New resource from Mortgage Bankers Assocation

The Home Learning Center...totally unbiased I'm sure.

Spokeswoman for Zillow

I saw Mary Umberger's May 20th column...

I'm breaking my self-declared moratorium on writing about Zillow.com, the online home-valuation service.

I hadn't noticed the moratorium.

Sneaky, sneaky developers...

I had a Seller's attorney try something I have never seen attempted before in the context of a residential real estate closing. Seller wanted to split out the cost of a condo between real property and personal property. This was a new condo conversion where there were significant upgrades. Our Buyer's lender didn't allow it but pretty shady. Any thoughts? They only wanted it changed on the HUD-1.

Behind the scenes I think they wanted to cut some separate funds to a construction company rather then take all the income in a lump sum.

How 'bout 9 weeks to evict Sheriff Dart...

They may tell you 2-6 weeks to get someone evicted by the Cook Sheriff but it's not true. We just got one completed that took NINE WEEKS! Just FYI.

Why do people like big houses?

Saw the below...not suprising, but what drives this trend? Is it purely peer pressure, materialism? It really isn't rational is it? Energy costs, smaller families, ect. The land is where value is anyways not the home/structure.



BIGGER HOUSES, SMALLER FAMILIES

WASHINGTON (Associated Press) – One in five American houses had at least four bedrooms in 2005, according to a report released this week by the U.S. Census Bureau.

That is up from one in six in 1990, despite shrinking families and increasing costs for construction and energy. Nationally, the average household size has shrunk slightly since 1990 to about 2.6 people. Meanwhile, the average new house grew to 2,434 square feet, nearly a 400-square-foot increase.

Utah leads the nation with nearly 40 percent of homes having at least four bedrooms. Next are Maryland, Virginia, Colorado and Minnesota. At 12.6 percent, Arkansas had the smallest share. Texas came in at 18.9 percent, up from 11.9 percent in 2000.

For more information on the national trend toward extra-large houses, read the Tierra Grande article "McMansions."

Problems at First American Title Loop...

Just when I was starting to be impressed by some of the upgrades and technology changes that First American had made, we had two closings last week where they didn't close until the next day. Granted, that happens and it's not all on the title company...end lenders likely deserve as much or more of the blame.

My bigger problem was that our attorney fee checks from these two closings could not be deposited immediately. For whatever reason the funds were not available. No big deal for us we just deposited them a day later but if you're in a back-to-back closing situation this could be a REAL BIG PROBLEM!!

April existing home sales

Here's a piece about April existing home sales from the National Association of Realtors. Here's NAR's release. One bit of local good news...The Midwest suffered the least damage. Sales there declined 0.7 percent and prices rose 1.9 percent from a year earlier to $166,600.

At our law firm, we have a steady flow of contracts coming into the office...mostly mid-priced (150k to 300k) condos.

FTC report on competition in real estate

Here's a link to the press release regarding the Federal Trade Commission's study on “Competition in the Real Estate Brokerage Industry.”

Bank of America no fee mortgage

A post on Bank of America's no fee mortgage program.

Home destroyed while under contract to be sold...what to do?

Interesting question on a real estate list serve I'm on:

Seller enters into contract for sale of vacant house, in need of repairs. Water pipes burst and house is almost destroyed. Seller has replacement insurance and now house is repaired to pristine condition. House is now worth 4 times sales offer. Buyer wants the house under original contract terms. Seller wants fair market value. Is this a reason for Seller to breach the contract and cause Buyer to pay fair market value. Has anyone represented anyone in such a situation?

Answer??

I forgot to mention the Vendor and Purchaser Risk Act. That would clearly leave the parties in the same position as when the contract was signed. Buyer wins.

What if the reverse occurred and the property went down in value? Then seller wins.

I've never had this situation but if you look at your form contracts they do always reference that Uniform Vender and Purchaser Risk Act.

Realtor demographics

Saw this nugget from NAR:

SURVEY CHARACTERIZES REALTORS

WASHINGTON, D.C. (National Association of Realtors) – A recent member survey by the National Association of Realtors (NAR) found that Realtors work mostly on commission and earn more over time. Among the findings:

**Median income was $47,700 in 2006, down from $49,300 in 2004. Members licensed as brokers earned a median of $73,700 last year, while sales agents earned $34,600.

**Men earned a median income of $58,600 in 2006 and were more likely to be brokers, while women earned $42,000 and were more likely to work part time.

**Realtors in the business for two years or less earned a median income of $15,300, while those with three to five years of experience earned $44,200. For six to 15 years, the median was $64,600, while members in the business for 16 or more years earned $76,200.

**Nearly six in ten NAR members are women.

**Five percent are younger than 30 while another 6 percent are 30 to 34 years old; 12 percent are 65 or older.

**Most Realtors hold a sales agent license (63 percent), followed by a broker’s license (22 percent), broker associate (16 percent), and appraiser license (3 percent). One percent hold some other kind of license.

**One quarter of all business is from referrals or repeat business from previous clients.

**Seven out of ten are compensated through a split commission arrangement, 17 percent receive a full commission and another 3 percent receive a commission plus a share of profits.

**Only 10 percent work fewer than 20 hours per week and 30 percent work 20 to 39 hours per week, while 15 percent work at least 60 hours per week.

**Eight out of ten brokers report their primary business specialty is residential brokerage.

**Nine out of ten members report their firms have websites, and 61 percent have personal websites.

**Half of all members communicate with their clients by e-mail more than 50 percent of the time.

For information on other findings, visit www.realtor.org.

Urban quiet?

Saw this piece about the steps a Manhattanite has taken to make his home quiet. I empathize...I live amidst too much urban noise!

Earth to Ben Bernanke

Saw this piece here with comments from the Fed chairman about the "limited" impact of the subprime mortgage environment on the housing market and the economy in general. Isn't that nuts?

I think it's the main reason why there continues to be the housing malaise. Thoughts? That's my view...I thought early in the spring things were coming around and the subprime stuff hit and now we're still teetering.

Appraiser abuse

Sort of your "typical" mortgage appraiser abuse story here. I must say I don't have much to do on the appraisal front other than making sure client's funding is getting approved ect. But this is getting more scary when I'm seeing the articles about just fake appraisers inflating prices, ect. Perhaps we should start at least doing a basic license look-up.

Uptown anyone?

Good overview of gentrification happening in Uptown. We've worked with people buying here...there have been some good deals. When I have friends moving in from out of town I say Rogers Park, Uptown or Southshore to get a decent deal on the lake...of course I'm not a Realtor nor have I ever lived within the City limits either.

Condo board Q & A

Here's a good Q & A with local attorneys regarding association issues.

Subordination, Non-Disturbance, and Attornment Agreement??

I asked what the heck the above was because it showed up on a title insurance commitment...now we now (and look, he's a blogger too!)

Peter:

The Subordination, Non-Disturbance and Attornment Agreement ("SNDA") is an agreement between a tenant and a landlord's lender (and sometimes the landlord itself) that typically (a) subordinates the priority of a lease to the lien of a mortgage, (b) provides that, so long as the tenant is not in default under the lease at the time of a foreclosure, the lender will not seek to terminate the lease by means of the foreclosure by naming the tenant as a party to the foreclosure, and (c) provides that, in the event of a foreclosure, the tenant will recognize (or attorn to) the lender as the new landlord under the lease (in some states a foreclosure gives a tenant the right to walk from its lease). SNDAs are seen typically in commercial transactions, particularly for larger tenants but sometimes for tenants of all shapes, forms and sizes.

If you want to know more, feel free to contact me.

--David

David G. StejkowskiStejkowski & Zaffere LLCThe Powerhouse Building211 North Clinton StreetChicago, Illinois 60661312.373.7240 (main)312.373.7242 (direct)312.212.5557 (facsimile)dstejkowski@sandzlaw.com
realestatelawyer@aol.comwww.sandzlaw.com

The Dirt Lawyer's Blog: dirtattorney.blogspot.com

Best places to live

Saw this piece in the New York Times a couple days back. It sketches the guy/company who collects much for the data for the "Best Places to Live" lists. So it's all just statistics...no one goes anywhere nor are residents surveyed. So don't be offended if you're in Kankakee and you're not ranked too high!

Staffless lawyers

Isn't it annoying to work with lawyers without any administrative support staff? Now this is more of a law firm management issue, but I post here because I find it most common with lawyers who work primarily in residential real estate. I've had a good number of transactions of late with these sort of offices and to be honest these people aren't giving good service to their client, real estate agents (if applicable) or their opposing counsel. Agree? And yet it seems like some of these people are getting tons of referrals from agents.

I would mention a couple things...first, at a broad level a lawyer is very much in a general customer service business. It's a service business of giving consultive advice to people. The basics of getting phone calls answered and returned, ect. are critical. Second, and more directly related to residential real estate transactions, obviously this varies by the transaction but a residential real estate deal is what, 50/50 legal work vs. "massaging logistics". The staffless lawyer can certainly handle the 50% of legal work, BUT, he/she does very poorly on the 50% "massaging logistics." I've had 2-3 deals over the last couple months where closings were threatened/delayed because of these types of laywers. Just my $.02 to be aware of and my very frank advice of lawyers you should be avoiding!!

Real estate in the media

Just a couple nuggets I saw in the news you might find interesting:

Inspiring tale here about a south-side handyman who's built up a nice little real estate business with some 200+ units.

And an interview here with the CEO of CB Richard Ellis.

Evictions in Cook County

Is there a reason we can't get a tenant evicted when we placed the Order of Possession with the Cook Sheriff SIX weeks ago? This is the slowest one yet. Can anyone report a good experience with the Cook Sheriff? As a civil attorney, between slow evictions and a nearly 75% failure rate on service of process on Defendants, I don't know what they do effectively. There's a price for one party government I guess.

Question...

Got this unsolicited e-mail:


I just purchased an investment property. The paperwork I received at closing from the previous landlord shows that my tenant did not pay a security deposit. The tenant claims she paid a security deposit to the old landlord. Am I responsible to pay her for the security deposit and go after the old landlord or does she have to go after the old landlord?

I don't know the answer. A teaching point, a buyer (and his lawyer) of a rental property needs to get the security deposits as part of the transation. Off the top of my head I think the buyer above may be on the hook.

Softening in commercial market too?

Good piece on commerical real estate.