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Archive for January, 2010

Market Makes Significant Strides Heading into New Year Author: 2010 WRAR President - Mary Martin Jan 30

With the New Year off to a promising start, our local residential market offers some exciting news and trends for both buyers and sellers in the Wilmington area for 2010. During the 4th quarter, our local market showed improvements in numbers of homes sold and seller’s asking price over 4th quarter 2008. These are strong indicators that the housing market is stabilizing and progressing towards a recovery. 

Further analyzing the growth within the five major Wilmington zip codes, our average sales price has decreased 9.6% from 4th quarter 2008, and increased 5.3% from 3rd quarter 2009. When we look at the median sales price, we have a 12.0% decrease over 4th quarter 2008 and a .03% decrease over 3rd quarter.

•  Sellers received 94.3% of the asking price in 4th quarter 2009, compared to 93.6% for 4th quarter 2008.
•  4th quarter 2009 had an increase in the number of sold homes by 34.5% from 4th quarter 2008.

Over the last couple of years, an analysis of five Wilmington zip codes – 28403, 28405, 28409, 28411, and 28412 was conducted.  The areas of focus were: 

•  Sellers Concessions – The amount of money a seller of a house contributes toward the buyers purchase.
•  List Price – The amount of money a home is listed on the market.
•  Selling Price – The price the seller accepts for his or her house.
•  Days on Market – The number of days a house remains for sale, from the listing date to the date the property is placed under contract.
•  List to Sales Price Ratio – The difference between the list price and the selling price shown as a percentage.

2008 4th Quarter Average Selling Price vs. 2009 4th Quarter Average Selling Price

 

4th Quarter 2009                               28403 Zip Code

•  The average selling price, of $204,758 has decreased 14.7% from 4th quarter 2008 average selling price of $239,948.
•  17.9% of sellers in 4th quarter paid a concession, compared to 11.8% in 4th quarter 2008.
•  The average list price of $221,351 for 4th quarter has decreased 18.1% over 4th quarter 2008 average list price of $270,202.
•  The average number of days a property remained on the market for 4th quarter was 125 days, compared to 119 days for 4th quarter 2008.
•  The median sold price of $166,250 for 4th quarter has decreased 18.1% from 4th quarter 2008.
•  Sold homes in 4th quarter received 92.5% of the asking price, an increase from 88.8% 4th quarter 2008.

4th Quarter 2009                               28405 Zip Code

•  The average selling price, of $235,815 has decreased 24.2% from 4th quarter 2008 average selling price of $311,190.
•  23.6% of sellers in 4th quarter paid a concession, compared to 11.7% for 4th quarter 2008.
•  The average list price of $248,213 for 4th quarter has decreased 25.3% from 4th quarter 2008 average list price of $332,122.
•  The average number of days a property remained on the market for 4th quarter was 130 days, compared to 114 days for 4th quarter 2008.
•  The median sold price of $169,500 for 4th quarter has decreased 15.9% from 4th quarter 2008.
•  Sold homes in 4th quarter received 95.0% of the asking price, a increase from 93.7% for 4th quarter 2008.

4th Quarter 2009                               28409 Zip Code

•  The average selling price, of $274,895 has decreased 16.5% over 4th quarter 2008 average selling price of $329,333.
•  19.8% of sellers in 4th quarter paid a concession, compared to 11.3% in 4th quarter 2008.
•  The average list price of $291,092 for 4th quarter has decreased 17.6% over 4th quarter 2008 average list price of $353,302.
•  The average number of days a property remained on the market for 4th quarter was 136 days, compared to 138 days for 4th quarter 2008.
•  The median sold price of $225,000 for 4th quarter has decreased 12.6% from 4th quarter 2008.
•  Sold homes in 4th quarter received 94.4% of the asking price, a increase from 93.2% for 4th quarter 2008.

4th Quarter 2009                               28411 Zip Code

•  The average selling price, of $295,270 has increased 10.9% over 4th quarter 2008 average selling price of $266,349.
•  23.9% of sellers in 4th quarter paid a concession, compared to 22.0% in 4th quarter 2008.
•  The average list price of $315,548 for 4th quarter has increased 13.9% over the 4th quarter 2008 average list price of $276,923.
•  The average number of days a property remained on the market for 4th quarter was 109 days, compared to 110 days for 4th quarter 2008. 
•  The median sold price of $210,000 for 4th quarter has decreased 8.7% from 4th quarter 2008.
•  Sold homes in 4th quarter received 93.5% of the asking price, a decrease from 96.1% for 4th quarter 2008.

4th Quarter 2009                               28412 Zip Code

•  The average selling price, of $204,192 has decreased 9.9% over 4th quarter 2008 average selling price of $226,648.
•  35.3% of sellers in 4th quarter paid a concession, compared to 31.8% in 4th quarter 2008.
•  The average list price of $211,654 for 4th quarter has decreased 12.2% over the 4th quarter 2008 average list price of $241,127.
•  The average number of days a property remained on the market for 4th quarter was 134 days, compared to 111 days for 4th quarter 2008.
•  The median sold price of $183,000 for 4th quarter has decreased 1.1% from 4th quarter 2008.
•  Sold homes in 4th quarter received 96.4% of the asking price, a increase from 94.0% for 4th quarter 2008.

Summary

Our fourth quarter wrapped up the year with a positive increase in units compared to 4th quarter 2008 by 34.5%. A lot of these sales were driven by the original tax credit that was set to expire on November 30, 2009. By now, we are all aware that it was extended until April 30th, 2010. While we might have sold more homes, our average sold price from fourth quarter 2008 showed a 9.6% decline. Our current inventory of homes is high with over 13 months of supply.

Four zip codes had average sold price decreases from 9.9% to 24.2%, over fourth quarter 2008, while 28411 posted an increase of 10.9% in average sold price. Our list to sales price ratio for the 4th quarter 2009 is 94.38%, a slight increase from 93.61% for 4th quarter 2008. The average list price of the sold properties is $261,884 and is down 10.4% from 4th quarter 2008.
Concessions offered to buyers are now offered in 17.9% to 35.3% of the transactions in 3rd quarter 2009. Our median sales price for 4th quarter ($188,134) reflects a downturn of 12.2% from 4th quarter 2008 ($213,750).  Our overall average days on the market is 125, an increase of 7 days from 4th quarter 2008. Sellers in 28412 got about 96.4% of their asking price while those in 28403 only got 92.5% of their asking price. All five zip codes had an increase in units sold.

Last year will be looked at as the year in which our market bottomed out and started to stabilize. 2010 presents us with a housing opportunity that makes it the most affordable in generations. These are just some of the reasons that now is the time to buy:

1) The First Time Homebuyer Tax Credit has been extended and expanded to include repeat, move-up buyers.
2) We know our home prices are down at least 10% from 2008.
3) Foreclosures and Short Sales make for excellent buying opportunities.
4) Mortgage rates have reached historic lows.
5) We have a large housing inventory.

An Analysis of information from the Wilmington Regional Association of REALTORS® Incorporated, for the period Jan. 1, 2005 through December 31, 2009 – data pulled on January 17, 2010.

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Updated MLS Policies & Digital Watermarking Author: 2010 MLS President - Karen Parkin Jan 28

Your MLS will soon be adding a digital watermark to all photos. Per the MLS Rules and Regulations, MLS Vendors will have 72 hours to update all listing data so that this watermark is displayed on all photos shown on all of their websites.MLS Photo Watermark Sample
 
The digital watermark is the translucent, Registered ®
trademark of the MLS as shown in the example on the right.
It is digitally laid on top of every photo in the bottom right
corner which is the most standard way to protect a copyright.
 
The main reasons your MLS will be implementing this digital watermark is to reduce incurred legal fees and to protect your listing data and copyright.
 
The MLS Board of Directors approved the following updates to the MLS Rules:  
 
MLS Rule 5.1 Form of Indicating Compensation: Additional Compensation disclosure as required by NCREC Rule A.0109 where cooperating broker’s additional compensation is more than “nominal” shall be placed in the Additional Compensation field.
 
Added the following wording for clarification to MLS Rule Section 1.2 Detail on Listings Filed With The Service: A property data form, when entered into the Service computer by the listing broker, shall be complete in every detail which is ascertainable as specified on the property data form.
 
Participants/REALTOR® Subscribers who do not complete every detail, which is ascertainable, are subject to fines as specified in Exhibit 2 attached to these Rules. Further, no agent or company information such as phone numbers, hyperlinks to websites, Talking Ads, email addresses, etc., or offers of compensation of any type shall be placed in fields where the public might see them such as the “Remarks” or “Direction” fields. The proper location for this type of information is “Non Public Remarks” or “Additional Compensation” as specified in Section 5.1.
 
Added clarifying language to MLS Rule Section 2.5 Reporting “Pending” And Sold Sales to The Service: (NOTE: Once the contingency is removed under (a) [buyer's house is not under contract], (b) [Alternative 2], or (c) [subject to Short Sale] above, the status must be changed to Pending.) When the NOTE is read in conjunction with the entire MLS Rule, this change makes it clear that once a seller has accepted a contract with a short sale addendum attached, the property status = Active-Contingent; then, when the Lienholder notifies the Seller of the approval of the short sale, the property status=Pending.
 
Thank you for your time and attention to this important information!

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Learn to Relax, Laugh, & Save Money at REALTOR® ReCharge! Author: Broker Breeze Jan 26

Click Here to learn more about Kathleen Passanisi and get sneak peeks at all of her presentations!

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Legal Article: Offer to Purchase & Contract Lawsuit Author: WRAR CEO - Jerry Panz Jan 22

Botched Property Description in Offer to Purchase & Contract Lawsuit Results

Article by Will Martin & Bill Gifford

The recent case of Drake v. Hance, 673 S.E.2d 411 (nc Ct. App. 2009) underscores the critical importance of taking care to properly describe the property
in a real estate sales contract.

On June 16, 2005, Eric and Debra Hance entered into an Offer to Purchase and Contract to purchase a home owned by Garry and Wanda Drake. The contract was prepared by a real estate agent who was acting as a dual agent in the transaction. The property was described in the contract as “#15 Legacy Lake (ALL of the property in Deed Reference: Book 1137, Page 244 Union County).” Although the contract only specifically mentioned the purchase of lot 15, the deed referred to in the contract described both lot 15 Legacy Lake and lot 11 Legacy Lake. Lot 15 was the property on which the house was located. Lot 11 was a vacant lot across the street from lot 15.

The closing attorney prepared the deed among other closing documents. The new deed also described the property as “Lot 11 and 15, Legacy on the Lake.” The deed was recorded after closing on September 9, 2005. Eight months later, when the Drakes contracted to sell lot 11 to a third party, they discovered that lot 11 had been included in the transaction with the Hances.

After attempts to correct the mistake were unsuccessful, the Drakes filed a lawsuit in August 2006, alleging that both lots were mistakenly conveyed to the Hances. They alleged that the conveyance resulted from a mutual mistake of fact and requested the court to reform the deed to reflect the intended transaction. The Hances denied any mistake of fact regarding the deed.

Over the Hances’ objection, the trial court allowed outside evidence to determine the intentions of the parties. The court ordered reformation of the deed by deleting lot 11. The Hances appealed. On appeal, the Hances argued that the trial court erred by allowing the Drakes to present evidence which contradicted and modified the sales contract where all of the documents executed prior to the sale clearly described the property to be conveyed.

The appeal court acknowledged that the parol evidence rule prohibits the admission of evidence to contradict or add to the terms of a clear and unambiguous contract. On the other hand, if the contract leaves it doubtful or uncertain as to what the agreement was, parol (oral) evidence is admissible to determine what the real agreement between the parties was. In the case at hand, the contract included the street address and described the property as “#15 Legacy Lake” but also included a deed reference describing both lot 15 and lot 11. The appeal court concluded that this was an ambiguity, and the trial court therefore did not err in considering parol evidence to explain or construe the legal description. The trial court had found “exceptionally persuasive” the closing attorney’s testimony that the deed had been improperly prepared due to an error in his office.

The court of appeals concluded that the trial court did not err in admitting parol evidence to determine the intent of the parties, and did not err in reforming the deed when presented evidence of the attorney’s mistake, and therefore affirmed the trial court’s decision.

For unknown reasons, the real estate agent and the agent’s firm were not included in the lawsuit. However, several years of litigation and a lot of legal fees would likely have been avoided had the agent either have taken the time to review the actual deed prior to inserting a reference to it in the contract or not referred to the deed at all. (Note: A year prior to the filing of the Drake v. Hance decision, the “All” and “A portion of ” check boxes were removed from the Offer to Purchase and Contract as a result of several other reported situations with similar facts.)

Agents must be diligent and careful in completing the property description in a contract. Sufficient information must be included to adequately identify the property and, as the Drake v. Hance case demonstrates, that information must not be contradictory.

■ Will Martin and Bill Gifford are managers in the law firm of Martin & Gifford, PLLC, which practices primarily in the area of real estate brokerage law. For more information about the firm, go to www.martingiffordlaw.com. Copyright © 2009, Martin & Gifford, PLLC.

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