Boise Real Estate Blog

Boise Home Sellers: Who Is "Or Assigns"?

With our current ample supply of short sale and REO listings, it has become somewhat common to see offers with the name of the buyer, followed by “Or Assigns” or “Or Assignee”.

This language provides constructive notice to the seller and the listing agent that the buyer may assign the accepted contract to another buyer.

Which raises the question of “why is this buyer trying to buy my home if he’s not really the person who’s buying my home?”

Here are some questions needing answers if you’re the seller in this situation:

Who IS the real buyer?
Has the real buyer viewed your home? (does he even know it exists?)
Has the real buyer been approved for financing?
Can the real buyer actually perform and close escrow?
Is the original buyer simply someone who is “tying up” your home (with minimal earnest money), then trying to find another buyer who will pay him a cash premium in return for assigning his negotiated purchase contract? ( If the real buyer is willing to compensate the original buyer for assigning the purchase contract, are you receiving a fair price for your home?)
Is the original buyer tying up multiple properties with minimal earnest money, shopping the accepted purchase agreements to his investors, then defaulting on all but the one that’s the best deal?

Assignable purchase agreements can work, but they can be tricky.

I’m not saying that you should never accept an offer that is assignable.

But, I am saying that it’s always a good idea to get answers before allowing a buyer to tie up your home with an assignable purchase agreement.

Note: Item 38 (line 352) of the RE-21 Real Estate Purchase and Sale Agreement states “This Agreement and any rights or interests created herein may be sold, transferred, or otherwise assigned”, thereby making all offers submitted using that form assignable unless otherwise stipulated.

November 4th, 2010 Posted in Inside Real Estate |

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Boise Real Estate:101 ~ Calendar Day

In my last post, I explained how the real estate profession defines a business day.

Here’s how the Idaho Association of Realtors^® defines a calendar day in their RE-21 Real Estate Purchase and Sale Agreement form:

“A calendar day is herein defined as Monday through Sunday, midnight to midnight, in the local time zone where the subject real PROPERTY is physically located. A calendar day shall include any legal holiday. The time in which any act required under this agreement is to be performed shall be computed by excluding the date of execution and including the last day, thus the first day shall be the day after the date of execution. Any reference to “day” or “days” in this agreement means the same as calendar day, unless specifically enumerated as a “business day”.

There you have it!

November 2nd, 2010 Posted in Inside Real Estate |

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Boise Real Estate:101 ~ Business Day

We all think we know what a business day is, right?

Most would probably think a business day would be Monday through Friday, excluding holidays.

Well, things are a little more complicated in the world of real estate.

Here’s how the Idaho Association of Realtors^® defines a business day in their RE-21 Real Estate Purchase and Sale Agreement form:

“A business day is herein defined as Monday through Friday, 8:00 a.m. to 5:00 p.m. in the local time zone where the subject real PROPERTY is physically located. A business day shall not include any Saturday or Sunday, nor shall a business day include any legal holiday recognized by the State of Idaho as found in Idaho Code §73-108. The time in which any act required under this agreement is to be performed shall be computed by excluding the date of execution and including the last day. The first day shall be the day after the date of execution. If the last day is a legal holiday, then the time for performance shall be the next subsequent business day.”

Now you know!

November 1st, 2010 Posted in Inside Real Estate |

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Boise Home Buyers: Should Your Agent Preview?

Most of my colleagues think I’m nuts for previewing homes for my buyer clients, citing the extra effort, time, and expense that accompanies previewing.

I view previewing differently.

I think it’s unprofessional to show buyer clients homes that don’t meet their stated criteria.

Further, I feel that it’s my responsibility to find the best home for buyer clients who commit to work exclusively with me.

In our current market, it is often difficult to find a sharp, well-maintained home when you factor in price, location, size, features, amenities, schools, and other criteria.

With nearly 50% of our market activity consisting of short sales and REO’s, a large portion of our listing inventory is in poor condition.

Why?

Because most sellers who are losing their homes stop lavishing loving care on them.

I often eliminate most of the listings I initially find (or my buyer clients find on the internet) when I preview them.

My first step, when working with a new buyer client, is to meet and discuss the details of their proposed transaction.

In that initial meeting, I ask questions, take notes, and carefully listen to their needs, wants, likes, and dislikes.

How can I find the right home for a buyer if I do not clearly understand their situation?

Clearly understanding my client’s criteria/situation allows me to “go shopping” (preview listings) for them and narrow the field to the best homes, then show them to my buyer.

I view each new buyer client as a consulting assignment; almost like a puzzle to be solved.

My role is to counsel, educate, and advise ~ not “close the deal”.

Previewing requires extra effort, time, and expense, but it’s but it’s clearly more professional and effective than putting buyers in my car, wearing them out, and confusing them by showing them homes that don’t meet their needs.

October 31st, 2010 Posted in Inside Real Estate |

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"I'll Buy Your Meridian Home For Cash"

You’ve seen the signs, right?

How can you not see them when they’re on every utility pole in town?

The thought of a simple all cash sale of your home can be appealing if you want to avoid paying commissions, a lengthy marketing time, and the possibility of not selling your home.

Before you call that cell phone number on the utility pole, consider this:

You will be selling at a deep discount to an investor who cares about one thing ~ realizing a profit.
The investor who buys your home probably intends to “flip” your home after making cosmetic improvements. You might be better off to make those same cosmetic repairs yourself and sell at a higher price.
Your buyer may have (undisclosed?) partners who must agree to the deal.
Your buyer may be borrowing the cash he says he will bring to closing. How will you know that he can obtain financing for a non-owner occupied property in this market?
Your buyer may want to buy your home “subject to” your existing financing. Selling your home “subject to” the existing financing leaves you on the hook if your new buyer defaults on the payments, which is quite possible if the buyer fails to flip your home.

Before you go further, consider these possible outcomes:

You sell your home “subject to” the buyer taking over your existing financing (making your payments).
Your buyer tells you that it isn’t necessary to get title insurance or escrow and existing liens remain in your name.
Your buyer rents it to someone who can’t qualify to buy on a lease-option (to get non-refundable upfront option money).
Your buyer promises to make up your back payments, but doesn’t, while pocketing the rent each month.
Your buyer promises to pay you for your equity when the property is re-sold.
Your buyer offers the property for sale (with an uncooperative tenant who refuses to allow the property to be shown).
Your buyer fails to flip the property, or worse yet, flips your home “subject to” your existing financing to yet another investor.
Your buyer defaults on the payments (on your loans).
Your lender forecloses.
You don’t get paid for your equity.
You have a foreclosure on your credit record.
You lose your home.