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Showing posts from April, 2008

March Home Sales Report - Now What?

The Illinois Association of Realtors released data today on the number of existing home sales for March, 2008.To me, there are two ways of looking at the this data. One - the cup half full. or, as Woody Allen said in the movie Scoop - a cup also half full; with poison.

In Chicago, median prices on homes sold (single family and condominiums) increased 5.3% comparing March 2008 to March 2007. But then again, only 2,045 homes sold, 11.5% fewer than last year.


For the larger, Metropolitan Statistical Area (Cook and surrounding counties), there were 5,753 total sales in March, 2008, up 33.5% from February. But then again, that March number is down 29.0% from last year.

There is a small part of me that wonders how much of the statistical bump-up from February to March can be attributed to those Chicago home buyers and sellers who wanted to "beat" the City's transfer tax increase, versus a typical Spring market effect versus overall economic recovery (or malaise). Probably won…

UPDATE: Mortgage Appraisers Regain some Indenpendence from the Mortgage Brokers that hire them

Back in February, I posted about an IRELA conference I attended in which two mortgage appraisers described the current market conditions from their vantage. They both expressed concern that Mortgage Brokers were demanding that appraisers find the "right" value for properties in order to get mortgage loans approved, and were threatening to stop doing business with those appraisers who would not "play ball"

On March 3, 2008, Fannie May, Freddie Mac, the NY Attorney General and the Office of Federal Housing Enterprise Oversight reached agreement to address this problem. Effective January 1, 2009, mortgage brokers will no longer be able to order "Made as Instructed" appraisals (requests for appraisals that contain instructions for a report to match the purchase price, or that have real or implied threats that continued business orders will only be made if the appraiser establishes a property's value "as instructed."

After December 31, only specia…

Slow Real Estate Market? Blame your Real Estate Agent - Part II

Back in January, I wrote about the disgruntled home buyer who sued her real estate agent for not telling her that other properties in the neighborhood sold for less than the one she bought. That case went to a jury trial. As reported this week by Stefan Swanepoel over at RealBlogging, took the jury only two hours to decide that the Buyer was just plain wrong.

City Council Bungled the Transfer Tax Rebate

Kudos to fellow lawyer / blogger Peter Olson for uncovering this nugget. He hit a home run on this one. I have been cry-giggling about it since I read his post last night Real Estate in Chicago: Chicago "CTA Portion" Transfer Tax Refund?

Yes, yes. City Transfer Tax increased effective April 1. Yes, yes, the City Council made a last minute switch so that Sellers are paying the increase, not buyers. Yes, yes, the revised tax declaration form may be the worst, most confused tax form ever. Yes, yes, in the short term many Buyers will be forced to pay the seller's share of the tax based on the contract language they agreed to months ago, before anyone ever considered the increase or the fee shift.

The absurdest cherry on top turns out to be the "CTA Portion Refund." Recall that refund, was proposed and passed as part of the original ordinance, in February, 2008, when the entire transfer tax was going to be borne by Purchasers. At that it made good political sense fo…

Mortgage Appraisals & Real Estate Contracts

Most every Buyer I represent in a home purchase needs a mortgage financing contingency as part of their contract. That is the weasel clause that lets a Buyer escape out if he cannot get the necessary financing. Mortgage lenders use a variety of factors to decide if they are going to lend that money, one of which being the property's appraised value: "is there enough value in the home to justify (secure) the loan"? If the value isn't there, the loan will not be approved, if the loan is not approved, the Buyer invokes the contingency. if the Buyer invokes the contingency, the deal is (almost always) canceled.

Back in February, I posted comments on a presentation made to the Illinois Real Estate Lawyers Association regarding mortgage appraisals in the current market. The presenter described the tighter standards lenders were imposing on their appraisers to try to guard against lending too much money against properties located in areas suffering declining market values.

I…

Illinois Property Disclosures Rules Sumarized: DIS-CLOSE! PERIOD!

Sometimes I long for the good old days of caveat emptor in Real Estate transactions. Ya pays your money, ya takes yer chances. That sort of thing. Still applies here in Illinois of course, but we have all sorts of disclosure laws now that have subsumed that ancient legal doctrine. We must disclose known problems with lead paint, mold, possibilities of radon, heating costs, and certain specified "major" material defects. It has reached the point that the number of pages of disclosure forms exceed the number of pages in the standard Chicago Association of Realtors form contracts!Kinda takes all the fun out of real estate deals, but for the fact that sellers often play cute and fail to make necessary disclosures - and then get sued when their Buyers find out. Fun for my colleagues, the litigators I suppose. Troublesome for the rest of us.
So what happens, lets say, when a seller discloses a problem to his buyer, the buyer never experiences anything to suggest that the problem e…