Real Estate News & Updates from the Monadnock Region
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Whats New with LEAD PAINT in New Hampshire?

January 26th, 2011 | Posted by Dick Thackston in Real Estate News - (0 Comments)

What’s New with LEAD PAINT in New Hampshire?

The deadline for obtaining a Lead Certification to work on properties containing lead paint was extended to December 31, 2010. If someone you know is working on lead paint without a certification they are out of compliance with the EPA rules!

Yikes!

Not being certified and working on a lead property is a ticking time bomb. Getting certified or finding a certified renovator isn’t that hard we can help with that if you want as well.

Here’s a partial list of potential penalties:

- Potential $37,500 EPA penalty
- Litigation can use non-compliance to show negligence by a renovator which can then be transferred to OSHA compliant and other labor law.
- If non-compliance can be proven by a homeowner it could be basis for none payment for services rendered.
- OSHA could use non-compliance as basis to prove non-compliance with it’s new “Lead in Construction Standards”.
- Renovators who store their paperwork less than eighteen years could be subject to future litigation as the statue of limitations for children doesn’t start until they are 18 years old. If a child decided to sue a renovator for lead poisoning, having the documentation to prove lead safe work practices were used will be an important defense for the renovator. If the documentation is gone or never existed to begin with, proving compliance will be difficult or impossible.

New Hampshire is preparing legislation to take over administration of the RRP rule from the EPA. Why? Because it’s a potential money maker for the state to administer and fine people for non-compliance with these rules, especially considering the large number of properties containing lead in New Hampshire. A placeholder bill has been introduced without specific language. Public comment and a vote are expected in the 2011 legislative session.

Alabama just became the tenth state to take over administration and enforcement from the EPA. The other states are North Carolina, Iowa, Kansas, Mississippi, Oregon, Rhode Island, Utah, Wisconsin and Massachusetts. If you’d like to view the new Alabama RRP rule visit the Alabama Department of Health website.

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What the heck are buyers thinking?

January 17th, 2011 | Posted by Dick Thackston in Buying Tips | Mortgage News | Real Estate News - (0 Comments)

Conversations since the beginning of the year amongst REALTORS have more and more revolved around the question: “What the heck are buyers thinking?”

We keep hearing potential home buyers who are actively searching for the perfect home say, “it’s OK I can still wait for a better deal because interest rates are still low”, obviously this is frustrating for REALTORS and home sellers whether the seller is a bank or an existing homeowner. It’s very likely that these same buyers will be very frustrated many will be mad when they join the Could’a, Would’a, Should’a Club as the ultra low interest rates that have dominated 2010 vanish.

Could rising mortgage rates spur a housing rush? It seems possible. Why would rates climb and why would rising rates spur housing but things seem counter intuitive.

Home Mortgage Rates have been showing an upward bias for several months with the Fed moving its commitment to buying MBS from Fannie Mae and Freddie Mac. There has been a consistent effort by the Fed and Treasury to let market forces have a greater impact in housing rates over the last six months this has driven rates up. It is clear that they won’t continue to make a market for low interest rates forever so it’s not a question of if but just when and how much.

Rising rates could spur housing easily once the pool of uncommitted buyers perceives that rates are rising. Everybody wants to get on the train before it leaves the station but nobody wants to get on first. I spoke with a friend of mine who’s been in the business as long as I have and back in the early 80’s when interest rates would move up and down in the 12 -13.5% range it was not unusual for buyers to stay out of the market and avoid making a decision when rates had dropped to a plateau wild horses couldn’t get them to make a decision while interest rates were on the bottom but as soon as interest rates started even the smallest upward trend buyers who you thought couldn’t decide about the day of the week would jump off the fence and buy anything they could.

The next few months in housing should be memorable.

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So we begin a New Year, a New Decade and a New Normal in real estate. Happy New Year

January 6th, 2011 | Posted by Dick Thackston in Mortgage News | Real Estate News - (0 Comments)

There are signs of improvement in our region but more important expectations about real estate have changed; it seems unlikely that the real estate business as it was from 2002 to 2007 will return in the foreseeable future.

Not necessarily a bad thing.

There are two big changes that make for a New Normal expectations and technology.

Housing prices are driven by expectations. According to Trulia and RealtyTrac one in five or 20% of consumers believe that housing will not recover fully till 2015 or later, this means that for at least 20% of potential buyers there is minimal urgency to buy – everyone wants to buy on the way up; fewer people want to buy if they’re unsure.

The U.S. Census Bureau released the results of its Housing Vacancy Survey and the nation’s Home Ownerships rate declined for the fifth year in a row in 2009. Clearly Americans have been choosing to rent versus own in this elongated period of economic uncertainty. Ownership is no longer everyone’s goal or expectation even when the households can well afford a home. That being said everybody’s got to live someplace which has driven up rents and created a new profit opportunity for individuals and investors willing to buy and hold real estate or buy, renovate, rent and hold real estate.

Being an investor willing to buy and hold or buy, renovate, rent and hold real estate is not for the faint of heart, it’s a business which means there can be losses as well as gains and all the challenges of being a landlord. The incentives to take these risks are the tremendous opportunities that exist from acquiring REO properties if you have the cash and the stomach.

Lenders know they face huge costs with vacant properties. Their costs are reported to average $500 per month on the “easy” properties, meaning properties in fairly stable condition in safe locations. Lender overhead, taxes, maintenance, insurance interest charges in many situations easily drive that price up to $1,000 per month.

That being said it’s important for investors to understand that the REO departments are responsible for obtaining the very best net revenue they can for the underlying investors. It is highly unusual for REO departments to take 30 and 50% off asking prices. Normally there is a recent underlying appraisal that drives their pricing and there cost to hold may only be $1,000 per month so a property priced at $100,000 is probably not going to go for $50,000 anytime soon – that’s 50 months worth of carrying costs. There is undeniably some wiggle room generally more in the 10 – 15% range by the same token if an investor is willing to wait and/or willing to loose a property then once a property gets into their strike zone they would be well advised to execute a clean contract and have all their paperwork ready: evidence of cash to close or other source of funding, inspection scheduled in a short time frame etc.

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