The Gift that Keeps Giving

If you’re thinking about making a major real estate purchase in the New Year consider the benefits of having your own Buyer Representative lined up to help in your search. It’s a great feeling to know that you have a real estate expert who is legally

If you’re thinking about making a major real estate purchase in the New Year consider the benefits of having your own Buyer Representative lined up to help in your search. It’s a great feeling to know that you have a real estate expert who is legally obligated to you, who has your best financial interests at heart and who takes the client relationship very seriously. Formalizing an agent/client relationship through your Buyers Representation Agreement means that you have created a team approach to your transaction. Having the details of your relationship in writing in the Buyers Representation Agreement helps you understand what each of you can expect from each other. As a client you can expect superior service from your agent. Experienced real estate agents have handled hundreds of transactions over the years and acquire invaluable knowledge in every facet of the purchase process. Where most home sellers provide a portion of the real estate commission to be paid to the ‘selling agency’ your buyer representative fee will be paid by the seller. Sometimes when your Rep finds for you a property that is not currently on the market know that you will need to factor their fee into your purchase and sales agreement with that unrepresented seller. Working with your “Rep” with a buyer representation relationship gives you a team approach to your real estate acquisition helping insure you achieve the best possible home buying experience, what better gift!

Short Sales – Important to Housing Recovery

In 2007, as home sales began to decline, Congress passed the Mortgage Debt Relief Act which eliminated income tax on forgiven debt. Typical in a “short sale” where a seller owes more to their bank than their property is worth, lenders cut the homeown

In 2007, as home sales began to decline, Congress passed the Mortgage Debt Relief Act which eliminated income tax on forgiven debt.  Typical in a “short sale” where a seller owes more to their bank than their property is worth, lenders cut the homeowners principal balance to facilitate a sale rather than gaining title to the property through the foreclosure process.

 

The law has been critical to helping the housing industry begin and sustain its recovery.  The Act which was extended in 2010 is due to expire at the end of this year unless Congress acts between now and then.  Separate bills have been introduced in the House and Senate to extend the mortgage relief tax break for another year.

 

Where “short sales” equal nearly a quarter of all home sales, the elimination of these tax provisions would force millions more homeowners into foreclosure which would negatively impact the lender as well.  According to a spokes person from the Mortgage Bankers Association, the average price of a bank-owned home acquired by foreclosure in about $30,000 lower than a comparable home transferred in a short sale.

Housing Starts Soar

The National Association of Realtors recently released housing data indicates housing starts reached an 894,000 annualized pace in October, which is the highest in over 4 years and up 42 percent from one year ago.

The National Association of Realtors recently released housing data indicates housing starts reached an 894,000 annualized pace in October, which is the highest in over 4 years and up 42 percent from one year ago.

Even with this huge gain, further increases are needed. The 50-year historical average is 1.5 million per year. Now that household formations are increasing housing starts need to be at least 1.3 million just to keep the overall vacancy rates stable.

Multifamily starts made a larger gain of 57 percent compared to single-family starts, which increased 35 percent. Falling vacancy rates and solid rent gains have tipped developers to focus more heavily on new apartments.

The West region showed the biggest increase with a 73 percent gain. The northeast experienced a slight downturn over the month and only an 11 percent gain from one year ago. Since Hurricane Sandy was at the very end of October, the lower starts are attributed to market forces in the region and not yet related to the storm. A large overhang of shadow inventory still looms in New Jersey, New York, and Connecticut.

Housing starts are likely to reach 1.1 million in 2013 and then rise to 1.4 million in 2014. These levels will still be not enough to meet the rising housing demand. Shortage conditions are expected to continue for several years.