In the Colorado Contract to Buy Sell (revised for 2011), there are some changes that you should be aware of prior to inking a contract on your home of choice. One of the most significant changes is the verbiage regarding Inspection Objection and Inspection Resolution. The contract now reads:
10.2. Inspection Objection Deadline. Unless otherwise provided in this Contract, Buyer acknowledges that Seller is conveying the Property to Buyer in an “as is” condition, “where is” and “with all faults”. Seller shall disclose to Buyer, in writing, any latent defects actually known by Seller. Buyer, acting in good faith, shall have the right to have inspections (by a third party, personally or both) of the Property and Inclusions (Inspection), at Buyer’s expense. If (1) the physical condition of the Property, (2) the physical condition of the Inclusions, (3) service to the Property (including utilities and communication services), systems and components of the Property, e.g. heating and plumbing, (4) any proposed or existing transportation project, road, street or highway, or (5) any other activity, odor or noise (whether on or off the Property) and its effect or expected effect on the Property or its occupants is unsatisfactory in Buyer’s sole subjective discretion, Buyer shall, on or before Inspection Objection Deadline
10.2.1. Notice to Terminate. Notify Seller in writing that this Contract is terminated; or
10.2.2. Notice to Correct. Deliver to Seller a written description of any unsatisfactory physical condition which Buyer requires Seller to correct.
If written notice is not received by Seller on or before Inspection Objection Deadline (§ 3), the physical condition of the Property and Inclusions shall be deemed to be satisfactory to Buyer.
10.3. Inspection Resolution Deadline. If a Notice to Correct is received by Seller and if Buyer and Seller have not agreed in writing to a settlement thereof on or before Inspection Resolution Deadline (§ 3), this Contract shall terminate on Inspection Resolution Deadline (§ 3), unless Seller receives Buyer’s written withdrawal of the Notice to Correct before such termination, i.e., on or before expiration of Inspection Resolution Deadline (§ 3).
So what does this mean? Well, in previous versions of the contract there was no mention that a property would convey "as is, where is" proposed by the state document. This would be addressed in the additional provisions sections or 78230n addressed in the counter proposal by the seller. So now, all properties convey "as is" "where is" and the buyer, similar to times passed, would need to submit a Notice to Correct or Notice to Terminate if an unsatisfactory condition existed.
Furthermore, in previous versions of the contract, if issues were not mutually agreed upon by the Inspection Resolution Deadline, the contract would terminate 24 hours after that deadline. A good common sense change to make the deadline an actual deadline. As far as the presumption of "as is" goes...it has has always been up to the buyer to either request repairs or terminate the contract. Any buyer acting in "good faith" should always perform their due diligence when purchasing a home and consult with a real estate professional on their options.
Monday, January 24, 2011
Sunday, January 23, 2011
Market Snapshot....
The Worker, Homeownership, and Business Assistance Act created a tax credit of up to US$ 6,500 for qualified homebuyers for purchases after November 6, 2009 and up to April 30, 2010, or purchased by September 30, 2010 and under contract by April 30, 2010. Throughout most of 2010, there was much discussion and debate about whether such a credit would provide the needed stimulus to get the housing market permanently on the path of real recovery, or if it would prove to be just a temporary boost, benefiting a few at the expense of many.
After some signs of recovery in the spring, home sales, housing starts, and home price appreciation moved back to, or close to, record lows during the latter half of 2010. After moderating in late 2009/early 2010, inventories of unsold homes, as measured in both units and months’ supply, are back up at levels witnessed in 2008 when the housing market was in the midst of its crisis. Mortgage delinquency rates and new foreclosures continued to increase in both the prime and sub-prime loan markets and the national unemployment rate remains high, fueling further speculation about the strength or duration of any recovery in the housing market
The S&P/Case-Shiller Home Price Indices1 were a primary topic of discussion throughout the year. At both the national and regional levels, the indices clearly illustrate the historic declines in home prices beginning in mid-2006, the modest recovery that began in the early spring of 2009, and the recent reversal that seems to be occurring, as observed in the latest reported data.
In Denver, the non-seasonally adjusted figures show that home prices declined as well as number of homes on the market.
Monday, January 17, 2011
A very exciting announcement!!
Wells Fargo Home Mortgage and Colorado Mortgage Alliance (an affiliate of Well Fargo Home Mortgage) have made a policy change for FHA PURCHASE LOANS!!!
Effective January 15th, 2011, (purchase money only) credit scores down to 500!!
Their minimum credit score prior to January 15th was 600! This could open up financing options to many buyers that were previously denied due to credit scores.
The down payment requirements are increased.
500-579 == 10% down payment
580-600 == 5% down payment
600 and higher == 3.5% down payment
NO gift funds for required down payment
NO down payment assistance programs
Call me NOW so we can get you connected with the right mortgage professionals!
Saturday, January 8, 2011
The More You Know: Energy-Efficiency Tax Incentives Extended
By Keith Loria
RISMEDIA, January 6, 2011—In December Congress extended and modified energy-efficiency tax incentives for appliances, new homes and retrofits to existing homes. The tax legislation, signed into law by President Obama earlier this year, will continue to help raise the market share of efficient appliances, HVAC and insulation products, as well as new homes.
“For the last few weeks, the Alliance to Save Energy has urged policymakers to remember the pitfalls of not extending these tax incentives—namely, higher energy bills and less disposable income for American families, who are counting on Congress to turn around our still-struggling economy,” said Alliance President Kateri Callahan. “Congress will help Americans keep their homes comfortable and their energy bills low in an unpredictable economy.”
The bill provides several energy efficiency-related provisions and will be in effect for 2011.
Included is a federal income tax credit of up to $500 for homeowners who make certain energy-efficient improvements. This popular energy-efficient home retrofits credit has returned to pre-Recovery Act levels with strengthened eligibility criteria.
For dishwashers, a $25 credit is given for models using no more than 307 kilowatt hours/year and 5.0 gallons of water/cycle. It goes up to $50 for models using no more than 295 kilowatt hours/year and 4.25 gallons of water/cycle; and $75 for those using no more than 280 kWh kilowatt hours/year and 4 gallons of water/cycle.
Clothes washers can get a credit of $175 for top-loading models that meet/exceed 2.2 MEF, and does not exceed 4.5 WCF or $225 for top-loading models that meet/exceed 2.4 MEF, and does not exceed 4.2 WCF, or front-loading models that meet/exceed 2.8 MEF and do not exceed a 3.5 WCF.
For refrigerators, models that use 30 percent less energy relative to the federal standard will receive a $150 credit, while those with 35 percent less energy will receive $200.
There is also limited credit for building materials including insulation, sealing products, certain types of roof and energy-efficient windows at up to 10 percent of their cost. Windows also are subject to a flat $200 limit.
“These incentives have substantially raised the market share of efficient products and new homes, saving consumers money, creating jobs, and helping to make efficient products the long-term norm,” said Steven Nadel, Executive Director of the American Council for an Energy-Efficient Economy.
The bill also contained credits for manufacturers of energy-efficient appliances, a credit that could be claimed for installation of electric vehicle charging stations and an increased maximum value for pre-tax, employer-provided transit benefits.
“The tax incentives adopted are a welcome signal to U.S. consumers, who currently face rising energy costs in a still-uncertain economy, that Uncle Sam will help them pay for energy efficiency improvements to make their homes more comfortable and their energy bills more affordable for years to come,” Callahan said.
While Congress is expected to extend most of the expiring federal energy efficiency tax incentives, it is not extending the incentive for hybrid trucks and buses. This extension had been included in previous House and Senate bills, but was dropped from the final bill.
“While we are happy to see most of the energy efficiency incentives extended, we are disappointed that the hybrid truck incentive is not being extended; we hope Congress will rectify this omission in 2011,” Nadel said.
Congress is expected to consider further extensions of these incentives into 2012 and beyond next year.
For more information about energy efficiency tax incentives, contact us or visit the U.S. Department of Energy website at http://www.energy.gov/taxbreaks.htm.
Copyright© 2010 RISMedia, The Leader in Real Estate Information Systems and Real Estate News. All Rights Reserved. This material may not be republished without permission from RISMedia.
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