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Showing posts from August, 2009

Assessing Mortgage Appraisals

Chicago area real estate contract live or die depending on the results of mortgage lender appraisal reports. If the property value does not justify the loan, the contract is going nowhere.

As the market defalted over the last two years, many of my clients saw contracts collapse based on low appraisals.

A great many Chicago area Realtors, bloggers and other real estate pundits were quick to place blame for low property valuations on the Home Valuation Code of Conduct that became effective this past May. Frankly, the low appraisals were already a problem long before HVCC went into effect. For all the uproar, I am seeing a rather interesting (positive) trend of late. More on that in a moment. First a quick recap.

The HVCC is not so much law, as it is the result of an agreed settlement entered into by Fannie Mae, Freddie Mac, and the office of the New York State Attorney General.

The idea was to stem the tide of appraisal fraud and abuse by changing the way that lenders select their mortgage…

Another New Real Estate Contract Debuts...

I had the good fortune this afternoon to be retained in another Chicago condominium purchase. After an introductory phone conversation, I asked the client to forward his contract for review.

Much to my surprise (and delight) I immediately recognized that the newest local form contract is finally in circulation.

Ladies & Gentlemen of the real estate community, I give you "Multi-Board Residential Real Estate Contract 5.0.

A more complete exploration of the Multi-Board 5.0 form will follow in another post or two.

I know that a lot of realtors do not like the form for its shear heft (14 pages compared to the Chicago Board's 4 pager), but I like this one and encourage everyone to at least give some consideration to "trading up"

These two features alone make it the best available contract for local transactions: A new font and larger type make this one emminently more readable, even if faxed 3, 4, or 7 times back and forth during negotiations.The electronic form (5.0e) is …