Tuesday, December 14, 2010

Financing Section of Purchase Contract

The Financing section was revised to obligate the buyer to take specific steps to obtain a loan and to clarify the financing contingency.
The Contract is contingent upon the buyer obtaining loan approval for the loan described in the AAR Loan Status Report without conditions no later than the COE Date. If the loan contingency is unfulfilled, the Contract is terminated. The buyer is obligated to deliver a notice of the inability to obtain loan approval to the seller or the escrow company no later than the COE Date. If the buyer fails to deliver this notice by the COE Date, the seller must give the buyer cure notice and a three-day opportunity to deliver the notice of the unfulfilled contingency. If the buyer fails to deliver the notice, the buyer is in breach for failure to deliver the notice, and the seller agrees to accept the earnest money as damages.

The Contract is cancelled for an unfulfilled contingency if, after diligent and good faith effort, the buyer is unable to obtain loan approval without conditions by the COE Date. The inability to obtain loan approval by the COE Date is not a breach of contract; therefore, the Cure Period does not apply to extend COE.

The contract is contingent upon an appraisal of the Premises for at least the sales price. If the Premises fail to appraise for the sales price, buyer has five days after notice of the appraised value to cancel the Contract or the appraisal contingency is waived. If the buyer is unable to obtain the loan and close escrow after waiving the appraisal contingency, the seller should deliver the cure notice to the buyer. If the buyer fails to close within the Cure Period, the buyer has breached the Contract and the seller agrees to accept the earnest money as damages.

The AAR Loan Status Report (“LSR”) must be attached to every offer and must have, at a minimum, the Buyer’s Loan Information section completed, describing the current status of the buyer’s proposed loan. The requirement that the LSR be attached to every offer does not necessitate that the buyer obtain pre-qualification from a lender prior to submitting an offer; the buyer can simply indicate on the LSR that the buyer has not yet had the opportunity to visit a lender.

Unless the buyer has previously completed the loan application and related actions, the buyer is obligated to complete a loan application, grant the lender permission to access buyer’s credit report, and pay all loan application fees within five days after Contract acceptance.

The buyer is required to sign all loan documents three days prior to the COE Date to allow the funds to be ordered and escrow to close as agreed. If documents are not available for signature by the COE Date because the buyer has not obtained loan approval, the loan contingency is unfulfilled and the Contract is cancelled. If the buyer has obtained loan approval but does not sign the loan documents within three days after receiving the cure notice, the buyer is in breach of contract and the seller may pursue the remedies for breach.

K. Michelle Lind, Esq.
K. Michelle Lind is General Counsel/Assistant CEO to the Arizona Association of REALTORS® (AAR). She serves as the primary legal advisor to the association. Michelle oversees AAR’s Risk Management Committee, which includes professional standards administration for twenty of the state’s local REALTOR® associations, and the development of standard real estate forms. She is the author of Arizona Real Estate: A Professional’s Guide to Law & Practice and a regular contributor to the Arizona REALTOR® and the Arizona Journal of Real Estate & Business. Please note that this article is of a general nature and may not be updated or revised for accuracy as statutory or case law changes following the date of first publication. Further, this article reflects only the opinion of the author, is not intended as definitive legal advice and you should not act upon it without seeking independent legal counsel

Monday, December 13, 2010

Home-sale activity was slow in Nov.

Housing-market activity slowed in November with both existing-home sales and foreclosures in the Phoenix area at their lowest level in more than a year, according to an Arizona State University report issued Friday.

There were 4,750 single-family, detached-home resales in November in Maricopa County, down from 5,350 resales a year earlier, the report said.

The median sale price in November was $134,000, down $9,000 from the November 2009 median of $143,000.

Foreclosure activity also slowed, to 2,095 foreclosures in November from 2,985 foreclosures a year earlier.
The slowdown was expected, the combined result of a recurring seasonal slump in home sales and recently lifted moratoriums on foreclosure sales by mortgage lenders, said the report's author, Jay Butler, associate professor of real estate at ASU's W.P. Carey School of Business.

The obvious influence of recent foreclosure bans and winter's typical market freeze only partly masks signs of a deeper market concern with potentially long-term effects, he said.

Thousands of residential real-estate investors are nervously awaiting the release of 2010 U.S. census data that will settle the question of whether Arizona's population is still growing, he said.

The U.S. Census Bureau is expected to publish that data in the next two months.

"There could be some gnashing of teeth come January or February," Butler said.

If the area's population has become stagnant, it could accelerate a shifting away of large-scale housing-investment firms from Arizona that Butler said already was under way.

Concerns that large segments of the Phoenix-area housing market have become saturated with rental homes already has spurred some investors to seek other opportunities in places such as the Midwest, he said.

The competition for residential tenants has intensified in recent months, Butler said, and holding on to existing renters has become more difficult.

Unless census figures reveal signs of growth, there is no reason to believe investors in rental homes would fare any better in 2011, he said.

"Without growth, you're just moving pieces around on the checkerboard," Butler said.

by J. Craig Anderson - Dec. 10, 2010 05:44 PM
The Arizona Republic

Friday, December 10, 2010

Phoenix area foreclosures hit 32-month low

Foreclosures across metro Phoenix plummeted to a 32-month low in November, but the decline probably is only temporary.

Big banks, including one of Arizona's largest lenders, put foreclosure proceedings on hold in recent months amid nationwide questions about how they handled the documents used to take back homes.

That move put the brakes on the region's ongoing wave of foreclosures.

But while the pause was a welcome reprieve for many struggling homeowners, real-estate analysts expect lenders to ramp up their foreclosure activity in the next few months.

Lenders usually foreclose through an auction process known as a trustee sale in Arizona.

Notices of trustee sales, so-called pre-foreclosures, dropped to 5,607 last month from 6,728 a month earlier, according to real-estate data company Information Market.

That's the lowest level of Phoenix-area foreclosures initiated in a month since March 2008, 33 months ago.

Actual foreclosures plummeted to 2,509, also the lowest since March 2008.

Most of the decline in last month's foreclosure activity is because of a two-month moratorium by Bank of America.

Before the moratorium, the lender had been foreclosing on 50 homes a day in the region.

BofA pushed back the trustee sales of more than 8,000 Phoenix-area homes to January or later during its moratorium, said Tom Ruff, analyst with Information Market.

That moratorium expired this week.

"BofA has two months of foreclosures to catch up on," Ruff said.

"That almost guarantees near-record foreclosures in the coming months."

During the past few days, BofA started foreclosing on Valley homes again.

Most people losing homes to foreclosure don't have to worry about having to move over the holidays.

BofA, as well as mortgage giants Fannie Mae, Freddie Mac, Wells Fargo and JP Morgan Chase, have said they won't enforce foreclosure evictions from Dec. 20 to Jan. 3.

Several national lenders announced moratoriums on foreclosures a few months ago, but Bank of America was the only one to include Arizona.

GMAC started the foreclosure-moratorium movement in late September when it decided to stop seizing foreclosure homes in some states so it could double-check its paperwork. JPMorgan Chase and PNC Financial followed with similar actions in those states.

The freezes followed accusations of "robo-signing" cases that involved mortgage-servicer employees signing hundreds of foreclosure documents a day without reviewing them or verifying that the paperwork was correct. A small number of foreclosures have been canceled or retracted due to the moratoriums.

Housing analysts have been concerned the delay in foreclosures by BofA will result in an oversupply of inexpensive foreclosure homes for sale in metro Phoenix during the first few months of 2011.

An oversupply could further drive down home prices, analysts believe.

by Catherine Reagor - Dec. 10, 2010 12:00 AM
The Arizona Republic

Friday, December 3, 2010

December Training Classes

Start Date Start Time Course Name
12/06/10 12:00PM Blogging 
12/06/10 11:00AM Impress Customers with Exceptional Service
12/06/10   2:00PM PEP Overview for Managers
12/06/10   9:00AM Target Marketing and Specialization
12/07/10 10:00 AM 21Online.com for Agents
12/07/10 12:00PM Going Green - Becoming an Eco-Agent
12/07/10   7:00PM Handling Expireds
12/07/10   7:00PM My C21 Site – Creating Your Online Presence
12/07/10   2:00PM Portraying a Professional Image
12/07/10   9:00PM Social Networking  Developing  a Business Plan
12/08/10   3:00PM Anatomy of a House
12/08/10   9:00PM Contact Management: Made Easy
12/08/10   3:00PM Recruiting Roadmap to Success
12/08/10   5:00PM Recruiting Top Performers
12/08/10 12:00PM Success Achieving
12/08/10   7:00PM The CENTURY 21 Listing Presentation
12/08/10   2:00PM Turning Around Situations Gone Sour
12/09/10   1:00PM Blogging 
12/09/10  2:00 PM eCampaigns
12/09/10   3:00PM PEP Overview for Managers
12/09/10   3:00PM Phenomenal Phone Skills 
12/09/10   4:00PM Regulatory & Environmental Issues in Real Estate
12/09/10   6:00PM Staying in Touch Means Repeat Business
12/10/10   2:00PM Contact Management: Made Easy
12/10/10   2:00PM Target Marketing and Specialization
12/10/10 12:00PM The CENTURY 21 Listing Presentation
12/13/10 11:00 AM 21Online.com for Agents
12/13/10   1:00 PM CREST EDG Class One
12/13/10   2:00 PM Listing Central: Marketing Your Listings Virtually  
12/14/10   1:00 PM CREST EDG Class Two
12/14/10    4:00PM FSBOs-Fastest Source of Business Opport.
12/14/10   3:00 PM Learning to Learn Online Using WebEx
12/14/10   2:00 PM Listing Central: Marketing Your Listings 
12/14/10    2:00PM Listing Strategies for Today's Market
12/14/10    4:00PM My C21 Site – Creating Your Online Presence
12/14/10    6:00PM Success Planning
12/14/10 11:00 AM Your Guide to CLS Online Training
12/15/10    1:00PM 21st Century Prospecting Techniques
12/15/10    2:00PM Attitude:  Persevere and Stay on Track
12/15/10   1:00 PM CREST EDG Reports
12/15/10    3:00PM Handling Expireds
12/15/10    3:00PM Listing Strategies for Today's Market
12/15/10    5:00PM Social Networking  Developing a Business Plan 
12/15/10 12:00PM The Power of Brand Marketing
12/16/10   1:00 PM CREST EDG Commercial Lease & Prop Mgmt
12/16/10    1:00PM Market Yourself as a Real Estate Expert
12/16/10 12:00PM Success Achieving
12/28/10 11:00AM Negotiating
12/29/10 12:00PM Pricing Your Listing to Sell