She had to put her home up for sale last year due to financial difficulties. She hired a Realtor who made assurances that the home, with proper marketing, would reach its price. As time moved forward, it became apparent that the contract price would have to be lowered to get more potential buyers interested.

A Buyer was eventually found but as the market continued downward the price had to be adjusted downward,  and this Seller was desperate.  In her multiple discussins with her Realtor, the Realtor assured her the price would be met but at settlment it was not. She had no choice but to sell the property at a loss or risk  being sued.  She is currently in bankruptcy becuase the loss crushed her finacially. The Realtor advised her there was nothing she could do.

I mention this cautionary tale not because it is an every day occurrence but to remind consumers to be very careful that if  you hire a real estate sales person, you carefully check their credentials and be sure that your best interests are in mind, not the agents commission, when you place a property on the market.

First-time home buyers have been getting tax credits of up to $8,000 since January as part of the economic stimulus package enacted earlier this year. But with the program scheduled to expire at the end of November, the government extended and expanded the tax credit to include many purchasers who already own homes.
Buyers who have owned their current homes at least five (5) years would be eligible for tax credits of up to $6,500. First-time home buyers — or anyone who hasn’t owned a home in the last three (3) years — would still get up to $8,000. To qualify, buyers in both groups have to sign a purchase agreement by April 30, 2010, and close by June 30.

Keep in mind that the credit is available for the purchase of principal homes costing $800,000 or less, meaning vacation homes are ineligible. Also, the credit would be phased out for individuals with annual incomes above $125,000 and for joint filers with incomes above $225,000. For those in the military, the credit would be extended an additional year, until June 30, 2011, for members of the military serving outside the United States for at least 90 days.

So purchasers can now breath a bit easier at least until April 30, 2010 if you want to qualify for the credit.

While you are breathing a little easier contact me if you have any questions.

In this post I will talk briefly about a topic that comes up frequently and that is the fees charged by real estate professionals ON TOP of the commission they earn from you as the client.

Often this fee is set unbeknownst to the consumer when you engage the services of a Realtor or broker. This fee is often buried in the contract so often you do not know you have even agreed to it. Read your documents carefully, contact me, and DON’T AGREE TO IT! If you do happen to agree to the charge it will reappear at your closing on the HUD-1 settlement sheet on page 2 in line 704 and is characterized as an Administrative Fee or a Broker Service Fee. Generally, the amount within the range of $175.00 to $375.00.

This fee is nothing more than that of a cover charge like you would see in a club for just walking in the door. I believe that it is a charge that has no value. Usually the “services” they are offering under the terms “Administrative Fee” or a “Broker Service Fee” are the same services that either must perform or should be performing on your behalf, to earn their already significant commission!

I sympathize with the professionals that their job is not easy during these difficult housing times but these additional fees are not the proper way to earn money.

Do your work and question them as to why if you are already paying a commission should you also be charged any additional fee for the services already expected. Bottom line… don’t pay any fees that have no value. Read your documents and contact me before you sign!

Throughout the country residential builders nationwide have argued that the 2009 International Residential Code (IRC), which requires new homes to be equipped with fire sprinklers beginning in 2011, would negatively affect the housing market because of the cost increase to home buyers.

However, statistics show that nationally, residential fire sprinklers will only cost approximately $1.61 per square foot, or 1% of the value of the home to install. This cost adds approximately $3,500-$5,000 to the price of the home. Over the life of a typical 30-year mortgage, that’s less than a few dollars per week and certainly not a hefty price in the event of a fire

The study findings believe that the inclusion of residential fire sprinklers for one- and-two-family dwellings could prevent serious fire-related injuries. About 85 percent of all fires occur in the home, fueled by new lightweight construction and more flammable home contents. In fact, the new sprinkler regulations are being endorsed by fire service professionals across the country, such as the U.S. Fire Administration, and the International Association of Fire Chiefs. Groups such as these agree smoke detectors are no longer enough in residential fire protection, as lightweight construction has become more prevalent, house contents are more flammable than ever, and the time to escape a house fire has been reduced from 17 minutes 20 years ago to 3 minutes today, according to a cost-benefit analysis by FEMA.

The NFPA study clearly demonstrates that home fire sprinkler requirements do not impede housing development starts,” says Jim Shannon, NFPA president. “This report is another point to make the case for enacting life-saving sprinkler requirements in local communities.”

While I realize that residential home buyers do not want items added to the cost of a new construction, home sprinklers provide value and safety, and they are definitely becoming a necessary part of the cost of home buying. Please reach out to me with any questions and to have me give your deal a legal inspection.

Generally, buying or selling a home is the largest financial transaction of one’s life. These real estate transactions give rise to a number of legal questions that a lawyer with real estate background and experience is best equipped to answer.
ONLY a lawyer and NOT a lender, title company, or a real estate broker or real estate agent, can give you legal advice.
Even an agent who represents only you, and not the opposing side, has a financial interest in seeing the deal go through. You hope that experienced, reputable agents won’t let this interfere with their advice to you, BUT it may cause new or less scrupulous agents to insist that you’ll never get the house unless you bid high, to recommend home inspectors who make light of potential problems, or to otherwise compromise your interests.

Throughout the process, the Buyer’s and Seller’s interests can be in conflict with each other, and with any professionals involved in the sale. The broker commonly serves the Seller, and the lender is obtained by the Buyer. Neither knows how to provide legal guidance.

Seeking the counsel of a lawyer is a very good idea from the start of the real estate matter until the actual closing. Of course transactions can proceed without an attorney but as I mentioned to the dentist, when a person gets a cavity would you recommend that they attempt to drill their own tooth?

Call me before you sign anything with your legal questions regarding any areas of real estate.

Without question this credit is a great incentive for purchasers who are unsure if they are in a position to make a purchase. Often this credit is enough to put them over the edge to make the purchase. The tax credit has several restrictions the most important being that it will go away after November 30, 2009.

However, a new bill was introduced this week, HR 2801 or Home Ownership Moves the Economy (HOME) Act of 2009, which aims to make the current $8,000 first-time home buyer tax credit available to literally anyone that purchases a primary residence through the end of 2010. Click this link to learn more about whether you qualify. Also, here is a brief mention of the credit from a financial expert.

In addition the U.S. Department of Housing and Urban Development (HUD) announced that first-time homebuyers using FHA-approved lenders can now get an advance on the $8,000 tax credit created by the stimulus package and apply it toward their down payments or closing costs and not wait for a credit on their tax returns.

Now is the time to buy, reach out to me with any questions about the credit.

Bottom line is the market is where it is, but that doesn’t mean buying and selling don’t exist, so watch Barbara and see what she has to say. Then contact me for legal advice and the “legal inspection” of your deal.

How do you find a qualified home inspector?
Talk to friends who have had an inspection recently. Did their inspector do a good job? You can ask the inspector for references, too, but keep in mind they probably won’t give you the names of unhappy clients. If you are working with an attorney ask who they recommend. Attorneys often see the inspection reports so they know who the good inspectors are.

Inspect the Inspector.
If statements in the appraisal or pest report cause the lender to ask for a structural inspection they will expect that inspection to be done by a licensed professional, usually a structural engineer .Before you select an inspector find out what type of licensing the lender requires if a structural inspection is necessary. Look for an inspector that is ASHI certified. Ask where was the inspector trained? Does he or she attend continuing education classes? Does the inspector belong to a professional organization? If so, what are the requirements for membership? Entry should require more than just an application fee. Does the inspector carry Errors & Omissions insurance? This type of malpractice insurance may come in handy if the inspector overlooks a major problem. If your inspector qualifies, it may save you time and money since you won’t have to hire a second person to verify structural integrity.

What does the inspection cover?
Once you find the Home Inspector ask many questions, after all they are working for you! Ask what systems are covered in the home inspection? Are there some services that require an extra fee, such as a septic inspection? A septic report is required for FHA and VA financing. Doing it at the same time as the home inspection is usually less expensive than bringing the inspector back again later. Will you be given a detailed report with photos of problem areas? It should include a checklist showing results for all systems evaluated. It should also include reports in paragraph form. Ask for a time estimate. A thorough inspection can take 3-5 hours or more.

Do not skip this step!

I am always stressing the importance of what I term the “Legal Inspection”, having all your documents reviewed by an attorney who routinely practices in real estate and just as important is a qualified home inspection, be sure to do it!