When it comes time in the course of the transaction to transfer title from seller to buyer, a deed is normally required. In a standard Purchase and Sale agreement, a Statutory Warranty Deed is the document most often requested to convey title from seller to buyer. With a Statutory Warranty Deed, the seller expressly guarantees the grantor's good, clear title, and often carries the covenants concerning quality such as quiet enjoyment, the right to convey, freedom from encumbrances, and defense of title from all claims. Our "Form 21," which is our Residential Real Estate Purchase and Sale Agreement, has a section called " The Condition of Title", which calls for title to be transferred via a Statutory Warranty Deed.
Other deeds that are used in special circumstances include Special Warranty Deed, where the grantor covenants to defend title against only those claims and demands of the grantor and those under the grantor (seller) and is often used by someone who is appointed to act on behalf of the true owner, such as a Personal Representative for an estate or other duly appointed person. The specific language of this type of deed is contained in Limited Practice Board form 16-09.
If you receive a bargain and sale deed [LPB 15-05], you are typically buying land without knowing if there are any encumbrances on it, unless stated in the deed. The grantor only guarantees that they have title, and does not guarantee that the title is free of defects. This type of deed is generally used by a bank, tax or government authority, or Personal Representative who did not occupy the land and does not know of any encumbrances.
This article is presented as a service for your benefit, with the help of my husband, David Hunnicutt, MAI, JD, real estate appraiser and attorney at law. Should you have further questions please consult with independent counsel of an attorney of your choice.
Sunday, November 21, 2010
Saturday, November 20, 2010
2010 NAR Home Buyer and Home Seller Highlights
Recently released, the National Association of Realtors recently released a buyer and sellers survey. NAR 2010 President Vicki Cox Golder, owner of Vicki L. Cox & Associates in Tucson, Ariz., said the pattern of home buyers taking a long-term view has solidified over the past few years. “This underscores two simple facts—home ownership encourages stability, and the longer you own, the better your investment.” Some highlights from this extensive survey include these interesting facts:
Sellers had been in previous home 8 years, up from 7 in 2009.
First time buyers say they intend to stay in their home for 10 years.
Repeat buyers say they intend to stay in their home 15 years.
(These first three stats indicate buyers are looking at homeownership as long term investment)
Even with recent declines, a seller who bought a median home 8 years ago has still gained 24% in equity.
A seller who bought a median home 11‐15 years ago have gained 40% in equity.
During the “boom” (2006), 30% of all homeowners had owned for 3 years or less. In 2010, its 11%.
The number of 1st time buyers has reached an all‐time high at 50% of all sales., up from 49% in 2009.
Previous to that, the high for 1st time buyers was 1991. (44%)
The median 1st time home buyer is 30 years old. 95% chose a fixed rate mortgage.
Since the 1990’s, 20% of home buyers are single women. Single men accounted for 12% in 2010, an all
time high. Married couples account for 58% of the market.
The typical repeat buyer is 49 years old.
Buyers typically looked at 12 homes over 12 weeks before buying.
Market time for homes purchased dropped from 10 weeks to 8 weeks.
89% of all buyers used the internet to search. 88% used real estate agents.
Of all repeat buyers, about half traded up to a larger home, a quarter traded down to a smaller home
and a quarter stayed about the same.
Most utilized real estate site; Realtor.com, followed by company websites (CB, ReMax, etc.), followed by
real estate websites (Zillow, Trulia, etc.)
For Sale By Owner's (FSBO’s) not selling to a family member dropped to an all‐time low…just 5% of the market (1/2 of what it
was in 2004).
FSBO sellers have a median income of $64,000. Professionally assisted sellers $93,200.
FSBO sellers tend to be in rural areas, so their median price is just $140,000 vs. $190,000.
Sellers had been in previous home 8 years, up from 7 in 2009.
First time buyers say they intend to stay in their home for 10 years.
Repeat buyers say they intend to stay in their home 15 years.
(These first three stats indicate buyers are looking at homeownership as long term investment)
Even with recent declines, a seller who bought a median home 8 years ago has still gained 24% in equity.
A seller who bought a median home 11‐15 years ago have gained 40% in equity.
During the “boom” (2006), 30% of all homeowners had owned for 3 years or less. In 2010, its 11%.
The number of 1st time buyers has reached an all‐time high at 50% of all sales., up from 49% in 2009.
Previous to that, the high for 1st time buyers was 1991. (44%)
The median 1st time home buyer is 30 years old. 95% chose a fixed rate mortgage.
Since the 1990’s, 20% of home buyers are single women. Single men accounted for 12% in 2010, an all
time high. Married couples account for 58% of the market.
The typical repeat buyer is 49 years old.
Buyers typically looked at 12 homes over 12 weeks before buying.
Market time for homes purchased dropped from 10 weeks to 8 weeks.
89% of all buyers used the internet to search. 88% used real estate agents.
Of all repeat buyers, about half traded up to a larger home, a quarter traded down to a smaller home
and a quarter stayed about the same.
Most utilized real estate site; Realtor.com, followed by company websites (CB, ReMax, etc.), followed by
real estate websites (Zillow, Trulia, etc.)
For Sale By Owner's (FSBO’s) not selling to a family member dropped to an all‐time low…just 5% of the market (1/2 of what it
was in 2004).
FSBO sellers have a median income of $64,000. Professionally assisted sellers $93,200.
FSBO sellers tend to be in rural areas, so their median price is just $140,000 vs. $190,000.
Thursday, November 18, 2010
"Show me the short sales....I want a good deal!"
I have had a number of potential buyers come to me recently and ask for me to show them short sales. When I ask them what they are looking for, they generally say, "a great deal." Sometimes they have stories of friends who got some fantastic deal on a short sale. I then proceed to tell them there are great deals with homes that are not in the short sale process and could we consider them as well? I then explain that sellers of non-distressed homes are impacted by the pricing of short sales and foreclosures and have often lowered their price to compete with homes in their neighborhood that may be distressed. I further explain that short sales are not for the faint of heart. While most say they are patient people, without fail, every buyer I've worked with in a short sale has been frustrated with the process. A buyer can write an offer for more than list price and still not hear for months from the bank whether or not they will accept the offer. Why is that? It is in fact the Realtor, not the bank that puts the list price on a home. After an offer has been secured, the bank will look at the offer which is likely well below what they are owed, order a BPO (broker price opinion which is a market analysis), then process the offer. Each investor on the loan requests different information, so while one deal can sail through in a month, others can take typically up to 9 months and recently I heard of one that took over 2 years!
What often happens in short sales is that buyers lose hope, give up and walk away to find another home. In fact, one lender told me it takes 2 to 3 buyers to close a short sale, largely because the buyers walk away. Often buyers walk away just weeks before a decision is made on an offer. Then the Realtor puts the home back on the market and tries to secure another offer, hopefully one that will "stick." The short sale process is not for someone who needs to be in a home by a certain date and is ideal for someone renting month to month or even a person who is living with someone without a lease. I had one recent college grad who lived with his parents purchase a short sale listing. It was the perfect scenario in that it did not matter when he moved and his patience paid off with a really great deal.
I've had questions from buyers on the list price of short sales. They seem to be such a great deal, and often sell for more than asking price. Why is that? A Realtor is working against the clock trying to bring the bank an offer before the home goes into foreclosure. If that happens, the home comes off the market, a new agent is assigned, and all deals that were written during the short sale time period go into the waste basket. The price on a short sale must be competitive and often are a bit below market value. When buyers come to me and ask what they should offer on a short sale, I'll do a market analysis which often leads me to say, "If you bought this home for sticker price, you'd be getting a great deal." But other agents are telling their buyers the same thing, so as with all negotiations, the best offer wins. It is unfortunate when working with a buyer who feels he can't pay full price for psychological reasons....they are not likely to have their offer accepted. Sometimes when a buyer puts in a full price offer, the bank will counter with a higher number. This surprises some buyers, but shouldn't. Remember, it is the Realtor, not the bank, who puts a list price on the short sale. They are fishing for offers and want to get as many as possible in a short period of time to keep the home from going into foreclosure. So if you make an offer on a short sale and the bank counters with a higher number, do not be surprised. The bank is trying to recoup as much money as possible, because they are taking a loss in a short sale.
If you have time and don't mind a test of your patience, consider looking at short sales, but please, not to the exclusion of other non-distressed sales or even foreclosures on the market. There are great deals to be had in every type of sale.
What often happens in short sales is that buyers lose hope, give up and walk away to find another home. In fact, one lender told me it takes 2 to 3 buyers to close a short sale, largely because the buyers walk away. Often buyers walk away just weeks before a decision is made on an offer. Then the Realtor puts the home back on the market and tries to secure another offer, hopefully one that will "stick." The short sale process is not for someone who needs to be in a home by a certain date and is ideal for someone renting month to month or even a person who is living with someone without a lease. I had one recent college grad who lived with his parents purchase a short sale listing. It was the perfect scenario in that it did not matter when he moved and his patience paid off with a really great deal.
I've had questions from buyers on the list price of short sales. They seem to be such a great deal, and often sell for more than asking price. Why is that? A Realtor is working against the clock trying to bring the bank an offer before the home goes into foreclosure. If that happens, the home comes off the market, a new agent is assigned, and all deals that were written during the short sale time period go into the waste basket. The price on a short sale must be competitive and often are a bit below market value. When buyers come to me and ask what they should offer on a short sale, I'll do a market analysis which often leads me to say, "If you bought this home for sticker price, you'd be getting a great deal." But other agents are telling their buyers the same thing, so as with all negotiations, the best offer wins. It is unfortunate when working with a buyer who feels he can't pay full price for psychological reasons....they are not likely to have their offer accepted. Sometimes when a buyer puts in a full price offer, the bank will counter with a higher number. This surprises some buyers, but shouldn't. Remember, it is the Realtor, not the bank, who puts a list price on the short sale. They are fishing for offers and want to get as many as possible in a short period of time to keep the home from going into foreclosure. So if you make an offer on a short sale and the bank counters with a higher number, do not be surprised. The bank is trying to recoup as much money as possible, because they are taking a loss in a short sale.
If you have time and don't mind a test of your patience, consider looking at short sales, but please, not to the exclusion of other non-distressed sales or even foreclosures on the market. There are great deals to be had in every type of sale.
Monday, November 15, 2010
Home Prices Stay Flat While Mortgage Rates Dip Again
The National Association of Realtors (NAR) reported that home prices stayed essentially flat in the third quarter compared to the same time frame a year ago. This price stabilization is encouraging, given that sales of existing homes in the period did drop compared to both the prior quarter this year and to the same quarter a year ago. Of course, both those time periods saw buyers rushing in to take advantage of the federal tax credits.
On the mortgage front, national average mortgage rates dipped again according to Freddie Mac's weekly survey. This was considered by most experts to be the result of the Federal Reserve's recent announcement of their second round of "quantitative easing," dubbed "QE2." This is the plan in which the Fed will buy up to $600 billion in Treasuries from now till the end of June next year. Not surprisingly, mortgage applications spiked up 5.8% for the week for both purchase and refinance loans, according to the Mortgage Bankers Association.
On the mortgage front, national average mortgage rates dipped again according to Freddie Mac's weekly survey. This was considered by most experts to be the result of the Federal Reserve's recent announcement of their second round of "quantitative easing," dubbed "QE2." This is the plan in which the Fed will buy up to $600 billion in Treasuries from now till the end of June next year. Not surprisingly, mortgage applications spiked up 5.8% for the week for both purchase and refinance loans, according to the Mortgage Bankers Association.
Monday, November 1, 2010
Marital Status is a protected class in Washington State
Did you know that marital status is a protected class in Washington State? Marital status includes being single, married, separated, engaged, widowed and divorced. In the City of Seattle and unincorporated King County marital status includes cohabitating.
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