If 2009 was the year of economic recovery, 2010 will be the year of growth. Thanks to solid gains in the lower end of the housing market, the first-time home buyer tax credit, and the rebounding stock market, lenders in mid–2009 began cautiously lending money beyond the safe Fannie Mae, Freddie Mac, and FHA loans on which they relied for income during the credit crunch.
An Iowa appellate court ruled that a broker is entitled to his commission in a failed short sale of a warehouse because the lender acted in bad faith by waiting until closing to demand a larger share of the proceeds.
The Idaho Supreme Court has ruled in favor of a real estate broker whose commissions totaling nearly $1 million were in jeopardy after a developer claimed that the listing agreements were invalid due to insufficient property descriptions.
Banks are looking for more money down and better credit scores—exactly the opposite of what many households are capable of bringing to the table because of the struggling economy. That puts real estate practitioners who are familiar with rent-to-own transactions in the perfect position.
A New Jersey court ruled that a seller, who had entered into an exclusive right-to-sell listing contract, doesn't have to pay the commission on a transaction that closed after a protection period on the agent's agreement expired.
The U.S. District Court for the Northern District of Alabama ruled that a brokerage that charged an administrative fee in addition to its commission violated section 8(b) of the federal Real Estate Settlement Procedures Act.
A district court in Indiana ruled against a prospective buyer who fell down a flight of stairs while touring a home for sale. The customer had sued the owner and the sales associates for failing to warn her of the staircase.
Since the credit crunch hit about two years ago, many lenders have all but abandoned jumbos, which are too big for secondary mortgage market companies Fannie Mae and Freddie Mac to buy for packaging into securities and outside the limit of FHA. Yet with their reluctance, lenders are leaving money on the table.
The first-time home buyer tax credit is an incentive you'd expect consumers to be clamoring about. But many practitioners are astounded to learn that buyers in their markets who are prime candidates for the credit aren't even aware of it.
Given the growing share of the market distressed sales represent, it might be just a matter of time before you must get involved with short sales and REOs. Yet these and other complications make clear that it’s a market segment you want to enter into only with your eyes wide open.