Latest Event Updates

How are the electoral votes given to states?

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Question: How are electoral votes apportioned to each state?

Answer:   It’s interesting even though this is not a presidential election year.

Referring to the Electoral College, the process that decides winners of presidential elections. Presidential elections are decided by the Electoral College, not by a national popular vote. It is described in Article 2 of the U.S. Constitution. It says each state appoints electors equal to the number of senators and House of Representatives members.

The electors cast votes for president. Electors usually vote how their state did in the popular vote, but they are not required to. Those people are called “faithless electors.”

Each of the 50 states has two senators. House members are determined by population. Minnesota, after the 2010 Census, had eight House members. So Minnesota has 10 electoral votes. The Senate has 100 senators and 435 House members. So the Electoral College has 535 members. To win the presidency, a candidate must get 270 electoral votes.

The 12th Amendment allows the House of Representatives to decide the winner in case no candidate gets a majority. This has happened. In 1824, John Quincy Adams was declared the winner against Andrew Jackson.

The winner of the popular vote does not always become president: Rutherford B. Hayes and George W. Bush lost the popular vote.

Tom also asked if states can split their electoral votes. The answer is yes. Article 2 allows the states to decide how their electoral votes are distributed.

Of the 50 states, 48 have a winner-take-all approach. But two, Maine and Nebraska, award electoral votes based on who wins congressional districts. Maine has done so since 1972 and Nebraska since 1996.

The winner of each state has swept the electoral votes

NAR Submits Comments to FHFA on G-Fees

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NAR submitted comments to FHFA in response to its Request for Input on the guarantee fees (g-fees) that Fannie Mae and Freddie Mac (the government-sponsored enterprises or Enterprises) charge lenders; and to raise concerns about implementation of the proposed increases to both the g-fee and up-front fees charged to borrowers (loan level pricing adjustments or LLPAs). In its letter, NAR stated its opposition to policies that raise fees so high that it directly impacts the cost and, ultimately, the eligibility of many homebuyers. NAR also opposes FHFA policies that will result in billions of dollars of profits for the Enterprises at the expense of home buying taxpayers noting that guarantee fees should protect taxpayers against losses, not increase profits. Additionally, the letter stated that raising the costs of homeownership through increased g-fees and high LLPAs will not bring back the PLS market more quickly but rather it is likely to simply drive borrowers either to FHA or out of the market entirely.

All major regions experienced healthy gains except for the Midwest, which saw a slight decline

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WASHINGTON (August 28, 2014) — Pending home sales rebounded in July and have now risen in four of the last five months, according to the National Association of Realtors®. All major regions experienced healthy gains except for the Midwest, which saw a slight decline.

The Pending Home Sales Index,* a forward-looking indicator based on contract signings, climbed 3.3 percent to 105.9 in July from 102.5 in June, but is still 2.1 percent below July 2013 (108.2). The index is at its highest level since August 2013 (107.1) and is above 100 – considered an average level of contract activity – for the third consecutive month.

Lawrence Yun, NAR chief economist, says favorable housing conditions are behind July’s higher contract activity. “Interest rates are lower than they were a year ago, price growth continues to moderate and total housing inventory is at its highest level since August 20121,” he said. “The increase in the number of new and existing homes for sale is creating less competition and is giving prospective buyers more time to review their options before submitting an offer.”

Yun adds, “More importantly, steady job additions to the economy are helping family finances and giving them added confidence to enter the market.”

The PHSI in the Northeast jumped 6.2 percent to 89.2 in July, and is 8.3 percent above a year ago. In the Midwest the index marginally fell 0.4 percent to 104.6 in July, and is 6.4 percent below July 2013.  

Pending home sales in the South increased 4.2 percent to an index of 119.0 in July, and is now 1.0 percent below a year ago. The index in the West rose 4.0 percent in July to 99.5, but remains 6.0 percent below July 2013.

Yun expects existing-homes sales to be down 2.1 percent this year to 4.98 million, compared to 5.09 million sales of existing homes in 2013. The national median existing-home price is projected to grow between 5 and 6 percent this year and 4 and 5 percent next year.

The National Association of Realtors®, “The Voice for Real Estate,” is America’s largest trade association, representing 1 million members involved in all aspects of the residential and commercial real estate industries.

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1Total housing inventory in July 2014 was 2.37 million existing-homes available for sale, the highest since August 2012 (2.40 million).
 

*The Pending Home Sales Index is a leading indicator for the housing sector, based on pending sales of existing homes. A sale is listed as pending when the contract has been signed but the transaction has not closed, though the sale usually is finalized within one or two months of signing.

The index is based on a large national sample, typically representing about 20 percent of transactions for existing-home sales. In developing the model for the index, it was demonstrated that the level of monthly sales-contract activity parallels the level of closed existing-home sales in the following two months.

An index of 100 is equal to the average level of contract activity during 2001, which was the first year to be examined. By coincidence, the volume of existing-home sales in 2001 fell within the range of 5.0 to 5.5 million, which is considered normal for the current U.S. population.

 

NOTE:  Existing-home sales for August will be reported September 22, and the next Pending Home Sales Index will be September 29; release times are 10:00 a.m. EDT.

Can a seller require?

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Question: Can a seller require a buyer to have buyer’s lender supply information beyond a preapproval letter as a condition upon which seller may (or may not) accept the buyers offer
Answer: Yes. Sellers can impose an array of requirements or specifications upon which acceptance of a buyers offer may be conditioned, provided they comply with Fair Housing and other applicable laws and constraints. If a seller wants the buyer’s lender to verify that certain underwriting requirements or due diligence have been performed to have a better assessment of whether the buyer is truly qualified to obtain the necessary financing, using the “Written Statement” requirement of the financing contingency or negotiating in similar requirements before accepting the agreement are among a seller’s many options.
Information provided by
Brad Boyd,Esq
MNAR Counsel, Thomsen,Nybeck,P.A.

Is Student Debt Impacting the Housing Market?

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Student loan debt is a growing concern for REALTORS®, because of its impact on household formation. What is NAR doing to address the issue of growing student debt? NAR’s 2014 President, Steve Brown.

The 49 percent of Americans who assess that having too much debt from college or student loans is a huge obstacle to home ownership is from National Association of REALTORS®, Housing Pulse Survey, July 2013.

The 29 percent of NAR members who cited their most recent buyer was a first-time home buyer is from the National Association of REALTORS®, REALTORS® Confidence Index. The latest figure from May 2014 is 27 percent.

The 50 percent of home buyers in 2010 who were first-time buyers is historical data from the National Association of REALTORS®, Profile of Home Buyers and Sellers.

Know Your Home Inspector

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From understanding licensing to hiring specialized experts, prepare your clients for the home inspection process. These six tips can help.

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In the typical home purchase, the buyer receives only one expert review of the residence prior to purchase — the home inspector report. While economical and useful, these reports have limits that must be acknowledged. Too often, the significance of this report is overstated, leaving the buyer and seller exposed to unreasonable expectations, which can lead to unhappy clients, disagreements, and even lawsuits. There are several important considerations that you can help your clients understand about their home inspector.

1. Some home inspectors are not licensed

Some states, such as California, have no licensing or state certification for home inspectors. Others, such as Arizona, certify but do not license home inspectors. Many states, including New York, New Jersey, Mississippi, Washington, and others, require home inspectors to be licensed. A license or credential is not a guarantee of competence, but an indication the inspector has completed a minimum level of education.

There are a number of credentialing organizations, including California Real Estate Inspection Association, American Society of Home Inspectors, and the National Association of Home Inspectors. These organizations each have their own qualifications, exams, and code of ethics. Your client should look for an inspector certification by one of these major organizations. Do not accept so-called “company certifications,” which are simply in-house programs and not subject to any industry oversight.

2. Insurance is important

Unfortunately, an inspector can occasionally miss important items that could point toward a significant repair issue. In the event this occurs, your client will be disappointed if the inspector is unable to pay for the repair of the neglected item. Your client should hire an inspector with current liability insurance.

3. Be prepared to recommend a specialized expert

An inspector will sometimes report on a significant item that requires particular expertise. For example, if a question is raised regarding soil stability, your client may need advice from a soil engineer. If a floor seems too bouncy or there are cracks in walls, a structural engineer may be needed. An architect or general contractor might be needed to determine how an unpermitted addition might be legitimized with the building department.

The home inspector is the first but not necessarily the last word on things. Recommend your client bring in further expertise if the report indicates a problem.

4. Home inspectors do not eliminate all risk

The home inspection is only visual. The inspector cannot see inside walls to confirm that the framing is solid or that the plumbing or wiring was properly installed. Exterior finishes typically cover a home’s most important elements, so inspectors look for clues. However, the absence of cracks does not mean a wall is strong, and the absence of stains on the ceiling does not guarantee the roof is watertight.

The typical home inspection contract alerts your client to these limitations. Be sure your client reads and understands this. This is critical to help remind them that the inspector will not tear open walls, expose the waterproofing of windows, or remove any part of the home. The risk of potential hidden problems remains, even after the best visual assessment of the property. 

Your clients believe that your visual inspection (“AVID”) and the home inspection protects them from any problems with the home — but it does not. Help them understand, so their expectations are reasonable.

5. Pick the best, not the cheapest

Your client is hiring expertise and presumably wants the best. Home inspection prices vary and it can be tempting to hire the cheapest. There may be a reason a company’s price is low. Are they new? Do they take far less time on the inspection? Do they have a poor reputation and need a catchy low price to get business? Home inspections are a minuscule cost relative to the total price of a home. Encourage your client to not worry about the price and hire the best available.

6. Let your client analyze the report

Real estate agents are not construction experts. Your expertise is in finding properties for buyers and finding buyers for sellers. You may want to consider offering an opinion or suggestion about the content of an inspection report. That advice should come from a construction expert. Your client should talk to a contractor or other expert about the report if there are questions.

Home inspections are a valuable tool for the home buyer and should be a routine part of the homebuying process. Manage your client’s expectations to enhance a successful relationship. The risk in buying something built by someone else can be reduced, but not completely eliminated. With a qualified and competent home inspector, your client is doing what can reasonably be done.

Foreclosure Rate by States (Two Year Change)

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The steady improvement in house prices and employment coupled with the 2013 refinance boom had a significant impact on foreclosures nationally. Across the country, the foreclosure rate fell dramatically. As depicted below, no state has seen an increase in its foreclosure rate over the 8-quarter period ending in the first quarter of 2014.

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However, some states fared better than others. Florida, California, Arizona and Nevada all experienced significant declines following the bust of the sub-prime market and sharp declines in employment. However, Arizona and California experienced the sharpest declines in their foreclosure rate, respectively. By contrast, the improvements in Florida and Nevada were not as strong.

What’s more so, New York, New Jersey, Maine, Connecticut and Illinois have also experienced stubbornly slow improvement form high levels of foreclosure. The common thread among these states is that they all have judicial process for foreclosures or a process that has moved closer in that direction. While the judicial process can shelter the consumer with important protections, it can also slow or stall market clearing.