to write a Form 34 that simply says, “Seller shall credit Buyer $5000 toward their allowable closing costs and pre-paids at closing”. This is easy for them, because they don’t have the liability we do. As the ring master of the transaction a real estate broker always knows the exact reason why a Seller would be crediting a Buyer money. The loan officer can say they didn’t know what it was about should the loan later go into default and the transaction is investigated. When we write an addendum as stated above it is clearly an intent to hide the fact that the compensation is due to problems found on the building inspection. The Buyer will sign a document from their lender at closing that speaks specifically to disclosure of material facts about the property. So if the brokers and the principals are a party to such an addendum they will all have liability concerning fraud if the loan defaults and is investigated.

Below I have outlined the two responses that push us as far as we can go without getting into the gray area of possibly committing fraud. These two responses are within the requirements set forth by the Department of Financial Institutions.

Form 34: “In lieu of any repairs, Seller will credit the buyer $5000 toward their allowable closing costs and pre-paids.” (It is up to the underwriter to ask for any additional inspection information. We met the burden of the law, because we wrote “In lieu of any repairs”.

Form 35R: (Inspection Response Form) “Seller shall credit Buyer $5000 toward their allowable closing costs and pre-paids.” (It is up to the underwriter to ask for any additional inspection information. We met the burden of the law, because we wrote the credit on an inspection response form).

Put Our Knowledge On Your Side

When buying a home: Why not “on or before”?

Why not “on or before”? Closing Calendar

Often a buyer and seller aren’t sure when they want to close.  They would like to write in the contract that the closing will be “on or before” a certain date.  Brokers will sometimes go along with this thinking that the issue will be resolved later.

Therein lays the problem.   The date isn’t certain.  Good contracts are unambiguous.  Everything pertinent to the transaction, all the terms of the agreement, is spelled out in it.

In a good transaction, someone could know exactly what the parties had agreed to by just reading it.  As a Principal Managing Broker I am often called into a situation where a transaction is faltering.   The first thing I do is review the paperwork.  As I talk to the broker involved, if they have to explain what the parties REALLY meant (say on the notorious “form 34”) I know we are in trouble.

Good transactions are factual, precise, and specific.  Actions are spelled out, results identified.  Thankfully we have excellent forms already written for us by attorneys.   These forms have been tested and revised when they are found wanting.

“On or before” isn’t factual, precise or specific.  One party can think that the closing will happen as soon as their financing is ready.  The other party can be arranging for packers and movers with another date in mind. Worse, either party assumes they can compel the other party’s cooperation to their date.  No, they can’t.  Lenders don’t like it.  Escrow doesn’t like it.

Go into every contract with clear precise language.  If the parties agree to a change, amend the agreement.  That is how you really look out for the best interests of your client.

 

Property-Seller Disclosure Statement

SELLER DISCLOSURE STATEMENT

Like many other states, Washington requires that the Seller must provide the buyer with a property disclosure statement if the sale involves a property containing up to four dwelling units, unimproved land that is zoned residential, or a mobile or manufactured home. The only exemptions to this law include transactions where the Seller received the property through a foreclosure purchase, a gift from a family member, or transfer from a personal representative who is settling an estate.

Many residential building companies require as a condition of sale that a buyer waive their right to receive a completed transfer disclosure form. The common misconception is that if the Seller doesn’t fill out the form, and the Buyer waives their right to receive the completed form, that the Seller no longer has any obligation to disclose material defects. The Seller must disclose in writing any known material defects, regardless of whether or not the Buyer waives receipt of the disclosure form. There is no “free walk” on disclosure. If it is material, and you know it, you must disclose it!

Real Estate Licensees have no duty to investigate or inspect a property for defects. When a Real Estate Licensee representing a Seller is made aware of a defect that is not on the Seller’s Disclosure Statement they must immediately make the Seller aware of it and recommend that they disclose it to the Buyer if there is already a pending sale, or amend their Disclosure Statement if the property is actively on the market. If the Seller will not comply, the Real Estate Licensee is left with one option, and that is to resign. The reason for this is that the Licensee is literally left between a rock and a hard place when a Seller chooses not to disclose a material defect. The Licensee has an obligation of confidentiality where their Seller is concerned, but they also have an obligation to prospective Buyers of disclosing any material defects that are not already contained in the Seller’s Disclosure Statement.

 

How can a listing agent represent both parties in a transaction?

There is confusion surrounding agency and exactly who the listing agent should represent when the Buyer comes directly to them without the representation of another agent. Assuming the listing agent had no previous relationship with the Buyer, their representation should remain with the Seller.

When you really think about it this is the logical route, and the Buyer will see this too. The Law of Real Estate Agency

The listing agent has first been employed by the Seller to represent them in the sale of their property.  The Buyer views the property with the listing agent knowing full well the listing agent represents the Seller.
It is often the broker/agent who puts forth the idea of the Buyer receiving agency representation from the listing agent.

The least problematic way for a listing agent to sell their own listing is to act as a facilitator for the Buyer. This allows the listing agent to act as the selling agent/facilitator for the Buyer without compromising their agency to the Seller. This is accomplished by simply explaining to the Buyer that the listing agent will take care of all the selling agent responsibilities for the Buyer.What the listing agent will not do is to give the Buyer advice on price or anything else that would compromise the best interest of the Seller.

The listing agent then gives the Buyer “The Law of Real Estate Agency” pamphlet to read about the different types of agency. If after reading the pamphlet the Buyer feels comfortable with the listing agent representing the Seller and acting as a facilitator on behalf of the Buyer, the listing agent will have the  Buyer sign an agency disclosure form that set forths that the listing agent represents the Seller. The Buyer can then go forward in having the listing agent prepare their offer.  If the Buyer is uncomfortable with the listing agent acting only in the Seller’s best interest, they can bring in another agent/broker of their choice to represent their interests.

Visit:  CBBain.com (Washington) or CB Seal.com (Oregon) to search for homes, find an office or to find a broker.