Listen up, now. Before you sign anything, you need to know the consequences. Check out the following scenarios and decide which of them you think are legally binding.

A buyer tells a seller he wants to buy his house and will pay his asking price. The seller says, “Fine, we have a deal.” Nothing is in writing.
A buyer makes a written offer to buy a house. The seller signs the offer without making any changes. An hour later he realizes he should have changed the closing date.
A buyer makes a written offer to buy a house. The seller reads it over and makes a counteroffer.
A buyer submits an offer. The seller makes a counteroffer. The buyer signs the counteroffer without making any changes.
The buyer and seller are in the tenth round of offers and counteroffers. Right now the seller is reading over the latest counteroffer from the buyer, who has signed and dated it. Is there a deal?
The seller makes a counteroffer to the buyer in writing, signs and dates it, and gives the buyer a deadline of 5 p.m. Monday to respond. The buyer responds at 7 p.m. The seller says, “Sorry, I accepted a better offer at 6 p.m.” Did the first buyer have a legal deal?
Answers: Go to the head of the class if you said there were binding deals made in examples two and four. The seller in number two very likely can still amend the contract to change the closing date.

As for number six, the first buyer did not have a final deal, but a dispute could easily arise. If an agent were involved, phone calls likely would be placed to make sure the buyer was really backing out. There may have been a legitimate reason for the delay. Anyone working solo would be advised to check with an attorney before accepting the second offer.

Bottom line: Once both parties have signed a document, it is legally binding.

So is there no way out? Remember the contingencies in the contract? The deal could yet fall apart. Among the possible reasons:

There’s a difference between what the bank will loan and what the buyer agreed to pay and she can’t come up with the rest.
The buyer is unsatisfied with the inspection report.
Seller and buyer can’t agree on who pays for which repairs.
The title is clouded by unpaid back taxes, or an ex-spouse is contesting ownership.
There’s almost always a creative way to mitigate a potentially deal-breaking scenario. Experienced agents know what’s worked for others and how to amend the sales contract. But in almost all cases, the seller and buyer have to be willing to return to the dining room table to negotiate a solution.

Real Life: Using the Inspection Loophole
Here’s a story about an attempt to use a loophole. After the inspection of a unique waterfront property uncovered some dry rot, the first-time buyers remained enthusiastic about the home. The sellers agreed to make repairs before the sale closed and immediately hired a contractor.

The buyers started dropping by unannounced, sometimes one of them, sometimes both, while the repair work was underway. One day they would love the property and talk about their planned new color scheme. The next they would sound as if they were suffering from buyer’s remorse. The dithering young couple assured the sellers they were seeking financing. But even the real estate agents were getting exasperated with the couple’s behavior.

The buyers eventually backed out. Their qualms had nothing to do with the property and everything to do with their unresolved personal issues. They said frankly they decided to continue to spend their money on their devil-may-care, “champagne and oysters” lifestyle. Responsibility for a mortgage and maintenance were not their thing. They escaped the deal through the inspection loophole by saying they were unsatisfied with the inspection report.

By now the property had been tied up for weeks. The sellers did not have a backup offer in hand and the market was cooling a bit. Taking a hard look at their options, the sellers decided to pull the property off the market and list it again the next spring.

During late winter, they hired their own inspector to eliminate any surprises that could slow a deal. Anything that might give a buyer pause was repaired. They also installed new carpeting in the master bedroom and hallway and updated paint colors in the bathroom and home office. With the property in gleaming, move-in condition it sold quickly and for a much better price than the previous year’s offer.

Bottom line: For sellers who have time to wait, having a flaky buyer walk away can sometimes mean a better deal.

Ah, the life of a seller. All the weeks of living with everything spiffed up and on public view.

Will you ever again be able to hang your threadbare bath towel on a hook in plain sight? Drop your gym clothes in the entryway? Let your teenage daughter festoon her room with shorts and shoes? In other words, will life ever feel normal again?

Yes. But take a deep breath. What’s coming next is very important and takes a different kind of energy. You are about to negotiate a binding legal contract.

Skills required? An ability to focus on technical detail and a talent for meeting and talking with strangers.

You will hear over and over that the value of your house has nothing to do with what you need to get out of it. But when you have an offer, it’s important for you to know precisely what you need from the sale of your home before you start negotiating with a buyer. One strategy is to make two lists. On one, record the best scenario you can imagine. On the other, list the minimum terms you can accept and still have a deal work for you.

How to Get Started
First determine the minimum amount of money you need to clear on the sale. Will you need to pay off a mortgage? Clear credit card debt? Make a down payment on another house? Make repairs to your present home if the buyer’s inspector finds something dire? Don’t forget your portion of agent commissions and closing costs. And there will be fees, taxes, and insurance at closing.

Speaking of commissions and fees, can you afford to pick up a percentage of what the buyer usually would pay if it means keeping a deal together?

Also figure out how much it costs to live in your home each month for mortgage, taxes, and insurance. This total could help you at the negotiating table when you are deciding whether to accept an offer for less than your asking price, but one that would get you out of the house quickly.

Give some thought in advance to the kinds of personal property a buyer might request and list items that are definitely off limits - the kids’ play set in the backyard, the freezer in the basement, the standalone basketball hoop, the lawn mower. Are any of them deal breakers?

Know your best timing for a move. Do you have a job waiting in another town? Do you want to stay put until your spouse returns from military duty? Would it be ideal to stay in your home until school is out?

Your Two Lists
Here’s an example of how you might apply your lists. Let’s say you’ve already made an offer on another home contingent on the sale of your home by a certain date, so you want a quick sale.

Your best deal might be:
A full price or higher offer
A buyer pre-approved for a mortgage
A buyer willing to waive the inspection, or to be responsible for any necessary repairs if you lower the sales price
A buyer who wants to close in 30 days, sooner if possible
A buyer who doesn’t want any personal property

Your minimum deal might be:
A buyer who offers 7 percent below the asking price
A buyer who agrees to close in 60 days
A buyer who asks only for standard financing, inspection, and clear title contingencies
A buyer who compromises on personal property, giving you the freezer you want to keep

Each offer that comes to you as the seller will set up a different scenario. You’ll have to decide which to reject and which to try to negotiate terms favorable for you. Advance work is time well spent whether you are working on your own, with an attorney, or with an agent.

Seller’s Tip: Dissect your personal circumstances with surgical precision so you are very clear about what you need from a buyer, including the minimum sales price you can accept.

Former Federal Reserve chairman says housing market could stabilize next year or ‘beyond’ - report.

Important facts to be aware of concerning the recent bill that was signed related to the $7,500 tax credit for first time homebuyers. There is some misunderstanding of it’s purpose.

Here’s some important facts  About the First-Time Homebuyer Credit

• Establishes a first-time homebuyer refundable tax credit equal to 10 percent of the purchase price of a principal residence, not to exceed $7,500.
  * This is a tax credit claimed on federal income tax returns. This is not down payment assistance that can be used at closing.
• Requires taxpayers receiving the credit to repay it over 15 years in equal installments by imposing a surcharge on the taxpayers’ annual income tax.
• Allows the credit for purchases on or after April 9, 2008 and before July 1, 2009.
• Phases out the credit for taxpayers with incomes over $75,000 ($150,000 for joint returns).
• Prevents credit from being allowed to any taxpayer for any taxable year if:

1. The taxpayer receives the District of Columbia first-time homebuyer credit.
2. The residence is financed by the proceeds of a tax-exempt MRB.
3. The taxpayer is a nonresident alien.
4. The taxpayer disposes of such residence before the close of the taxable year.

 Bottom Line - If they are first time buyers, it is most often more advantageous to use the state and county assistance programs as these offer down payment assistance rather than just a credit on their taxes and they cannot utilize both! Its one or the other.

FLORIDA 

properties in foreclosure. Recent research indicates that the negative effect of these foreclosures can be felt up to a half a mile away and can depress property values for as long as five years. Under the Senate-passed formula, Florida stands to benefit from $288.8 million in direct funds for neighborhood stabilization with a multiplier effect of an additional $623.5 million as the grants are leveraged to create new jobs as houses are rehabilitated and returned to productive use. The estimated overall economic benefits of the neighborhood stabilization grants are $912.3 million in direct, indirect and induced activity at the state level. It is estimated that these funds would be used  to restore 8,669 properties to productive use, providing safe, affordable housing to its occupants. Rehabilitating those houses is anticipated to generate 5,813 new jobs, most of which will be in construction, but will also stimulate jobs in retail, business services and the restaurant industry. In addition, localities can expect to see a direct return of$12.7 million in property taxes (since in many cases, banks will not pay taxes on properties they do not expect to sell) as well as a savings of$86.7 million on trash collection, police, and fire services that they must otherwise expend on foreclosed and abandoned properties. This analysis does not include the property tax revenues that will be retained from properties no longer at risk of significant declines from being in close proximity to foreclosed and abandoned houses.