New Housing Bills

Take a look at the Housing Bill passed in the House yesterday and expected to pass Senate today or tomorrow and the President has suggested he'll support...here's a nice overview.

Couple tidbits...new tax deduction for first-time home buyers of $7.500 or 10% of the purchase price, whichever is smaller. Also, a new $500/$1,000 tax deduction if you're a homeowner who takes the standard deduction.

Interesting Market Analysis from Zip Realty CEO

My Recent Experience Representing a Foreclosure Buyer

I think this was my first experience representing a purchaser of property buying from a bank who now owned the property following a foreclosure. It was a good learning experience and surely different that a "typical" residential real estate purchase...

My client found the property she ended up buying on BidSelect, a Website that seems to focus on selling foreclosed properties. On its face it's a listing of properties like any other brokerage. However, when she wanted to place a bid, she had to get a real estate agent who had some code that allowed the agent to actually place the bid.

There were two periods where there was more waiting than a normal transaction. First, once the online bid was made it was around 10 days before you got a response. Then once there was this online acceptance, my client's real estate agent had to send a written offer with a standard real estate contract and Fannie Mae's contract addendum to the management company who formally accepted the contract on Fannie Mae's behalf.

Fannie Mae's contract addendum DID include an inspection contingency...my client had 10 days to do an inspection and potentially reject the property. I doubt any repairs would have been done.

Once my client did get approved by her lender the closing proceeded fairly typically. We closed at First American Loop. The Seller's attorney was one of the big Chicago area foreclosure law firms...they were fine. The problem was the Seller's real estate broker as I wrote about previously here.

All in all I'd recommend this route of purchase (the Chicago area property was under $75,000 for a 4 bedroom house) with one caveat...be prepared to risk your earnest money. In my transaction my client did start to have cold feet and I gave the notice required pursuant to the property inspection period to get out of the deal. Yet it was nearly impossible to get anyone at First Preston Management (Fannie Mae's rep.) on the phone. My client subsequently changed her mind but an earnest money return didn't feel likely.

Employer Assisted Housing

For some reason I didn't see this item get through the General Assembly...the state approved a law giving employers a tax credit of 50 cents for every dollar they invest in Employer Assisted Housing (EAH). Here's the piece from the Christian Science Monitor. If you really want to encourage your employees investment in the community this might be something to consider.

Fannie, Freddie, and You

Now that's a fun group, right?

An interesting article in the Times explaining how the recent troubles of Fannie Mae and Freddie Mac might impact the average home buyer or person with some average mutual fund investments. Has anyone ever really understood what the Fannie and Freddie do? And what's the difference between the two? Read he article...

The impacts seem to be expected higher mortgage rates longer term and if any funds you own are invested in the two companies they may have taken a hit.

Joliet "Blossoming"

Interesting overview piece in today's Tribune entitled Joliet blossoming into the place to be. It seems Joliet just passed Naperville to move into the 4th position in city rankings in the Land of Lincoln. Take a look at the piece. Joliet's one of those older communities with a gritty reputation but it definitely has some upside. It has a very distinct downtown with a Metra stop and the Des Plaines River right there. Sounds like there are some good deals.

I'm not with the Chamber of Commerce or anything but my first lawyer job post law school was in the South Suburbs and I'd get to Joliet about once a week for Will County Court work...very nice court to practice in by the way. I'm not a NASCAR fan but there is that minor league baseball team and I am a fan of the I & M bike trail...one of the best in the area.

Tales from the Closing Table

We've all had our slow closings before for many reasons....slow wiring of funds, Seller/Lender slow in submitting figures to the title company or submitting wrong figures which then take time to be corrected, lender's loan processor goes to lunch during the closing and isn't available to give approval to cut checks, Buyer did a walk-thru the morning of the closing and there was water coming through the ceiling from the unit above, ect., ect.

I think the good real estate attorney, lender and agent simply have prepared clients for these potential events and then it's no big deal. Go grab lunch and perhaps the deal will have funded in a couple hours; don't have your stuff on a moving truck!

I ran into a new one yesterday and perhaps the dumbest reason yet for a 5+ hour closing. The Listing Real Estate broker was slow in WALKING over the earnest money overage that had to be included in my client's escrow. Seriously! 11am closing was a little slow for various reasons but by about 1:30 pm everything was ironed out and we call this listing broker and they say the money is in route (title company and broker are within 3/4 blocks of one another). Apparently they sent it over with some commercial messenger service who likely had many other deliveries. Well, at 5:20pm I got a call from our closer saying she'd gotten the earnest money check and the deal was closed.

And we were waiting on a check for $107. After the buyer's agent and listing agent's split the commission the listing agent's commission was just less than the $1,000 commission. So instead of the "normal" situation where the listing agent keeps the interest money towards its commission here they had to bring part of it back.

Our 6 hours wasn't worth that $107...nice work!