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Fournier Law Blog

Intelligent legal insight from our team of experienced attorneys.

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Could 2018 Be The Right Time to Sell Your Home?

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If you have been waiting for the right time to sell your home, there are many reasons experts are saying that the time has come.  In an article written by Devon Thorsby, published by U.S. News and World Report, the reasons that 2018 might prove to be a good time to sell a home are listed.

First and foremost, the past few years of low inventory of homes for sale has left prospective home buyers more than ready to scoop up the perfect house.  Their frustration with available homes has led many house hunters to begin their search earlier than normal with the hopes of purchasing a home before other buyers make their offer.

Additionally, interest rates are still relatively low.  They have been slowly creeping up and are expected increase to 5 percent in 2019.  Many home buyers are motivated to purchase a home sooner rather than later in order to secure a lower interest rate.

Thorsby details additional rationale for putting that “For Sale” sign up this year.  Read the entire article here.

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Disappointing Sales Figures for New Homes Reported

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In many parts of the U.S., sales of new homes continued to have a downward trend in February, falling .6 percent from January.  This, according to an article published by CNBC, is the third month in a row that the sales of new homes dropped.

In the article, the details of regional new home sales were provided.  Bringing the U.S. average down were the Midwest with a 3.7 percent decrease in sales as well as the west, with a drop of almost 18 percent.  The south and northeast regions of the U.S., however, saw increases in new home sales of 19.4 percent and 9 percent respectively.

An overall slow-down in sales is being attributed to a shortage of homes, specifically lower priced homes.  As a result, the prices are being driven up, the median price of new homes is up almost 10 percent from last year.  Couple this with rising mortgage interest rates, many first time homebuyers may have a difficult time entering the real estate market.

Read the entire article.

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How Do Chicago Residents Feel About Rent Control?

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If you have ever rented or try to rent real estate in Chicago, you have seen first-hand how rental rates have increased.  Pricing many, wishing to rent property, out of desirable neighborhoods.   What you may not be familiar with is the 1997 Illinois state law, prohibiting rent control in the state, has allowed landlords to significantly raise rental prices and create  “rent-burdened” residents.

However, changes to this law could be considered soon.  If a recent advisory referendum vote is an accurate indicator of how most Chicago residents feel about rent control, ending the ban on rent control will be welcome by Chicagoans.

According to an article published by Crain’s Chicago Business, written by Dennis Rodkin, the advisory referendum was placed on almost 80 precincts’ ballots.  The result was that in each of the 76 precincts, “at least 60 percent of the votes cast were in favor of lifting the ban, and in most the figure was above 75 percent.”  Its seems that lifting the ban is widely supported.  Only time will tell if change to this ban will come as a result.

Read the entire article.

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Will the New Tax Law Affect Your Home’s Value?

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Many read and listened to news reports at the end of 2017 detailing the new tax laws signed by President Trump.  There were many people and news outlets scrambling to understand the changes that were introduced.  Of course, there was much speculation about the impact of the changes.

Recently, CNN published an article detailing how the new tax laws will slowly begin to impact the value of homes across the United States.  In the article, written by Kathryn Vasel, some specific effects are detailed.

For one, the new tax law reduced the amount of interest on mortgage debt eligible for deductions from $1 million to $750, 000.  Vasel explains that many buyers in the market for high-end, high priced homes might be more likely to negotiate a lower price in order to compensate for the smaller tax break.   Purchasing homes might also be less attractive to buyers because they aren’t able to deduct as much of their real estate taxes.  The tax law reduced the cap to $10,000; in many high-cost markets, home owners pay significantly more than $10, 000 in property taxes.

The financial impact of the tax cuts might result in increased interest rates and, subsequently mortgage rates.  An increase in mortgage rates could keep some buyers out of the market and force home sellers to reduce prices in order to attract buyers.

Read the entire article.

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Tips for Protecting Real Estate Consumers from Costly Scams and Fraud

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If you were to ask a room full real estate professionals if any of their clients were victims of wire fraud during a real estate transaction, chances are there would be many who might raise their hands.  In fact, according to an article published by Realtor Mag, “The Threat of Wire Fraud is Real”, “Wire fraud topped the list as a sophisticated scam causing consumers to lose millions of dollars each year”.  As alarming as that idea may be, real estate professionals can put some simple safe guards in place to help protect their clients.

In the article, written by Erica Christoffer and Graham Wood, a number of suggestions are touched upon.  For example, “If you or your agents do engage in a wire transfer with a client, call them on the phone immediately prior to the transfer of funds so they know they’re sending money to the legitimate source.”  Additionally, make your clients aware that you do no discuss personal financial information over e-mail and review with them what your communication practices are.  Hopefully, with this mutual understanding between you and your client, if they receive questionable e-mails, a red flag will be raised immediately before any sensitive financial information is shared.

Clients should also be reminded to not only use strong passwords, but update them regularly.  Perhaps even updating a password just before any wire instructions are sent.  As a real estate professional, you should also follow these guidelines for strong and updated passwords.

Read the entire article.

 

 

 

Photo Credit: Blogtrepreneur

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What Impact with Automation have on Real Estate Needs?

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As the age of automation descends upon us, experts analyze its vast and far reaching economic impacts.  One fairly obvious and direct impact is upon employment, as robots and automation eliminate the need for people to complete certain types of work.

Bisnow.com published an article on September 6, 2017 describing some of the findings of a recent report by Carl Benedikt Frey and Citigroup.   Specifically, the article notes that retail jobs will be severely impacted by automation, with Frey suggesting that the retail industry employment is “likely to vanish”.  The impact of this is broader than the elimination of jobs such as manufacturing, which are geographically concentrated.  Frey indicates, “the downfall of retail employment will affect every city and region”.

As these changes begin to take place, a notable effect is a decrease of a need for retail space, resulting in empty storefronts and malls across the United States.  However, what may not have been anticipated was the increased demand for warehouse space.  It is estimated that more than 2.3 billion square feet of new space will be needed for warehousing between now and 2035.  This could require more “mixed-use development, which normally means residential sitting alongside retail or sometimes offices…” according to the article.

Read the entire article.

 

 

 

Photo Credit: Seth Werkheiser

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Myth Busters: The Truths of Pricing and Selling Your Home

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One of the most important decisions a home owner who has decided to sell their home can make is what the list price of the home should be.  Emotions, financial strains, and decisions based on inaccurate or misunderstood information can lead to a disappointing and frustrating sales process.

In an article published by Realtor.com, Cathie Ericson helps debunk home pricing myths that might have home sellers hung up on their list price.   Reviewing these myths and understanding the truth about the pricing, listing and hopefully selling a home will help sellers start out on the right foot.

One myth sellers may believe that if a home is overpriced, it can just be lowered later without any negative effects.  As Ericson points out, lowering a price is not a quick and easy fix.  Many house hunters notice when a home has been on the market for a while and know when there have been numerous price reductions.   As she states,  “… buyers presume that something must be wrong with it. As such, they might still steer clear, or offer even less than the price you’re now asking.”

When deciding on a listing price, sellers may be turned off by the idea of pricing their home too low, assuming they will not make as much money in the sale.  However, low priced homes might just attract more buyers and the increased interest in the home might result in a bidding war.

The article details the truth behind other myths such as recouping 100% of the cost of home renovations, the real estate agent’s stake in the pricing strategy and the whether all home owners make money on the sale of their home.  Read the entire article.

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Scams Targeting Homeowners: Be Sure You Don’t Fall Victim

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It seems that almost daily we read or hear reports and warnings of scams aimed at consumers which can result in significant financial losses.  It is imperative that consumers remain vigilant in protecting their assets and investments; especially in the age of hacking, privacy breaches, robo-calling and phishing scams.  It can be overwhelming to keep up with the warnings; however, a recent article published by U.S. News and World Report by Devon Thorsby offers some sound and easy to follow advice.

For homeowners and prospective homeowners, down payments sent via wire transfers have ended up in the hands of high tech thieves instead of their mortgage companies.  Emails sent from mortgage brokers to their clients with wire transfer instructions can get intercepted by hackers.  The hackers are then able to change the wire instructions in the e mail prior to the customer receiving the message.  In the end, the customer receives an e mail with modified wire instructions and then ends up wiring the funds meant for a home closing directly to the hackers account.

To avoid this type of scam, one broker indicated “she instructs all of her clients to have the title company and bank communicate directly…and verify where the money is going, what the value number is and what the account number is… in any other situation where you have to authorize your bank or title company to do anything, rather than scanning and emailing any personal information or signed authorization, [she] instructs clients to send it via fax to eliminate the possibility of theft from an email hack.”

Thorsby provides additional advice to avoid telephone phishing scams that can result in financial hardships.

Read the entire article.

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Why Are More Americans Choosing to Rent instead of Buy Homes?

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The debate over why households choose renting over purchasing a home in the United States has been a hot topic lately.  Analysts have indicated the young generation of millennials are not interested in being tied down to home ownership and prefer renting over buying. However, an article published by CNN by Daniel B. Kline, points out that it is not just millennials who are opting to rent instead of making a home purchase.  Kline also notes that the decision to rent may not be a lifestyle choice, but a financially driven decision.

It is true that the number of households renting a home has increased over the past decade; almost by 10 million.  It is also true that 65 percent of household headed by those 35 years old and younger rent their homes.  However, it’s the heads of households aged 35-44 that made the biggest increase over the past decade.  In this age group, “the percentage of renters jumped from 31% in 2006 to 41% in 2016”.   Heads of households between 45-65 renting homes also increased over the past decade.

However, these households may not all be renting based on lifestyle choices.  In fact, research indicates that many who rent homes would actually like to purchase a home someday.  Further, surveys show that 65% of renters indicated that they are renting homes due to circumstances, not purely by choice.  Circumstances such as increased home prices and tougher mortgage standards may be partially to blame.

Read the entire article.

 

 

 

Photo Credit:  Mark Moz

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How Is Student Debt Affecting Real Estate Trends?

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Student debt is a thorn in the side of many college students years after they receive their diploma.  The rising cost of tuition and debates as to whether students should be responsible for paying for their college education have been hot topics for several years.   According to an article published by Bloomberg, written by Chris Bryant, “In the U.S., where aggregate student debt has surged 170 percent in a decade, recent graduates owe $34,000 on average. About 5 percent owe more than $100,000. “

This may not seem like an issue that older generations would be worried about.  Their student loans have long been paid off, they may have even helped finance their children’s college education, leaving them debt free from college loans.  However, as the article points out, this mounting debt is a factor in some negative economic trends that affect many, even older generations.

Because the generation of millennials will be dedicating funds to pay their student loans off, with salaries that have not rebounded from the 2008 recession, their focus will not be on purchasing a home.  They are struggling to set money aside for a down payment.  Missed loan payments for student loans can affect credit scores, making mortgages harder to come by.    As baby boomers look to downsize homes in retirement, it might be difficult to find buyer from the next generation who can afford to purchase it.

Read the entire article.

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