RESOURCE CENTER REAL ESTATE GLOSSARY RENTALS

Kari Lundin
Coldwell Banker Burnet
7550 France Avenue S
Edina, MN 55435
(612) 290-5998

Are we at the bottom of the market? We could look at MAAR’s weekly activity report this morning for hints. Then again, these numbers are confusing. We might have more fun asking the Magic Eight Ball and getting the side of the floating triangle that says, “Who Knows?”

According to MAAR, the trend of pending sales being significantly above those from the same time a year ago continued.  In fact, sales were up a whopping 19.1 percent.

Of course, the tendency toward lender-mediated sales remains equally robust. Of the properties that received purchase agreements, 53.5 percent involved a bank at some level. What’s more, 41.9 percent were in the lower tier of pricing; being listed at $150,000 or below; usually first time home buyer territory.

The number of single family homes new to the market continued its downward trend, with new listings being 9.0 percent below last year’s mark.

This was not the case in the small multi-family home sector, however. New listings were up a staggering 265 percent. The silver lining in this news, however, is that while last year’s new listings were 80 percent lender mediated, the number of bank-involved properties during the same week this year dropped to 75 percent.

On the pending sales side of the duplex market, the surge continued. Forty-eight properties received purchase agreements; up 369 percent over the same week last year. Of these, 85 percent were lender mediated. Last year, all of the pended properties included a bank in the negotiations.

While the average sale price of the pended homes dropped from last week’s mark, so too did the figures for 2007.  The 2007 figure reflected an average sale price for duplexes of $130,270. This year’s mark was $105,560.

This week’s figures certainly send mixed messages. However, there does appear to be a leveling off of the number of short sale and foreclosure properties.

 

I took a Code of Ethics class last week which is required of all members of the National Association of Realtors (NAR).  While suffering through three hours of dry material, I was reminded of a pet peeve. I’m a REAL-TOR. Not a Real-I-Tor.

 

Yeah, yeah. I know. Everybody says “Real-I-Tor”; not just folks with Minnesota accents as thick as Marge Gunderson’s. I don’t know where it came from, I only know we don’t all say “Doc-I-Tor”, so it must not be a result of a consonant followed by “tor”.

 

While the mispronunciation is only a minor nuisance, I do want to offer the following clarification: not every real estate agent is a Realtor.

 

For an agent to use the title Realtor; a word which is, in fact, trademarked, an agent must be a member of NAR and adhere to that organization’s Code of Ethics. The code is a set of guidelines originally implemented in 1913 to establish a professional standard of conduct among members. The code governs a Realtor’s Duties to Clients and Customers, the Public, and other Realtors, creating the highest ethical standards for agents in any transaction. Real estate agents who are not members of NAR are not held to the same high ethical standards and rules of conduct, nor the organization’s measures for enforcement.

 

The next time you need help with a real estate transaction, be sure to ask your agent whether he or she is a Realtor.

In today’s real estate market, many buyers are alarmed when they see the words “as is” in an MLS listing, or are asked to sign a corresponding addendum as part of the purchase agreement. In their minds, “as is” translates to a Pandora’s Box of problems and surprises that they have no right to know about until they own the property.

 

But they’re wrong.

 

Generally, buyers see this phrase in three situations. First, the property is bank owned. As the banks employees have never lived in the property, and in all likelihood have never even been in it, they have no knowledge of a history of water in the basement, leaking roofs or ice dams.

 

The second usually occurs when the property is an estate. In that case, the seller has passed away, and the property is being sold by his heirs. Now, the kids might remember dad saying something about a roof leak in the duplex a while back…but was it in 1998 or last year? In other words, they may be able to remember some things, but probably not to a legal certainty.

The final situation may occur when a seller simply doesn’t want to make repairs or vouch for the condition of the building.

 

If a buyer decides to purchase an “As Is” property, he still has the rights to review a Truth-In-Housing Report (if required by city) and to hire an inspector for a thorough going over. In the event something troubling is found, he may then either ask for it to be repaired or attempt to renegotiate the price.

 

It is important to remember when contemplating the purchase of an REO property that banks are in the money business, not the home repair business. Most of the time, they will opt for a price reduction.

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