No deposit? Amend the agreement

True or false: Deposits are essential to bind the parties to an agreement of sale. And the answer is true and false, sort of.

A deposit is not essential to create a binding agreement. Even without a deposit, the buyer has a right to enforce the agreement of sale by suing for specific performance. Likewise, a seller has the right to sue a breaching buyer, even one who has paid no deposit, for the full purchase price. That is, unless the seller has agreed to limit his remedies upon buyer default, which is clearly what most sellers do when they sign the PAR agreement.  When listing agents allow their sellers to sign agreements with a checkmark in the box limiting their sellers’ remedy to deposits paid, they have done just that. Why?  Well that is a story that will fill another article.

 

While not a legal necessity, a deposit is what holds the buyers feet to the fire. For that reason it is standard fare in the real estate community.  Many of you have never seen an offer that is not accompanied by a deposit. Or have you?

Modern practice makes liberal use of the email transmission of offers and of acceptances. The problem is that while technology may permit payment via the Internet, it is not happening with respect to deposits. Instead, the agreement of sale may be passed electronically, signed electronically, or printed, signed and scanned. The deposit check will then follow hours or days later.

The problem is that the signed agreement of sale likely provides for a deposit “at the signing” of the agreement. It has not!  And this creates risk for all.  Risk to the seller that the buyer will walk before the deposit is tendered, in which case the seller has recourse if that box is checked in the default clause. Keep in mind that the liquidated damage clause provides that the seller may retain sums “paid” (past tense). Because it provides that seller may keep sums paid and not sums that should have been paid, the seller gets nothing.

And there is risk to the listing agent who allowed her seller to accept an agreement that clearly states that a deposit was paid at the time of signing when it was not. And risk to the buyer agent whose deal is now unraveling. Additionally, the buyer and listing are at risk for disciplinary action by the Real Estate Commission because they allowed their clients to sign a contract clearly stating that the deposit has been paid when it has not. And yes, licensees have been prosecuted for this very offense.

Avoidance is easy. If the deposit does not accompany the offer, amend the agreement to show that the deposit is to be paid in the future on a date certain or within a specified time. Amending the agreement necessitates the additional step of having the revision initialed by all parties. The problem is more easily avoided when buyer agents draft the agreement accurately to begin with.

By James L. Goldsmith, Esq

Latest New Home Sales

In each Economic Update, the Research staff analyzes recently released economic indicators and addresses what these indicators mean for REALTORS® and their clients. Today’s update discusses new home sales.

• New home sales fell sizably in July. The latest figure of 394,000 (annualized sales rate) is 13 percent below the prior month’s level, though still up from one year ago.
• New home sales measure contract signings and not closings. By contrast, existing home sales released earlier in the week,  which had spiked upward to the highest level in 4 years, measures closings. The fact that contract signing is coming down on new home sales likely reflects higher mortgage rates. Another factor is the still very sluggish level of new home construction. Simple math of low new home construction means fewer new home sales. This is reflected in essentially 50-year low inventory levels, as even falling new home sales is not leading to any measurable gains in unsold inventory.
• Meanwhile, the median price of a new home rose by 8.3 percent from one year ago. Tight inventory and higher construction costs are pushing up prices. The gap between new home price and existing home price is still abnormally high. Therefore, there is still further room for existing home prices to catch up.
• The prospect for new home sales is still up, despite the latest month’s tumble. The reasoning is simple. There is a broad housing shortage. Only homebuilders can genuinely relieve the inventory conditions. Whatever builders are building are selling, despite again the one month hiccup. Therefore housing starts will rise over the next two years for sure. More new home construction, then naturally, more new home sales. The only bottleneck at the moment is the difficulty of obtaining construction loans. 

by: Lawrence Yun

Renovate Your Kitchen for Under $1,000

Get the Look for Less

Want to redo your kitchen without breaking the bank? "It is possible to give your kitchen a whole new look for much less money," says Nikki Trivisonno, president of the Ohio State Chapter of the National Kitchen & Bath Association. "But you have to be willing to make some compromises."

Start by updating the color and reducing clutter then add new hardware, fixtures and a backsplash. You'll go a long way toward stealing the high-end look you crave. 

Replace the Hardware

"Hardware has a really big impact on a kitchen's style, so changing it is a great way to freshen up the look of your kitchen," says Trivisonno.

For less than a couple hundred dollars and just a few hours of work, a homeowner can swap out every handle and knob in the kitchen. Styles range from contemporary to rustic to traditional. Finishes come in ultra-popular oil-rubbed bronze or easy-to-clean polished chrome. To make installation a breeze, Trivisonno suggests that homeowners bring along an old drawer pull when shopping to make sure the new hardware matches the holes of the previous set.

Depending on the style and finish of the hardware and the number of drawers and cabinets, the average kitchen can be completed for as little as $150. 

Replace the Faucet

Fixtures are the jewelry of the kitchen, and the kitchen sink is often the focal point of the room. Investing in a new faucet is a simple and cost-effective way of giving the whole room an updated look. Like cabinet hardware, faucets come in a wide range of shapes, styles and finishes, making it easy to match the decor of the room.

Kitchen faucets come in single- and double-handled models and can include a separate pull-out sprayer, requiring an additional slot. Match the new faucet footprint to the old to save hours of frustration and quite possibly the cost of a brand new sink. 

Install a Stainless Steel Laminate Backsplash

"For a really clean, contemporary look, a homeowner can easily install a stainless steel laminate backsplash," says Trivisonno.

Capped with a thin layer of stainless steel, copper or aluminum, metallic laminate sheets can be used as countertop backsplashes, as appliance covers and for the wall area behind the cooking range. And because they install with little more than a few dabs of panel adhesive, the job is easy enough for any do-it-yourselfer.

A properly sized metallic laminate panel affixed to the face of a refrigerator or dishwasher can modernize its look for a tiny fraction of what a new appliance would cost. 

Add a Ceiling Fan

When shopping for a fan, look for the Energy Star Label, which means the product has met the U.S. Environmental Protection Agency's energy-savings standards. Experts say an energy-efficient fan can save up to 40 percent on summer cooling costs and up to 10 percent in the winter. In other words, they're well worth the effort to install. They'll keep your kitchen cool and provide a new visual element to your space.

By Douglas Trattner

HGTV.com

9th Annual Golf Outing on September 23, 2013

March 1, 2013 changed the course of normal for the Moyer family of Pennsburg, PA.  One of their  9 year old triplets, Rachel Moyer, was diagnosed with Acute Myeloid Leukemia (AML). AML is a cancer of the myeloid line of blood cells, characterized by the rapid growth of abnormal white blood cells that accumulate in the bone marrow and interfere with the production of

normal blood cells. 

Her immune system can not be compromised and the chemo therapy makes her weak.  A bone marrow transplant is being scheduled for this August. 

Rachel spends the majority of her time in the hospital. Her parents are continually making visits as well as spending a lot of money on medical bills. This makes it extremely difficult on the entire family including their other 5 children.

Keller Williams 9th annual  golf outing that will benefit the Moyer family, will be held on September 23 at Cedarbrook Country Club in Blue Bell, PA. The Event includes 18 holes of golf, lunch, dinner, raffle, closest to the pin, longest drive, and other activities. Registration and lunch begin at noon and golf shot-gun start is set for 1:00pm. Dinner and raffle to follow. Cost for the entire day is $165 with all proceeds going to the Moyer Family.  Please join us for a day filled with great food, prizes and a tremendous golf course.  Buffet Dinner tickets are available for a cost of $65.  If you own a business and would like to sponsor a hole, please contact me.  All checks should be payable to “KW Charity Golf Outing”. 

For further information call Dan Smith at 215-631-1903 or

e-mail: DanielSmith@KW.com

What are homebuyers willing to give up to be near a good school?

Three out of 5 home buyers surveyed by realtor.com said school attendance boundaries would be a factor in choosing a home, and most of that group said they’d be willing to go above budget or give up amenities to have their children go to their school of choice.

The online survey, conducted July 18-22, found that of those who said school attendance boundaries were important:

• 23.6 percent would pay 1 to 5 percent above budget.
• 20.7 percent would pay 6 to 10 percent above budget.
• 9 percent would pay 11 to 20 percent above budget.
• 40.3 percent would not go above budget.

Many who said school boundaries would affect their home buying were willing to give up amenities to live within their school attendance boundaries of choice, including:

• 62.4 percent would do without a pool or spa.
• 50.6 percent would give up accessibility to shopping.
• 44 percent would pass on a bonus room.
• 42 percent would offer up nearby parks and trails.

“Our survey demonstrates the large impact school boundaries have on those looking to purchase a home,” said Barbara O’Connor, chief marketing officer at Move Inc., in a statement, noting that realtor.com in April rolled out new mobile school search functionality allowing users to search for listings in specific school attendance zones and school district boundaries.

“This data shows how compelling this new feature is to consumers and the impact it has on their home purchase experience.”

O’Connor said realtor.com will be launching a section on the site focused on back-to-school tips, which will provide more information to help those whose housing decisions are influenced by school boundaries.

Other sites offering similar school attendance boundary search capabilities include Century 21, Trulia, Estately and Redfin, which, like realtor.com, license school boundary data from Vermont-based geographic information systems data provider Maponics. Zillow also licenses data from Maponics and displays school attendance boundaries, but users cannot search for homes by school.

The San Francisco Chronicle has reportedthat buyers may read too much into simplified school rankings offered on real estate sites, paying premiums of $200,000 or more for homes served by schools that score only slightly better than other schools in the same school district. School district officials in San Mateo County, Calif., say real estate professionals are part of the problem, because they rely on test scores and school ranking sites to help sell homes. They’re working with Realtors in the hopes of helping them gain a better understanding of what qualities make for a good school.

 Source: Inman News

5 Home Renovation Projects With Good Return on Investment

 By: Jerry Kronenberg

 

Spring is a popular time for home-renovation projects, but a recent study by Remodeling magazine and the National Association of Realtors found that not all upgrades are created equal when it comes to reselling your place.

"I always recommend making very wise use of your remodeling dollars to get a good return on investment," says Judy Moore, a Boston real estate agent and a National Association of Realtors board member.

"If I walk into a house that has and old kitchen or an old bathroom that needs a ton of work, that might be a problem to sell 'as-is,'" she says.

Here's a look at the five best projects Remodeling found offer the best nationwide average returns on investment.
Putting in a steel front door
Projected return on investment: 85.6%

Moore says this inexpensive fix (estimated cost: $1,137) can improve your home's energy efficiency while making a good first impression on house hunters. "The doorway is very important because it's the first thing buyers go through to enter the home," she says. "If your home's front door is in bad shape and paint won't fix it, it makes sense to install a new one."

Installing fiber-cement siding
Projected return on investment: 79.3%
"Fiber-cement siding is a very popular product on new-construction homes because it's very low maintenance, it doesn't need painting for quite some time and it insulates a home well," Moore says. And while Remodeling predicts you'll spend $13,083 installing 1,250 square feet of prepainted fiber-cement siding and trim, Moore says the job will add to your home's curb appeal -- especially if you live in a cold-weather locale. "Siding is one of the first things to go in [cold climates] because of the weather," she says.

Adding a wooden deck
Projected return on investment: 77.3%
Moore says she's noticed house hunters favoring decks to entertain at home. "Decks are just a great way to enjoy your home," she says. Remodeling calculates that installing a 16-by-20-foot wooden deck with posts, railings and a built-in bench and planter will set you back $9,327.

Garage-door replacement
Projected return on investment: 75.7%
Moore says this upgrade can really boost curb appeal -- again, particularly in cold climates -- even though Remodeling estimates the job costs only $1,496. "Water and snow and things bouncing up from the driveway can easily rot garage doors," she says.

Minor kitchen remodel
Projected return on investment: 75.4%
Study authors defined this job as repainting trim and replacing the kitchen stove, oven, wallpaper, flooring and cabinet/drawer doors and handles (but not the cabinet/drawer interiors).
Remodeling estimates all of that costs $18,527, but Moore says the price is worth it if your kitchen needs work. "If the rest of the house is really nice but the kitchen is a disaster, you're going to get much less for house than you deserve," she says.

Why Your Perfect Home Needs Central Air

When you find your dream home, things just click. The closets may be a bit too small, the AC may come from window units instead of a central system and maybe there's no full-time guest room ... But the place just has that magic.

Still, it pays to think about those shortcomings, which could make it harder to sell when you're ready to move on in a few years. To some extent, the housing market is a fashion industry, and today's styles will sell better than yesteryear's.

A study by the National Association of Realtors says central air conditioning is the most critical of 33 features surveyed, with 65% of those polled rating it very important. So if the home doesn't have it when you buy, think about putting it in. You'll enjoy it and will find it easier to sell for the price you deserve.

Among other highly desirable features: new kitchen appliances and a walk-in closet in the master bedroom. Buyers also preferred homes that were less than five years old, which might surprise those who believe in old-time craftsmanship. The fact is, newer homes are better insulated, have safer wiring and are built to withstand winds that would blow older homes apart.

Not surprisingly, buyers would prefer choice sites such as those on the water. They want basements, and many look for a home with an in-law suite. (Of course, that doesn't mean the in-laws will move in. The suite can serve a grown child who's slow to launch, or function as a better-than-average guest quarters.)

Most buyers still want a traditional living room, even though modern life seems to gravitate to the great room.
Asked what they were willing to spend more to get, a majority of buyers said: a laundry room and den/study/office/library.

Many buyers who were satisfied with their home said they would still like more and bigger closets and a larger kitchen. In fact, 47% of recent buyers undertook a major kitchen improvement quickly, and almost as many upgraded a bathroom.

Of course, buyers' demands vary by region and demographics. In the south, as one would imagine, air conditioning is especially important. And older buyers are more likely to prefer single-story homes.
Obviously, there's no simple rule about what will appeal to a future buyer. But today's shopper would be wise to visit a wide range of homes, not just a few suggested by the real estate agent, to get a sense of the styles popular in the community.

Builders have a pretty good sense of what buyers in the area want, so tour some open houses in new developments. If new homes offer stainless steel kitchen appliances, dedicated laundry rooms, finished basements and bedroom-sized closets, you can bet that future buyers will demand those features -- at a minimum.

Keep in mind, though, that many major home improvements don't add as much value as they cost, so it's probably not a good strategy to buy a substandard home and plan to upgrade just before selling. Get a home that has the features other buyers value, or put them in quickly so you can enjoy them yourself before selling.

By: Jeff Brown