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What is a Contract for Deed Purchase?

Buyers Information, Financing 1 Response »

Jul 282010

Contract For Deed

I recently received an inquiry asking for help understanding what is a Contract for Deed. Please understand that you should always consult an attorney for legal advice and their perspective on the mechanics of this process.

That being said, essentially a Contract for Deed, or Land Contract, Contract Sale, etc is an arrangement whereby the seller holds title to the property until the buyer makes all the payments required by the contract/agreement. Should the buyer default during the prescribed time period, monies paid to the seller are essentially treated as rent and no equity is accrued by the buyer.

This type of arrangement can be used when a buyer has little or no down-payment funds and a seller has no need for the equity in the property being sold and can, in essence, finance the buyer’s purchase. Typically buyer and seller agree on a price for the property and terms of purchase. Usually a portion of the monthly payment made by the buyer to the seller is credited towards the purchase price of the property for a period of time. During the period of the contract, the Buyer makes installment payments on the purchase price and is entitled to possession and equitable title to the property. The Seller holds legal title and continues to be liable for payment of any underlying mortgage.

There are alternatives to this type of purchase vehicle including FHA loans and other type of arrangements. Contact me for additional information. The links below are for additional information on the subject.

What is a Land Contract? (home-mortgages.suite101.com)
What is a Contract of Sale? (brainz.org)

Naperville single family homes continue strong in February

Buyers Information, Naperville Market Stats, Sellers Information No Responses »

Mar 062010

: Image via Wikipedia

National news in housing has been mixed lately, with home sales down over previous months but still higher than a year ago. The latest NAR report is available here. The numbers for Naperville single family homes continue steady on a month over month basis and stronger than a year ago. All statistics used in these reports come directly from Terradatum Inc. Their source is reported multiple listing service transactions.

Sold Homes: The average price for a single family home in Naperville sold for $423,729 in February 2010. That is an increase of 4.9% from the February 2009 average price of $404,026. Median prices were down at $315,080 vs $345,000. The gap between average and median price is typically around 12%. Last month it was 16%: this month it is almost 26%. That type of increase is only going to be caused by a wider range of prices above the median – an indicator that the upper levels of the Naperville housing market have started, and continue to move. Over the last two months the gap is widening.

The number of units sold is also up for February 2010 vs February 2009 at 52 vs 39 or a 33% increase. Homes under contract had a much sharper increase to 106 from 65 for the same period one year ago; an increase of 63%. (Both of these numbers are higher than January 2010 also!)

Inventory for homes in NAPERVILLE, IL All ZIP Codes

Months Supply of Inventory is a measure of how long, at the current rate of sales or absorption, would it take to sell out the market. The February MSI is 7.7, vs 14 a year ago – a decrease of over 46%. On a national level, the number is closer to 16 for this February and 24 months for last year at the same time – another indication that Naperville trends differ substantially from national numbers.

As always, if you want more detailed information or to look at the numbers on a more hyper-local level (zip code or subdivision) simply Order your free Market Report or drop me an email.

Area variations in Naperville single family home pricing

Around Naperville, Buyers Information, Naperville Market Stats, Sellers Information 1 Response »

Mar 012010

In talking with new homebuyers in Naperville or transferees, I am often asked what a typical home goes for in Naperville and how much that has changed in the last several years. And the answer? It depends; what part of town (zip code) and even within a zip code, what subdivision. The following charts give a good picture of just home wide that variation is. Of note also is the differing trends by area.

As you can see, the first chart shows all of Naperville single family homes combined. Median price has dropped from around $508,000 13 months ago to a low in November of right around $480,000. Since then we have seen a recovery in prices to just under $490,000. Keep in mind, that median price in Naperville is generally about 12% lower than average price.

Our first breakout by zip code looks at 60540 home prices. During the same time period those have gone from a high of about $590,000 to just under $500,000 in August 09 – a sharp drop over a 4 month period. Since that time median prices have been drifting in a range of $490,000 to $500,000.

Next we look at home prices in 60563. Here we see a start around the $429,000 level with a decline to the low $390,000′s in December 09. Since then we have seen a sharp rebound to about $411,000 through February 2010.

Median home prices in 60564 have yet to see much of a recovery. Since April of 09 median pricing has gone from $568,000 to about $532,000 in February 2010.

Finally we look at 60565 home prices. This area of Naperville has weathered the past year much better than any other. In fact, the median price at the end of February 2010 of $445,000, is above the median of $430,000 in April 09! There had been a rise last summer to near the current level but there was a late year valley down to the low $430′s.

This is the maximum break out level for these charts. If you want to look deeper into your specific area or subdivision, drop me an email and we can take a look.

peace

A strong January for Naperville single family home sales

Buyers Information, Market Statistics, Naperville Market Stats, Sellers Information 1 Response »

Feb 072010

Image via Wikipedia

We are seeing a lot of numbers lately on this housing trend or that particular statistic on a national or regional basis and those are all well and good, but as always, here we look at what is happening to prices and sales activity for single family homes in Naperville. All statistics used in these reports come directly from Terradatum Inc. Their source is reported multiple listing service transactions. After an interesting 2009, how did 2010 start? Let’s look:

Sold Homes: The average price for a single family home in Naperville sold for $444,261 in January 2010. That is an increase of 16.1% from the January 2009 average price of $382,554. Median prices were relatively flat at $371,750 vs $366,500. The gap between average and median price is typically around 12%. This month it is around 16%. That type of increase is only going to be caused by a wider range of prices above the median – an indicator that the upper levels of the Naperville housing market are starting to move. It will be interesting to see if this trend continues in the coming months.

The number of units sold is also up for January 2010 vs January 2009 at 44 vs 40 or a 10% increase. Homes under contract had a much sharper increase to 78 from 61 for the same period one year ago; an increase of 28%.

Inventory for homes in NAPERVILLE, IL All ZIP Codes

As always, if you want more detailed information or to look at the numbers on a more hyper-local level (zip code or subdivision) simply Order your free Market Report or drop me an email.

Hottest subdivisions in Naperville

Around Naperville, Buyers Information, Naperville No Responses »

Feb 062010

Image via Wikipedia

Looking for a home in Naperville? Looking to sell a home in Naperville? Ever wonder what subdivisions have the most activity in terms of homes sold? The table below shows the Top 20 that have had the most single family homes closed within the last 24 months (2008 thru 2009). Want to know what is for sale in that subdivision? Just click on the name and you will quickly see what is currently on the market.

Rank	Subdivision	# Closed
1	Tall Grass	109
2	Ashbury	67
3	White Eagle	66
4	Brookdale	46
5	Cress Creek	45
6	East Highlands	42
7	Stillwater	42
8	West Highlands	40
9	Old Farm	39
10	South Pointe	38
11	River Run	34
12	High Meadow	32
13	Lakewood Crossing	30
14	Maplebrook II	30
15	University Heights	28
16	Winding Creek	27
17	Ashwood Creek	24
18	Old Sawmill	24
19	Knoch Knolls	23
20	Mission Oaks	23

Interested in a subdivision not listed here? Click here then enter the Zip code and start typing the subdivision (tract) name. Select the appropriate one and view the homes. If you need additional information, let me know via one of the buttons on the right. Enjoy, and peace.

Zestimate - What it is and what it is not

Buyers Information, Sellers Information 1 Response »

Jan 212010

Education, understanding, and knowledge are key components in buying or selling a home. There are a lot of public domain tools available on the web that, when examined can be confusing. One tool that receives a lot of publicity is the “Zestimate” provided by Zillow. The following video by David Gibbons, Director of Community Relations helps explain what it is, what it is not, how to use it as a tool, and how to help make it better.

That clear things up a bit? Like any tool, the Zestimate on your home or the home you are contemplating purchasing is just one of many to be utilized. If you have any questions or want to discuss further, I am always available. Just click your favorite button on the right or shoot me an email.

peace, Tony

FHA Loan Programs and Limits

Around Naperville, Buyers Information, Government Housing Programs 1 Response »

Jan 182010

UPDATE: 01/19/2010 – Things just got a little tighter in the FHA arena. Check out this post from mortgage professional Dan Green for the details on new downpayment and MIP requirements:

Even in today’s tighter credit markets, there are programs available that assist home-buyers in obtaining mortgages with low down payment requirements. FHA loans are issued by lenders, but insured by the FHA. There are unique advantages and benefits that are only available with FHA (the following is quoted):

Easier to Qualify – Because FHA insures your mortgage, lenders are more willing to give loans with lower qualifying requirements so its easier for you to qualify.
Less than Perfect Credit - Even if you have had credit problems, such as bankruptcy, its easier for you to qualify for an FHA loan than a conventional loan.
Low Downpayment - We have a low 3% downpayment, and that money can come from a family member, employer or charitable organization. Other loans don’t allow this.
Costs Less – Many times, FHA loans have competitive interest rates because the loans are insured by the Federal Government. Always compare an FHA loan with other loan types.
Help You Keep Your Home – The FHA has been around since 1934 and will continue to be here to protect you when the others walk away. Should you encounter hard-times after buying your home, FHA has many options to help keep you in your home and avoid foreclosure.

There are limits to the amount that can be borrowed under this program and they vary by county. There is a chart to the right that allows you to see for your county, what the current limits are. If you have further questions drop me an email or use one of the buttons to the right to get in touch. Thoughts and comments are always appreciated.

Do Federal Home Loan Programs Help or Hurt? (homeloans.org)
2010 FHA Loan Limits Released (movephilly.blogspot.com)

And the Naperville housing numbers for 2009 say…..

Buyers Information, Market Statistics, Naperville Market Stats 1 Response »

Jan 062010

Continuing from the previous post on Naperville single family home sales activity we are going to look at pricing in a little more detail and over a slightly longer term to try and get a feel for where exactly this market is and where it is headed.

The primary data source for the numbers used here is Terradatum Inc, as licensed by MRED, LLC. Some information may come from Altos Research, Inc.

Average Pricing: The bottom line measurement for homeowners is value. While this post won’t get into a philosophical discussion of just what “value” in housing means, we are looking and prices. And in 2009 Q4 vs Q1 showed an increase of 7.8% to $435,612 from $404,150! Sound good? Possibly, but if you look at the averages from the same time period a year ago – Q4 08 vs Q4 09, you will see that prices dropped by an average of 5.4% from $460,316 to $435,612.

Over the longer term Q1 08 thru Q4 09 we see prices have dropped, on average 11.7% from $493,527 to $435,612, or basically .5% per month over the last 24 months. Extended over a three year window, the overall drop is only 5.5% total! ($460,902 vs $435,612). Certainly much better than the national averages and indicative of the more stable nature of housing here in Naperville.

Median Price for homes in NAPERVILLE, IL All ZIP Codes

Median Price vs Average Price: Typically the difference between the Average Sold Price and Average Median price has ranged from $72,600 to $44,100, for an average difference of $56,000 over the time period studied, or about a 12% variation.

As always, if you want more detailed information or to look at the numbers on a more hyper-local level (zip code or subdivision) simply Order your free Market Report or drop me an email. My next post will look at condo’s/townhome for the same periods. Check back!

540sfq107q409 (82.3 KiB, 139 hits)

Naperville Single Family homes on the rise

Around Naperville, Buyers Information, Market Statistics, Naperville Market Stats No Responses »

Jan 052010

It is time to take a look at the performance in Naperville single family homes on a more long term basis. If you have been following these post in 2009, you know that typically I look at the 12 week period just ended vs the previous 12 week period – basically a rolling quarter vs quarter view. That let’s us see and track recent changes in market to try and spot trends as they are occurring (important if you are trying to catch a wave at a certain point). And 2009 had some quarterly ups and downs. Nationally, and on a statewide level we have been hearing numbers from Case Schiller and NAR that all point to short term improvements in housing numbers. Since real estate is so very local, our concern is Naperville and in particular for this analysis, single family homes, over a longer term to try and see a broader view.

The primary data source for the numbers used here is Terradatum Inc, as licensed by MRED, LLC. The graph is from Altos Research, Inc, a nationally recognized supplier of real estate data.

Supply and Demand: Since market inventory has such an impact on pricing (basic supply and demand philosophy) let’s look at those numbers first. Homes For Sale, are down 18% for Q4 09 vs Q1 09 (1,297 vs 1,583) while homes Under Contract are up 6.6% (225 vs 211) and Homes Sold are up an astounding 92.5% for the same time frame (281 vs 146). So, looks like things really improved in Naperville over the course of 2009.

On a more extended basis the trend is moderated somewhat by a 2008 that was weaker than the past year.. If we look back to Q1 08 thru Q4 09 we see the following: Homes for Sale dropped 20.7% to 1,297 from 1,636. Homes Under Contract are down 12.5% to 225 from 257. Homes Sold increased 44.1% to 281 from 195.

Inventory for homes in NAPERVILLE, IL All ZIP Codes

Standardized Good Faith Estimate & Updated Settlement Statement (HUD-1)

Buyers Information, Financing, Mortgage No Responses »

Jan 012010

Effective today, January 1, 2010 several new procedures and forms go into effect, courtesy of Housing and Urban Development, that, in theory will allow home buyers who are obtaining mortgages to better understand and compare their options. In theory, this will allow them to obtain better loan terms, lower interest rates, and lower closing costs. Copies of both forms are below.

New HUD-1 (1.3 MiB, 133 hits)

New Good Faith Estimate (117.6 KiB, 130 hits)

One of the big benefits is the standardized Good Faith Estimate. In the past, each lender used their own form/format to deliver pertinent information to the loan shopper. Obviously this could lead to making comparisons more difficult than necessary. Now each lender will be using the same forms and as result borrowers will be able to make value comparisons much more easily, and potentially, secure better terms.

Additionally, there are new requirements on lenders as to make sure that quoted amounts do not change between estimate and closing. In fact, some of the items cannot change without affecting the closing date. There are others that can change within certain percentages. As a borrower this gives you some certainty that preciously may not have been there.

Listed below are additional resources for more information. As always, feel free to give me a call 630.542.7732 or email me to discuss this or any other topic further.