Local economy, seller disclosures can impact resale value
By Dian Hymer
There are obvious decisions that need to be made before embarking on a home purchase. How much can you afford to pay? How much do you feel comfortable paying? Which neighborhoods offer the kinds of homes and amenities -- like good schools, shops and transportation nearby -- that you want? How secure is your employment? Do you have enough cash reserves for emergencies?
In addition to these practical considerations, you should find out as much as possible about the local area. Does it have a strong and diversified economic base? Is employment improving or are employers laying workers off? Are businesses moving into or out of the area?
Are new facilities planned that will impact the community, like a freeway that might change the character of a neighborhood by creating unwanted noise? This could negatively impact property values.
However, a new rapid transit station under construction within walking distance of where you want to buy could make commuting to the closest urban center easier. This might have a positive impact on local property values and cut your commute time considerably.
HOUSE HUNTING TIP: Residential real estate is a localized business. Home prices differ from one area to the next. State laws governing home-sale transactions also differ. Federal law requires sellers to disclose lead-based-paint hazards. But, state laws differ on whether or not sellers need to disclose other defects, like a drainage problem. Many states have mandatory seller disclosure requirements. In other states, seller disclosures are voluntary, not mandatory.
Agency relationships also vary from state to state. For example, dual agency, where one broker represents both the buyer and seller, is illegal in many states. It's legal in others. In states where dual agency is legal, like California, the broker has a split loyalty to the buyer and seller. However, in states like Massachusetts, Michigan and North Carolina, designated agency is an option. With designated agency, both buyer and seller are represented by the same broker, but by different agents. Each agent owes loyalty to the party he or she is representing.
It's important that your real estate agent explain the different agency relationships recognized in your state, particularly if you're coming from another state where different agency relationships are recognized. You should also find out how much disclosure about property defects you can expect to receive from the sellers. You should always have a property you're considering buying thoroughly inspected by qualified professionals. Include an inspection contingency in the contract even if the sellers have provided presale inspection reports.
Work with a knowledgeable, experienced local real estate agent that can inform you about issues, statutes and ordinances that will affect you when you buy or sell a home in the area. Many real estate companies require buyers and sellers to sign generic disclosures, sometimes 10-18 pages long, covering such things as ordinances, disclosures and agency laws, rent control and schools.
THE CLOSING: Be sure to read these and ask your agent if you have any questions. Most buyers and sellers don't take the time.
Dian Hymer, a real estate broker with more than 30 years' experience, is a nationally syndicated real estate columnist and author.
Monday, March 28, 2011
Monday, March 14, 2011
Pending California real estate sales bode well for spring
By Inman News
Pending home sales were up 13.6 percent in California from December to January, with distressed properties accounting for more than half of pending transactions, according to a new index compiled by the CALIFORNIA ASSOCIATION OF REALTORS®.
C.A.R.'s pending home sales index surveys more than 70 REALTOR® associations and multiple listing services, and uses 2008 sales levels as a benchmark. An index reading of 100 is equal to the average level of sales contract activity in 2008. The index climbed to 93.6 in January, up from 82.4 in December, but down 2 percent from a year ago, CAR said, noting that pending sales typically rise after seasonal slowdowns in November and December.
"January's pending sales should be reflected in higher existing sales activity in February and March and serve as a precursor to the spring home buying season," C.A.R. President Beth L. Peerce said in a statement.
Distressed properties -- short sales and bank-owned (REO) properties -- accounted for 54 percent of pending sales statewide, up from 50 percent in December but down from 56 percent a year ago.
Distressed properties accounted for 70 percent or more of all sales in Kern, Sacramento, Riverside, San Bernardino and Solano counties.
REO properties accounted for 32 percent of pending sales, up from 30 percent in January but down from 37 percent a year ago, C.A.R. said.
Short sales, which accounted for 19 percent of pending sales in January 2010 and 20 percent of sales in December, represented 22 percent of last month's pending sales.
Looking at all sales of single-family homes that closed escrow in January, the median price was $278,900 -- down 8.6 percent from a revised $305,020 in December and down 2 percent from a year ago.
But at $265,500, the median price for short sales closing escrow in January was 28 percent less than the $367,150 median price for "conventional" properties. The median price for REO properties, at $198,000, was 46 percent less.
Pending home sales were up 13.6 percent in California from December to January, with distressed properties accounting for more than half of pending transactions, according to a new index compiled by the CALIFORNIA ASSOCIATION OF REALTORS®.
C.A.R.'s pending home sales index surveys more than 70 REALTOR® associations and multiple listing services, and uses 2008 sales levels as a benchmark. An index reading of 100 is equal to the average level of sales contract activity in 2008. The index climbed to 93.6 in January, up from 82.4 in December, but down 2 percent from a year ago, CAR said, noting that pending sales typically rise after seasonal slowdowns in November and December.
"January's pending sales should be reflected in higher existing sales activity in February and March and serve as a precursor to the spring home buying season," C.A.R. President Beth L. Peerce said in a statement.
Distressed properties -- short sales and bank-owned (REO) properties -- accounted for 54 percent of pending sales statewide, up from 50 percent in December but down from 56 percent a year ago.
Distressed properties accounted for 70 percent or more of all sales in Kern, Sacramento, Riverside, San Bernardino and Solano counties.
REO properties accounted for 32 percent of pending sales, up from 30 percent in January but down from 37 percent a year ago, C.A.R. said.
Short sales, which accounted for 19 percent of pending sales in January 2010 and 20 percent of sales in December, represented 22 percent of last month's pending sales.
Looking at all sales of single-family homes that closed escrow in January, the median price was $278,900 -- down 8.6 percent from a revised $305,020 in December and down 2 percent from a year ago.
But at $265,500, the median price for short sales closing escrow in January was 28 percent less than the $367,150 median price for "conventional" properties. The median price for REO properties, at $198,000, was 46 percent less.
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