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Gina Branch | DFW Realtor® | Dallas Homes | RE/MAX Dallas Suburbs
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Pending home sales increased in February but with notable regional variations, according to the National Association of REALTORS®. The Pending Home Sales Index, a forward-looking indicator, rose 2.1 percent to 90.8, based on contracts signed in February, from 88.9 in January. The index is 8.2 percent below 98.9 recorded in February 2010. The data reflects contracts and not closings, which normally occur with a lag time of one or two months.
We currently have a home listed for sale. The homeowners have been relocated to a different state and the home is vacant. We received an excited phone call from the seller this afternoon. She had received a full-price offer on her property! Since we have an exclusive right to sell listing agreement, I was curious how someone got the offer to her directly, but an offer is an offer. We had her fax it over to us to review. Rather than a contract to purchase, it truly was just the transmission of an offer. They were offering full price with a $10 earnest money deposit. Out of the norm, but it was a starting point. I was doing okay until I read the conditions: “Seller agrees to leave the existing financing in-place and/or finance Buyer’s assignee or successor buyer.” This one should be a huge red flag for any seller. Basically, they will deed their property to a new owner but not pay off their mortgage. Wrap mortgages can be done in some states but most modern mortgages include a Due On Sale clause which states that the balance is due when the property is sold. Some of these companies will tell you that they bank will not exercise the Due On Sale clause but I’ve actually seen it happen when a buyer transferred his rental property into a Limited Liability Company. “Sales price is contingent upon the condition of the property, the actual Fair Market Value, and current market conditions.” While they’re offering full-price, it can be adjusted later based upon a number of factors. While I personally classify this as a scam, do yourself a favor and do not become involved in this type of “sale” without consulting with an attorney.
WASHINGTON (March 21, 2011) – Existing-home sales fell in February following three straight monthly increases, according to the National Association of REALTORS®. Existing-home sales, which are completed transactions that include single-family, townhomes, condominiums and co-ops, dropped 9.6 percent to a seasonally adjusted annual rate of 4.88 million in February from an upwardly revised 5.40 million in January, and are 2.8 percent below the 5.02 million pace in February 2010. Source: National Association of REALTORS® I recently was speaking with a potential client. She owns a condo in the area and was planning on selling it. She was worried that the title company that had issued the title policy had “insured around” a lien.  Base Photo Licensed from ShutterStock I’d never heard of it so I placed a call to Renee Graham with Preston Title in Plano, Texas. Renee has been around “forever” and is my “go to” person for title related questions. “Insuring Around” occurs when a lien is found on the title work, the lien holder cannot be found, and the title company believes the lien has been or should have been released. Basically, they can decide to insure the title and even though the lien cannot be released, they agree to insure the policy holder against any claims brought by that lien holder. Renee told me that this is not often done because the title company assumes all the risk. On a subsequent sale, the title company issuing the new title policy will hold the original title company liable for any future claims. While “Insuring Around” is not common, it is acceptable and the policy holder and future policy holders are insured against claims brought by the “insured around” lien holder.
Analysts are blaming the housing sector for the slow economic recovery. Analysts say the real estate market often leads to economic recoveries. However, “I expect housing will not provide as much support to this recovery has it has in previous ones,” says Eric Rosengren, the president of the Boston Federal Reserve Bank. REALTOR® Magazine-Daily News-Is Real Estate Jeopardizing Economic Recovery?. Source: REALTOR(R) Magazine Online The phone rang in the office this morning. I had just walked in and grabbed the call. I introduced myself and asked the caller what I could do for them. “We saw the house you have for sale at 123 Anywhere and we want to place a bid on it” the caller stated.  Licensed from iStockPhoto I ran through my usual questions: “Are you working with an agent?” – “No, we don’t have an agent.” “Have you seen the house?” – “No, but we want to place a bid!” “Are you paying cash or have you been preapproved for a mortgage?” – “We’ll need a loan but we can take care of that next week.” “Are you aware that this is a Short Sale property and make take some time to get bank approval?” – “It’s a foreclosure?” I was holding a power-hour open house later, so I suggested they stop by and take a look. This house is priced well below market because it needs extensive work. Personally, I think financing is going to be a problem because of structural issues. But none of this is what really got to me today. It’s the eBay mentality that appears to be taking over our industry. The only listings where I can place a “bid” are HUD Foreclosures. HUD Foreclosures are sold using a sealed bid auction format. Every one of my 36 listings is “for sale” and I’m not running a reserved price auction. Yes, price and terms are negotiable but I expect buyers to make offers on a property by completing the proper contracts, being able to show reasonable earnest money, and proof of funds or a mortgage pre-approval from a reputable lender. When I’m working with buyers, I explain this to them if they talk about placing a “bid” on a property. It’s not just the clients either. I hear Buyers Agents talk about placing bids on properties all the time. Why do I think we need to make sure that buyers are not in “bid” mode? While there are many issues, many buyers expect to be able to cancel their “bid” at any time without ramification. I had a buyer on one of my listings who decided to back out at the last minute. To make matters worse, the agent calls asking us to release the earnest money back to the buyer so they can use it for another property! This is not just a non-performing bidder email and a negative feedback situation. There can be serious legal and financial consequences. How did we get here? Perhaps it’s a combination of the run-up mentality leading up to the melt-down in 2008 and a generation that has grown up purchasing things through auction sites. Regardless of the reasons, little real estate is sold in auction format and it’s critical to understand the implications of entering into a contract.
Posted on Dallas Dirt by Candy Evans Gina Branch, ABR of RE/MAX Dallas Suburbs, offers a response to our Eager Seller of the day who hasn’t seen any movement in her $150k home on the market for a week:
Originally Posted at: http://dallasdirt.dmagazine.com/2010/10/18/ask-candy-how-foreclosuregate-will-affect-dallas-real-estate-its-a-fire-sale/ |
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