Utah Real Estate Tip – there are no “easy” transactions.

Utah Real Estate Tip – there are no “easy” transactions.

 
 

Real Estate Legal Tip – there are no “easy” transactions.

Some people say that when the market is hot, “I can sell my home myself,” or “I don’t need an experienced agent because it costs money,” or “how hard can it be?”

Curtis Bullock From the Salt Lake Board of Realtors® Writes 

I can tell you that after being an attorney in this industry for almost two decades, there are no “easy” transactions in real estate right now – even in this hot seller’s market. Selling or purchasing a home requires a unique skill set and knowledge base to ensure the transaction goes smoothly. If you have recently purchased or sold a home and felt like it was easy, it’s probably because your Realtor® was solving problems left and right behind the scenes without you knowing about it.

I’ve shared this before, but here is a list of potential trouble spots your Realtor® will help you avoid when purchasing or selling a home. I’ve seen most of these happen when a seller or buyer tries DIY’ing the purchase or sale of their home:

* Seller misunderstanding what “as-is” condition means.
* How to deal with multiple offers.
* Husband or wife didn’t sign the REPC. Causes dispute over validity of the contract.
* CC&R’s not given to buyer causing problems.
* Seller disclosure form not delivered to buyer by the deadline. Causing lawsuit.
* Buyer not reviewing the Commitment for Title Insurance.
* Seller not providing Buyer Agent with Commitment for Title insurance by the deadline.
* Double contract. Loan fraud.
* Not using the correct contract or disclosure form in the appropriate situation.
* Buyer’s receive the key prior to recording, funding doesn’t occur, dispute arises.
* Buyer moving from out of state on friday to Settle at title company, doesn’t fund until Tuesday (Monday is a holiday) and becomes upset.
* Confusion on how the Time Clause Addendum works. Causing a disagreement.
* Lease agreements not provided to buyer before seller disclosure deadline.
* Low appraisal. Buyer sends notice of cancellation but forgets to include the appraisal.
* Multiple offers. Seller puts the property under contract with two buyers at the same time. Dispute arises.
* Counter offer is not withdrawn before accepting another offer. Problem arises.
* 10 different addenda included with the REPC. Confusion as to what has been agreed upon.
* Subject to Sale contingency not satisfied causing a domino effect resulting in two cancelled contracts.
* Missing initials on one page of the REPC causing a dispute.
* Seller repairs not completed. What to do next?
* Not delivering a document by the deadline. Dispute arises.
* Mold in the home detected. Who is responsible? Can I cancel the contract?
* Termites or radon detected in the home. What do I do now?
* No legal access to the lot. Implied easement issue.
* $10,000 earnest money not delivered by the buyer on time. Major dispute arises.
* Money wired and lost due to wire fraud.
* Mechanics lien filed on home that was “recently remodeled.”
* Sloppy language in an addendum causing a dispute.
* Air conditioner doesn’t work.
* Conflict between what is on the MLS and what is in the REPC.
* Multiple offers disclosed without seller approval, prospective buyers back out.
* Seller decides not to sell a week before settlement. Seller default. Lawsuit arises.
* Buyer backing out after deadlines expires. Buyer default. Lawsuit arises.
* Dispute over who pays for the HOA transfer fee.
* Dispute over who pays for the HOA special assessment.
* After Settlement but prior to Funding & Recording, house is vandalized.
* Missing dates on the REPC.
* Can’t get the HOA docs.
* Language on the REPC crossed out causing ambiguity.
* Sections of the REPC left blank causing ambiguity.
* The wrong address listed on the REPC.
* Two addendum number 4 – causing ambiguity and dispute.
* Seller failing to disclose major structural problem with the home.
* Fair Housing issue created after buyer submits letter with offer.
* “TBD” filled in on the REPC in too many places causing uncertainty.
* Poorly filled out forms and contracts causing problems.
* Representing multiple buyers at the same time on the same property causing a conflict.
* Angry tenant when showing a property.
* Seller didn’t accurately fill out the seller disclosure form.
* Checking “Acceptance” on page 6 of the REPC, then checking “Counter” on Addendum #1 that was also included in the offer.

Hiring an experienced Realtor® will be the best money you spend this year.

Image may contain: sky and cloud, text that says'R KEEP CALM AND HIRE A REALTOR'
Courtesy of

Curtis Bullock
Salt  Lake  Board of Realtors®
Forbearance Numbers Are Lower than Expected

Forbearance Numbers Are Lower than Expected

Forbearance Numbers Are Lower than Expected

Forbearance Numbers Are Lower than Expected | MyKCM

Originally, some housing industry analysts were concerned that the mortgage forbearance program (which allows families to delay payments to a later date) could lead to an increase in foreclosures when forbearances end. Some even worried that we might relive the 2006-2008 housing crash all over again. Once you examine the data, however, that seems unlikely.

As reported by Odeta Kushi, Deputy Chief Economist for First American:

“Despite the federal foreclosure moratorium, there were fears that up to 30% of homeowners would require forbearance, ultimately leading to a foreclosure tsunami. Forbearance did not hit 30%, but rather peaked at 8.6% and has been steadily falling since.”

According to the most current data from Black Knight, the percentage of homes in forbearance has fallen to 7.4%. The report also gives the decrease in raw numbers:

“The overall trend of incremental improvement in the number of mortgages in active forbearance continues. According to the latest data from Black Knight’s McDash Flash Forbearance Tracker, the number of mortgages in active forbearance fell by another 71,000 over the past week, pushing the total under 4 million for the first time since early May.”

Here’s a graph showing the decline in forbearances over the last several months:Forbearance Numbers Are Lower than Expected | MyKCMThe report also explains that across the board, overall forbearance activity fell with 10% fewer new forbearance requests and nearly 40% fewer renewals.

What about potential foreclosures once forbearances end?

Kushi also addresses this question:

“There are two main reasons why this crisis is unlikely to produce a wave of foreclosures similar to the 2008 recession. First, the housing market is in a much stronger position compared with a decade ago. Accompanied by more rigorous lending standards, the household debt-to-income ratio is at a four-decade low and household equity near a three-decade high. Indeed, thus far, MBA data indicates that the majority of homeowners who took advantage of forbearance programs are either staying current on their mortgage or paying off the loan through a home sale or a refinance. Second, this service sector-driven recession is disproportionately impacting renters.”

There is one potential challenge

Today, the options available to homeowners will prevent a large spike in foreclosures. That’s good not just for those families impacted, but for the overall housing market. A recent study by Fannie Mae, however, reveals that many Americans are not aware of the options they have.

It’s imperative for potentially impacted families to better understand the mortgage relief programs available to them, for their personal housing situation and for the overall real estate market.

Bottom Line

If Americans fully understand their options and make good choices regarding those options, the current economic slowdown does not need to lead to mass foreclosures.

Are you Thinking About Selling? Sellers Are Returning to the Housing Market

Are you Thinking About Selling? Sellers Are Returning to the Housing Market

Sellers Are Returning to the Housing Market

Sellers Are Returning to the Housing Market | MyKCM

Get Your PEAR Report Today! (Professional Equity Assessment Report)

In today’s housing market, it can be a big challenge for buyers to find homes to purchase, as the number of houses for sale is far below the current demand. Now, however, we’re seeing sellers slowly starting to come back into the market, a bright spark for potential buyers. Javier Vivas, Director of Economic Research at realtor.comexplains:

“Seller confidence has been improving gradually after reaching its bottom in mid-April, and now it appears to have reached an important recovery milestone…After five long months, sellers are back in the housing market; while encouraging, the improvement to new listings is only the first step in the long road to solving low inventory issues keeping many buyers at bay.”

Even with the number of homes coming into the market, the available inventory is well below where it needs to be to satisfy buyer interest. The National Association of Realtors (NAR) reports:

“Total housing inventory at the end of June totaled 1.57 million units, up 1.3% from May,but still down 18.2% from one year ago (1.92 million). Unsold inventory sits at a 4.0-month supply at the current sales pace, down from both 4.8 months in May and from the 4.3-month figure recorded in June 2019.”

Houses today are selling faster than they’re coming to market. That’s why we only have inventory for 4 months at the current sales pace when in reality we need inventory for 6 months to keep up. But, as mentioned above, sellers are starting to return to the game. Realtor.com explains:

“The ‘housing supply’ component – which tracks growth of new listings – reached 101.7, up 4.9 points over the prior week, finally reaching the January growth baseline. The big milestone in new listings growth comes as seller sentiment continues to build momentum…After constant gradual improvements since mid-April, seller confidence appears to be reaching an important milestone. The temporary boost in new listings comes as the summer season replaces the typical spring homebuying season. More homes are entering the market than typical for this time of the year.

Why is this good for sellers?

A good time to enter the housing market is when the competition in your area is low, meaning there are fewer sellers than interested buyers. You don’t want to wait for all of the other homeowners to list their houses before you do, providing more options for buyers to choose from. With sellers starting to get back into the market after five months of waiting, if you want to sell your house for the best possible price, now is a great time to do so.

Why is this good for buyers?

It can be challenging to find a home in today’s low-inventory environment. If more sellers are starting to put their houses up for sale, there will be more homes for you to choose from, providing a better opportunity to find the home of your dreams while taking advantage of the affordability that comes with historically low mortgage rates.

Bottom Line

While we still have a long way to go to catch up with the current demand, inventory is slowly starting to return to the market. If you’re thinking of moving this year, let’s connect today so you’re ready to make your move when the home of your dreams comes up for sale.

Get Your PEAR Report Today! (Professional Equity Assessment Report)

The Beginning of an Economic Recovery In Utah

The Beginning of an Economic Recovery In Utah

The Beginning of an Economic Recovery

The Beginning of an Economic Recovery | MyKCM

The news these days seems to have a mix of highs and lows. We may hear that an economic recovery is starting, but we’ve also seen some of the worst economic data in the history of our country. The challenge today is to understand exactly what’s going on and what it means relative to the road ahead. We’ve talked before about what experts expect in the second half of this year, and today that progress largely hinges upon the continued course of the virus.

A recent Wall Street Journal survey of economists noted, “A strong economic recovery depends on effective and sustained containment of Covid-19.” Given the uncertainty around the virus, we can also see what economists are forecasting for GDP in the third quarter of this year (see graph below):The Beginning of an Economic Recovery | MyKCMOverwhelmingly, economists are projecting GDP growth in the third quarter of 2020, with 5 of the 9 experts indicating over 20% growth.

Lisa Shalett, Chief Investment Officer for Morgan Stanley puts it this way:

“Indeed, the ‘worst ever’ GDP reading could be followed by the ‘best ever’ growth in the third quarter.”

As we look forward, we can expect consumer spending to improve as well. According to Opportunity Insights, as of August 1, consumer spending was down just 7.8% as compared to January 1 of this year.

Bottom Line

An economic recovery is beginning to happen throughout the country. While there are still questions that need to be answered about the road ahead, we can expect to see improvement this quarter.

Why Foreclosures Won’t Crush the Housing Market Next Year

Why Foreclosures Won’t Crush the Housing Market Next Year

Why Foreclosures Won’t Crush the Housing Market Next Year

Why Foreclosures Won’t Crush the Housing Market Next Year | MyKCM

With the strength of the current housing market growing every day and more Americans returning to work, a faster-than-expected recovery in the housing sector is already well underway. Regardless, many are still asking the question: will we see a wave of foreclosures as a result of the current crisis? Thankfully, research shows the number of foreclosures is expected to be much lower than what this country experienced during the last recession. Here’s why.

According to Black Knight Inc., the number of those in active forbearance has been leveling-off over the past month (see graph below):Why Foreclosures Won’t Crush the Housing Market Next Year | MyKCMBlack Knight Inc. also notes, of the original 4,208,000 families granted forbearance, only 2,588,000 of these homeowners got an extension. Many homeowners have once again started to pay their mortgages, paid off their homes, or never went delinquent on their payments in the first place. They may have applied for forbearance out of precaution, but never fully acted on it (see graph below):Why Foreclosures Won’t Crush the Housing Market Next Year | MyKCMThe housing market, and homeowners, therefore, are in a much better position than many may think. Much of that has to do with the fact that today’s homeowners have more equity than most realize. According to John Burns Consulting, over 42% of homes are owned free and clear, meaning they are not tied to a mortgage. Of the remaining 58%, the average homeowner has $177,000 in equity. That number is keeping many homeowners afloat today and giving them options to avoid foreclosure.

While ATTOM Data Solutions indicates that there is a potential for the number of foreclosures to increase throughout the country, it’s important to understand why they won’t rock the housing market this time around:

“The United States faces a possible foreclosure surge over the coming months that could more than double the number of households threatened with eviction for not paying their mortgages.”

That number may sound massive, but it is actually much smaller than it seems at first glance. Today’s actual quarterly active foreclosure number is 74,860. That’s over 7.5x lower than the number of foreclosures the country saw at the peak of the housing crash in 2009. When looking at the graph below, it’s clear that even if the number of quarterly foreclosures today doubles, as ATTOM Data Solutions indicates is a possibility (not a given), they will only reach what historically-speaking is a normalized range, far below what up-ended the housing market roughly 10 years ago.Why Foreclosures Won’t Crush the Housing Market Next Year | MyKCMEquity is growing, jobs are returning, and the economy is slowly recovering, so the perfect storm for a wave of foreclosures is not realistically in the housing market forecast. As Odeta Kushi, Deputy Chief Economist for First American notes:

“Alone, economic hardship and a lack of equity are each necessary, but not sufficient to trigger a foreclosure. It is only when both conditions exist that a foreclosure becomes a likely outcome.”

While our hearts are with anyone who may end up in foreclosure as a result of this crisis, we do know that today’s homeowners have more options than they did 10 years ago. For some, it may mean selling their house and downsizing with that equity, which is a far better outcome than foreclosure.

Bottom Line

Homeowners today have many options to avoid foreclosure, and equity is surely helping to keep many afloat. Even if today’s rate of foreclosures doubles, it will still only hit a mark that is more in line with a historically normalized range, a very good sign for homeowners and the housing market.

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