http://hurlbuthomes.com/blog/ en-us Nucleus CMS v3.24 © Weblog http://backend.userland.com/rss http://hurlbuthomes.com/blog//nucleus/nucleus2.gif http://hurlbuthomes.com/blog/ http://hurlbuthomes.com/blog/index.php?itemid=104 Boundary DisputeHere's an interesting case that just happened here in Washington. Let me set up the scenario for you, this may not be exactly what happened, but I'm providing the link to case law so if you're REALLY inclined you can read for yourself:

The case is Proctor Versus Huntington.

Mr. Proctor and The Huntington's both purchased parcels (30 and 27 Acres respectively) of land that adjoined each other. They were given a vague description of the property lines by the seller of the land. The Huntington's actually camped on the land for a couple of years and even met Mr. Proctor while camping there. They assumed they were camping on their land and in fact, Mr. Proctor never said anything to them about them being on his land. Turns out they were camping on his land. To take it one step further, the Huntington's, again under the assumption they were on their land, had a home, well and garage build on that portion of land. They lived there for 6 years when Mr. Proctor had a boundary survey done and discovered that the Huntington's were in fact on HIS land. He filed a motion to have them ejected from the land and have the house, well and garage removed.

When the court heard the case, they refused to eject the Huntington's because the damages to them (over $300,000 to have the buildings and well removed) far exceeded the benefit Mr. Proctor would receive by getting his land back. The court through some appraisal process valued the approximately one acre the Huntington's were on at $25,000. So they made a property line adjustment and ordered the Huntington's to pay Mr. Proctor $25,000 for his land.

Now in Washington we have a law called "Adverse Posession" that among other things states that if you use land that isn't yours for 10 years, you maintain it, act as if it is yours and the actual property owner doesn't prohibit you from doing so, you have legal claim to that land. There are other provisions that define this, so don't start mowing your neighbor's yard with the hopes that after 10 years he doesn't say anything and you get more land, but you get the general idea. Even though this case did NOT meet adverse posession, the court still sided for the Huntington's. Just when you think you know the law . . . .

I'd love to hear your comments on this! What say ye!?

Here's the link to the actual case if you're bored and want to read case law:
http://www.mrsc.org/mc/courts/appellate/146wnapp/146wnapp0836.htm]]> General http://hurlbuthomes.com/blog/index.php?itemid=104 Thu, 26 Aug 2010 17:28:44 -0400 http://hurlbuthomes.com/blog/index.php?itemid=103
Last night, the Senate passed the National Flood Insurance Program Extension Act of 2010 (H.R. 5569), an extension of the National Flood Insurance Program until September 30, 2010. This will allow transactions to move forward. The bill is retroactive and covers the lapse period from June 1, 2010, to the date of enactment of the extension. NAR members sent more than 250,000 letters to Members of Congress encouraging them to extend the program.

Additionally, Congress passed an extension of the closing deadline for the Homebuyer Tax Credit, the Homebuyer Assistance and Improvement Act (H.R. 5623). The extension applies only to transactions that have ratified contracts in place as of April 30, 2010, that have not yet closed. The legislation is designed to create a seamless extension; the new closing deadline for eligible transactions is now September 30, 2010. There will be no gap between June 30 and the date the President signs the bill into law. Extending the tax credit closing deadline will help provide additional stability to real estate markets across the nation.
Our Government Affairs team worked closely with Congressional leaders on both sides of the aisle to enact this important legislation.

NAR is still working on restoring the 502 single-family rural housing loan guarantee program. Language is included in H.R. 4899, the Emergency Supplemental Appropriations bill, that is currently in conference between the House and Senate. We expect the House to pass that bill shortly and are hopeful the Senate will do the same when they return the week of July 12. When that bill passes, the program will be restored through the end of the fiscal year.

This is just another good example of why you want to work with a Realtor when it's time to buy or sell your home. We go to work for you well beyond just helping you buy and sell your home.]]> General http://hurlbuthomes.com/blog/index.php?itemid=103 Thu, 1 Jul 2010 12:44:53 -0400 http://hurlbuthomes.com/blog/index.php?itemid=102
So if you missed out on the tax credit by not having something under contract by April 30th, I'm sorry, there's nothing here for you . . . But if you're one of thousands of homebuyers that have something under contract, hold out hope that either you'll get your transaction closed by June 30th, or if you miss that, that Congress will pass this and you'll have a reprive until September 30th. Stay tuned, as I know more, I'll let you know.]]> General http://hurlbuthomes.com/blog/index.php?itemid=102 Mon, 14 Jun 2010 15:42:21 -0400 http://hurlbuthomes.com/blog/index.php?itemid=101 What are they thinking?So earlier today, I helped a buyer write a contract on a new home they're purchasing here in the area. The home is a new home, not yet constructed. So the builder, as builders often do, has his own contract to purchase that outlines the way the builder would like things to be done. How much earnest money is required, access to the home, etc. But one paragraph stuck out to me and my buyer particularly. It basically said that as long as this particular builder was building in this community, that the buyer could not sell or rent their home. If the builder discovered that the buyer were selling the home while the builder was still actively building in the community, the builder would have the option to purchase the home from the buyer at the original price. That maybe wouldn't be so bad, but the paragraph went on to say: In addition to having the option to purchase the home back at the original purchase price, the buyer (now seller of the home) would be obligated to reimburse the builder for the closing costs the builder paid on the original transaction AND the transaction to purchase the home back!

Are you kidding me?

When my wife and I visited Arizona in 2006, we briefly considered purchasing a second home there. In Arizona at that time, things were moving so quickly, builders often put clauses like this in their contracts. In addition, you would be told up front that the price that was on the home at the time you signed the contract, would not necessarily be the price you ultimately paid for the home. If the builder had $20,000 - $30,000 in price increases during the time your home was under construction, you'd be obligated to pay the new, higher price at the time of closing. And people were lining up to sign those contracts.

In the case of this particular clause, if we were in a market like we had in 2006, you could pretty much guarantee the builder would be out of the community in 6 - 9 months. But now, it could be 5 or more years before some of these plats get built out and the builder is no longer "actively" selling in the community. So to sign a clause like that in my opinion is ludicrous in a market like we have today.

The moral of the story, you should absolutely know what you're signing before you sign it. If you're not working with a Realtor, make sure you connect with one ASAP so you don't end up in a sticky situation and blindly sign away rights you may be entitled to. And always, always, always, make sure you consult with an attorney on any legal contract you sign if you don't understand it.]]> General http://hurlbuthomes.com/blog/index.php?itemid=101 Thu, 10 Jun 2010 13:06:37 -0400 http://hurlbuthomes.com/blog/index.php?itemid=100 adjustable rate mortgage? Is your interest rate about to adjust? Are you freaking out about what your new payment is going to be? Me too. Yep, that's right, I'm in an adjustable rate mortgage that is set to adjust in June of 2011. Why am I talking about this one full year before my rate adjusts? Simply because it's better to be prepared and KNOW what you're in for, rather than be surprised later.

Background:
When I bought my home in May of 2006, I thought I was doing all the right things, I put 5% down (which was 5% more than most people put down) and financed 80% on my first mortgage and 15% on my second mortgage. I did a full documentation loan (I had the option of doing a "Stated Income" loan but because I made enough to qualify for the loan, there was no reason to do that) providing tax returns, pay stubs, a vial of my blood, the whole 9 yards. BUT my 1st mortgage is an Interest Only Adjustable Rate Mortgage. Meaning that the payment I make each month only pays the interest, and never pays down the principle. Hindsight is always 20/20 and if I had it all to do over again, I would have just bitten the bullet and done a 30 year fixed rate loan. But I was counting on home prices continuing to rise and in 2011 when my mortgage reset, I would either just sell my home, or refinance it into a 30 year fixed rate loan. We all drank the Kool-Aid in 2003 - 2007. In fact, 4 months after I closed on my home, another just like it sold in my neighborhood for $65,000 more than what I paid! I felt like a genius! But it turns out that was the ABSOLUTE peak of the market and home prices started to fall at that point. Soon that $65,000 was gone, as was the 5% I put down on the house. And they continued to fall. At this point I probably owe about $25,000 more than my home is worth. So now what?

Well thanks to the Obama administration's housing policy changes, I can now do a HARP (Home Affordable Refinance Program) refinance on my current home that will allow me to refinance my first mortgage into a 30 year fixed rate even though I have a negative equity position. With my current loan balance and current interest rates that locks me into a $400.00 per month increase in my payment. Right now. But what would happen if I rode it out and let my interest rate reset in June of 2011? What would that REALLY mean to me? To find out, I had to dig out my Deed of Trust. What I learned actually gave me peace of mind, and if you're in an ARM, it may help you too.

Most counties allow you to dig around in their public records for free. So if you don't have the closing documents that you signed when you bought or refinanced your home, don't worry, your Deed of Trust is probably available online. (What did we do without the Intertubes???) If you happen to live in Pierce County, you can find the recording department at: http://bit.ly/95I2hU Accept the disclaimer and you're in. Search by Lastname, Firstname and set the document type to "Deed of Trust". If you've had multiple homes, or have refinanced multiple times, finding the correct one may be a bit of a challenge, but think about the date you closed and find the one closest to that date. If you have two mortgages, even if they're with the same company, you'll have two deeds of trust.

Once you've located it, your deed of Trust will have what's called an "Adjustable Rate Rider" attached to it. This is the document that determines how often, how much and when your interest rate can adjust. The first thing you'll see is the "Interest Change Dates" this will tell you when your first adjustment is and how often it can adjust after that. For example, mine can adjust June 1st, 2011 and once every 12th month after that. OK, so I know that on June 1st of next year, my first interest rate adjustment can take place. Check.

Next, will be "The Index". This will be the rate they'll be basing your interest rate adjustment on. Mine happens to be the 1 year LIBOR rate. OK, once per year starting June of 2011 and based on the 1 year LIBOR. Got it.

Following the Index will be "Calculation of Changes". This will tell you what they will do to figure out what your new rate will be. In my case they're going to add 2.25% to the Index (1 Year LIBOR) and round it to the nearest .125%. This is where most people start freaking out. Don't worry, that's a normal reaction. But it's not as bad as you might think. See my Interest Only ARM is currently at 5.75%. So a lot of people would think "OH man!! My interest rate is going to go up to EIGHT PERCENT!!" But read it again . . . it's going to go up by 2.25% + The Index. We need to know what the index is. And turns out the index is FAR better now than it was when I closed on my loan. Right now as of today, the 1 year LIBOR is 1.2% Yes, ONE POINT TWO percent. So if we add 2.25% to that, we get 3.45%, but we need to round it to the nearest .125% which gives us an interest rate of 3.5%. So if my rate were to adjust today, it would actually go DOWN 2.25%!!!

But wait, that's not all. My loan was interst only for 5 years, then it re-amortizes over 25 years. So in June of 2011, it will be a 25 year fully amortized loan (Meaning my payments will cover Principle AND Interest) This is a key piece of information to have when recalculating what your payments will change to after the adjustment. If you calculate your payment based on 30 years and it's actually 25 years, you'll get results that will make your payment change look better than it actually is.

As you continue reading your Adjustable Rate Rider, it will give you the maximum and minimum interest rate you can be charged. In my case it's 10.75% (yikes!) and 2.25%. Continuing to read on, it will tell you how much it can adjust in any given period. (Mine is no more than 2%) The first interst rate change (June of 2011 for me) is an exception to this rule. On the first change, it can go up to the top or down to the bottom irregardless of the 2% maximum change rule.

So what does this all mean? Well every situation is going to be different and I'm not giving you advice as to what to do in your particular situation, you'll have to decide that for yourself. But for me, if I gamble and wait for my loan to adjust in June of next year, if rates stay the same (unlikely) as they are today, my payment would only increase by about $70.00/month. If rates went up a full percentage point (Good chance of that happening) my payments will increase by $240.00/month. In a worse case scenario situation, rates went up by as much as 2%, my payment would increase about $428.00/month. In my situation, I'm going to probably ride it out for at least one more year. Because by not paying the extra $400.00/month now, I can put myself in a better situation by this time next year by either saving that $400/month or using it to pay down other consumer debt. Plus, refinancing costs money somewhere, either in closing costs that you pay out of pocket, or add as additional priciple onto the loan. Could be thousands of additional dollars that you have to pay.

If you'd like help evaluating your personal situation, I'm more than happy to sit down with you and discuss your options. If you have any questions about the information I've provided here or how I did my calculations, let me know. Here are some additional resources you may find helpful:

Current LIBOR and other Index Rates
Simple Amortization Calculator
Federal Reserve Board Consumer Handbook on Adjustable Rate Mortgages]]> General http://hurlbuthomes.com/blog/index.php?itemid=100 Fri, 4 Jun 2010 18:25:29 -0400 http://hurlbuthomes.com/blog/index.php?itemid=99
Question:

Is Washington a non-recourse state? Can deficiency judgments attach to residential property owners whose property is lost in foreclosure or sold as a short sale?

Answer:

Washington is a non-recourse state but the answer to this question is not simple. If the first position lien holder non-judicially forecloses the mortgage on seller's residence, that lien holder cannot take a deficiency judgment. A non-judicial foreclosure is a foreclosure that occurs without lender filing a lawsuit against debtor to foreclose the mortgage. The overwhelming percentage of all foreclosures in Washington state are non-judicial.

However, if the first position lien holder judicially forecloses a mortgage, the lien holder can take a deficiency judgment. Of course, a judicial foreclosure means that lender did file a lawsuit against debtor to foreclose the property. Agricultural property must be judicially foreclosed.

Any lien holders who are junior or subordinate to the lien holder who forecloses on a property, judicially or non-judicially, can still seek recovery of any outstanding amounts owing from seller to the junior lien holder after the foreclosure sale. The junior lien holder's rights do not take the form of a deficiency judgment, but junior lien holder can, nevertheless, seek recovery of all amounts still owing.

In a short sale situation, the term "deficiency judgment" has no application. However, if any secured lender does not specifically discharge seller from the obligation to repay the amount not repaid through the proceeds of sale, then lender can pursue collection of the unpaid amounts from seller, after closing. Seller may or may not have a defense to lender's collection efforts, based on seller's situation. This is true of senior and junior liens. Just because the lender "approves" the short sale does not mean that lender discharges the remaining debt. An obligation to repay the outstanding balance to a secured creditor can survive closing of a short sale, even if secured lender releases the security agreement.

Agent should not attempt to counsel sellers on any of the information provided in this answer. Agent is not licensed to do so. Rather, if seller is in foreclosure or considering selling short, agent should advise seller to seek legal counsel before making any final decisions about how to proceed.

Hotline Attorney Annie Fitzsimmons ]]> General http://hurlbuthomes.com/blog/index.php?itemid=99 Wed, 10 Mar 2010 16:20:00 -0500 http://hurlbuthomes.com/blog/index.php?itemid=98 http://www.co.pierce.wa.us/pc/abtus/ourorg/sheriff/abandonedvehicles.htm for instructions on how to report them. You can report vehicles in the right of way (parked on the street) and there's even a place to call to report abandoned vehicles on private property.

In many instances your neighborhood HOA (Homeowner's Association) cannot do anything about cars parked on the street, only on the sidewalk. So your only option is to report it to the county. Use some discretion however, you can't really call in a car that moves every week, but if you've got one that's been there for say two years with moss growing under it, call away.

Check it out!]]> General http://hurlbuthomes.com/blog/index.php?itemid=98 Mon, 15 Feb 2010 17:52:02 -0500 http://hurlbuthomes.com/blog/index.php?itemid=97
Here's the link to the site:
http://www.co.pierce.wa.us/pc/abtus/ourorg/at/at.htm

And yes! Just as I suspected, my property value went down and my taxes went UP! OK, only 9 dollars, but still. . . .]]> General http://hurlbuthomes.com/blog/index.php?itemid=97 Sat, 13 Feb 2010 17:14:27 -0500 http://hurlbuthomes.com/blog/index.php?itemid=96 NOTE: The following article is courtesy of RISmedia. However, I'm going to make some of my own comments on it as well, so see those in RED and feel free to contact me with any questions.

RISMEDIA, December 21, 2009—It’s easy pickings out there for many potential homebuyers. Housing prices are at their lowest in more than a decade, inventories are high, analysts are predicting a new wave of foreclosures and the government is offering two substantial tax credits for which many homebuyers qualify. Remember, "Easy" is a subjective term. Many of the homebuyers I've helped this year have found themselves in multiple offer situations and a lack of foreclosed inventory in their price range.

But bargain buyers beware, warns Vince Mastronardi, whose property preservation business has been busy preparing foreclosed homes for sale.
“Buyers need to educate themselves about the potential pitfalls of purchasing distressed property,” says Mastronardi, president of On-Site Specialty Cleaning & Restoration. “It’s not so much what damage occurred, but the source of that damage and how long before the problem was addressed.” Also note, the tips and advice are coming from a person that's hired to fix this stuff.

These 10 signs may indicate that trouble is around the corner.

1. Unheated house in winter months. If the home has been properly winterized, there’s no need for heat. But if the home has not been properly winterized, pipes will burst and cause water damage. Most of the homes in our area are Winterized starting in October, but it DOES make inspecting the house difficult and sometimes an added expense for the potential buyer. Be ready to pay a de-winterization fee and a re-winterization fee IN ADDITION to your normal home inspection.

2. Missing sinks, toilets and other fixtures. Make sure they’ve been properly removed and not ripped from walls and floors. It is fairly common for people to be LESS than careful when taking everything, INCLUDING the kitchen sink.

3. Peeling, bubbling, and discolored paint; swelling in walls or ceilings (especially around kitchens and bathrooms) or a musty odor all indicate water damage and, potentially, the presence of moisture and mold.

4. Fungus growth inside cabinets, behind drawers and built-ins. Fungus could mean that there has been water damage. Since water falls down, look for the source above the mold.

5. Blocked drains or pipes will cause future problems and may have already created sewage backups.

6. Black cobwebs, greasy gray residue on walls and/or a strong oily odor. This could point to potential soot damage or a malfunctioning furnace. Always look at the cold air return in the home to see how dirty it is to give you a GOOD idea of how well the furnace has been maintained.

7. An older home with extensive renovations. Check with the city for pulled permits in order to get remolding details. If asbestos is present and has been disturbed, be sure it’s been remediated by a certified specialist. You'll need extra time built into your offer to check these things and it's not always easy to get that additional time from the bank selling the home.

8. Excessive painting of every nook, cranny, door and floor may mean that the seller is covering up mold. I haven't found too many foreclosed homes with excessive painting. Usually they're sold as-is, BUT good advice in ANY home none the less.

9. Discolored subflooring. From the basement, check the subflooring above for stains and small holes, both caused by mold.

10. Air Quality. The air quality within a home tells a lot about the home’s condition. Be sure to include air and surface testing in your home inspection. It’s a few hundred dollars well spent. I need to investigate with the inspection company that I normally use to see if this test is even available through them, or where they'd recommend having it done. I've never even heard of this being done.

“Time and technique are the most important factors of effective clean-up and preventing future problems like mold or contamination,” Mastronardi explains. “Ideally, professional cleanup begins within a few days of the damage; technicians are trained, certified or licensed; and equipment is specialized and up to date.”

Ask the seller to explain how the damage was fixed. Plus, check out the company that performed the repairs to ensure it has industry-recommended certification. If needed, follow-up with the seller or repairing company for specific repair details. This will be REALLY difficult to get from a bank owned home. Often they've taken over the home and haven't even done a personal inspection themselves. The inspections have all been done by real estate agents and inspectors. So odds are likely that if they've done work, it wasn't ordered by them, but the agent listing the home and any records may be hard to come by.

Read more: http://rismedia.com/2009-12-20/10-trouble-spots-to-consider-when-purchasing-a-foreclosed-home/#ixzz0aLLjzydo
]]> General http://hurlbuthomes.com/blog/index.php?itemid=96 Mon, 21 Dec 2009 12:34:03 -0500 http://hurlbuthomes.com/blog/index.php?itemid=95
The 15-year FRM this week averaged 4.38 percent with an average 0.6 point, up from last week when it averaged 4.32 percent. A year ago at this time, the 15-year FRM averaged 4.92 percent.
The 5-year Treasury-indexed hybrid adjustable-rate mortgage (ARM) averaged 4.37 percent this week, with an average 0.6 point, up from last week when it averaged 4.26 percent. A year ago, the 5-year ARM averaged 5.60 percent.

The 1-year Treasury-indexed ARM averaged 4.34 percent this week with an average 0.5 point, up from last week when it averaged 4.24 percent. At this time last year, the 1-year ARM averaged 4.94 percent.

Courtesy of the Washington Association of Realtors]]> General http://hurlbuthomes.com/blog/index.php?itemid=95 Sat, 19 Dec 2009 01:10:35 -0500