the wasserblawg

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...

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 probl...

Trulia has an interesting feature called Trulia Voices. Real Estate professionals and consumers can pose questions to each other about nearly every aspect of buying and selling property. I've been following the Chicago-centric discussions for the last couple of months and I am enjoying alot of what I am reading. Buyers and Sellers ask for "free advice." Agents self-promote. "Expert" real estate investors pontificate. Good Stuff. This site is not without its problems. As always, the relative anonymity of the internet affords people who do not really know the answers or even understand the questions opportunity to give answers with an appearance of authority. Hapless consumers are at risk of getting some really bad, even dangerous advice. Its caveat emptor for anyone who uses the web site that is supposed to help them navigate the wacky caveat emptor world of real estate deals. I am seeing a lot of agents trying to answer legal questions. Some are from ...

Well that didn't take long. Chicago's City Council reconsidered yesterday, and by a 49-0 vote, passed a revised ordinance on the municipal transfer tax increase passing it off from buyers to sellers. The new seller-paid $3/$1,000 transfer tax can be added on to increased recording fees, and water department full payment certification fees. And, based on recent history anyway, stand by for title companies fee increases which seem to hit every spring....

It stands to reason that most all of the professionals involved in a real estate transaction have a vested interest in seeing the deal through to a closing. From a distance, we lawyers "could" be included in this camp, understandably so. My buyers hire me (and many real estate agents refer them to me) because they want to buy. Sellers hire me because they want to sell. No one wants the deal to collapse. But the truth runs a bit deeper, as my first loyalties run to my client, and a large part of my job is to try to keep my clients out of trouble. From time to time, my review of a contract leads me to an unfortunate, but inevitable conclusion: the deal stinks. In those instances, I try hard to talk my clients out of going forward on their contracts; "off the ledge," if you will. Some listen, some don't. At least I try. I was reminded of all this earlier this week while reading about the problems at the Sterling Private Residences . Turns out that there is a ra...

As of yesterday, it looks as though the City Council's Department of Finance did a 180 degree turn and is now going to lay off the $3.00 transfer tax increase on sellers and not buyers . The tax increase goes into effect on April 1. So it was to be expected that Buyers would rush their deals forward and try to close on March 28th or on the 31st to beat the increase. Turns out that might not work out as planned. See, the tax gets paid when Deeds are filed with the Cook County Recorder of Deeds . Its usually the title company's job to handle the recording of documents and since they have to record so many, they do not always get recorded the same day as your closing. Sometimes it can take days or weeks (or months) to get done. Title company's dont want to be left holding the bag for the fee increase. As a precaution many will start collecting additional funds to cover the tax increase as early as March 25th or 26th. So all those end of month closings we took pains to schedul...

Nothing should be simpler than a real estate transaction. The buyer giver the seller some money. The seller gives the buyer a deed and some keys. Everyone shakes hands and goes home. Seldom is life so simple. Take for example what is going on with my clients Brigham and Leslie, and how careful lawyering will save them from near disaster. This delightful couple is trying to buy a one million dollar home from a bank. The bank, sorry to say, owns the house because it foreclosed the former owner’s mortgage. After weeks and weeks of negotiations and preparation, we are supposed to close this week, tomorrow, actually. Only we won’t. Not yet anyway. In foreclosure cases, the Banks tend to call all of the shots. They require buyers to sign special contract riders that limit the Bank’s liabilities. Buyers take these properties “as is.” The Banks refuse to pay certain customary seller charges. They impose penalties on Buyers who are not ready to close on the appointed date, and then more often t...