On October 7, 2002 the  Des Moines City Council passed the Real Estate Installment Contract Sales Inspection Ordinance with much fanfare. In a nut shell, it requires contact sellers of property located in Des Moines and Windsor Heights to provide a written inspection report to buyers who purchase by land or installment contract. The are a few exceptions of course, some transfers exempt from the ordinance include those made pursuant to a court order, eminent domain, foreclosure or deed in lieu thereof, forfeiture, between joint owners, spouses, parents or descendants, involving a government or by quit claim deed. Ordinance 14,205 became fully effective January 1, 2003.

 So now any person seeking to sell residential real estate by installment-land contract is required to have an inspector who is certified by the city personally inspect the property and then provide the buyer with the written inspection report describing the inspection. The inspection at a minimum needs to include a review of the structural components, exterior, roofing, plumbing, heating, cooling, electrical, insulation and ventilation, interior, fireplace and solid fuel burning appliances. The report then must be on a form approved by the City Neighborhood Inspection Division [NID]. The inspection report costs about $120 to produce and is valid for 60 days. Ina twist, to be eligible an inspector must be a member in good standing of a non-profit, professional association for home inspectors in order to be approved by the NID and the inspector cannot work for the seller. Click here for a list of approved inspectors.

 To make sure the seller complies, the report must be given to the buyer at least fourteen days before the transfer to the proposed buyer and the seller must file then the inspection report with the NID. After that hurdle and within seven days after the transfer, the seller has to file a signed copy of the Installment Purchase Contract with the NID and pay an additional administrative fee of $75.

 If a seller does not  comply with the ordinance it is considered a municipal infraction punishable by a civil penalty of up to $500.00 for each violation or, if the infraction is a repeat offense, by a civil penalty of not more than $750.00 for each occurance. The new rule provides all installment-land contract purchasers with extensive additional information regarding the physical condition of the property that is being purchased. In addition, the ordinance slows down the transaction process to allow the prospective purchaser a minimum of fourteen days to talk to contractors, relatives and anyone else about necessary repairs prior to purchasing the home.

 Furthermore, as of July 1, 2002, state law HF 2565 added further requirements for sales of residential real estate on an installment contract basis. Specifically if a seller makes four or more installment contract sales of residential real estate in a year, considerably greater information must be provided to the contract buyer before the sale.

 The law came about because between 1998 and the year 2000, Des Moines had an estimated 3,336 unregulated real-estate contract sales. The city considered appx. 25% of the homes involved to be in below normal, poor, or very poor conditions. In a few especially egregious cases, unethical contract sales companies sold properties which were condemned and slated for demolition. The most famous among these companies being the Wolford Group, whose owners Rod Wolford Sr and Jr were indicted for fraud related to installment contract sales by the attorney general in the spring of 2003. Wolford Sr. was convicted on 17 counts of fraud and was sentenced to 75 years in prison.Rod Wolford, Jr., pled guilty to two counts of theft in the first degree and one count of securities fraud, and was given a suspended sentence. In 2006 the attorney general ordered over $3 million in civil penalties, restitution, and fees for investigation and attorney costs for the Wolford's many victims.

 Iowa Citizens for Community Improvement, or CCI were instrumental in bringing pressure on the BBB to first revoke the Wolford's affiliation, direct media attention to their activities and expose their practices in order to get the attorney general to indict the men.The CCI estimates that with the passing of the Ordinance and the indictment and conviction of the Wolford's predatory contract sales have all but been eliminated in the Des Moines area.

There was more than just superb Italian food on the menu today Friday November 20th 2009 at Des Moines' Tursi's Latin King restaurant, also served up were heapin helpings of Real Estate Settlement and Procedure changes and hot button issues for real estate agents in Des Moines.

Today's lunch was graciously hosted by Steve SchraderBachar of Wells Fargo Ankeny and Wells Fargo western Iowa division supervisor Larry Geddell. If you don't know Steve you're missing out. Steve is a highly competent mortgage originator who speaks in plain language, works quickly and efficiently, goes to where the client needs him, answers his phone at all hours and times, and gives big hugs (if you want one). Steve can be reached at 515-360-5197.

While we waited for lallygaggers to assemble, agents were abuzz with these topics:

1.) Late HUDs. "Can we get them more than 4 hours before close, pretty please, with sugar on top?"

2.) Smart phones. Absolutely indispensable. Droid had folks intrigued. AT&T might not have the best coverage. Blackberry Storm was panned.

3.) Thin inventory. After the first time buyer frenzy "There's a lot of junk out there."

4.) Underwriting. "Man those people are really trying our patience!"

5.) Appraisals. New rules have the closing process hog tied. It would be better "if we could communicate more freely."

6.) Unemployment. Buyers are holding back "because they want to make sure they still have a job next year."

7.) Tax credit. "Those move up buyers are out there poking around, but they sure are picky!"

8.) Social media. Old school agents are slow to embrace and realize its value but they "Know we need to use it though without coming off like an Encyclopedia Britannica or siding sales person."

RESPA changes looming:

1.) New GFE or Good Faith Estimates required on applications taken after January 1st, 2010, complete with"tolerance levels" for services associated with obtaining the mortgage.

2.)  NEW RESPA reform HUD-1 (4 pages) must closely align with initial GFE.

3.) Comparison chart. Side by side visual will compare final loan terms with GFE.

4.) Revised GFE will need to be provided to a buyer a minimum of 1 business day prior to closing for the buyer to review. If APR increases greater than .125% TIL or Truth in Lending disclosure must be revised a minimum of 7 business days prior to closing.

The lunch was grand, the company grander and the knowledge a good side dish. Nothing like getting together for a leisurely free lunch with colleagues while expanding our horizons. Thanks Larry and Steve!

 Recent Des Moines area MLS sales stats confirmed what many of us already knew, October 2009 was a great month for real estate sales. According to the data, unit sales rose 37.6% from the prior year and days on market fell slightly, however in a good with the bad scenario home prices were also down from the prior year, albeit only a modest 3.6%. Although prices in Johnston fell -14.7% and Clive fell the hardest at -23.4%. Waukee and West Des Moines also posted double digit declines at -16.6% and -11.6% respectively.

Prices in the western suburbs have fallen harder than the metro as a whole due to large numbers of new construction homes priced $250,000 and higher which have not participated in the rally in first time home buyer sales driven by a feared expiration of the First Time Home Buyers Tax Credit.

According to a Des Moines Register article on the subject by Donnelle Eller published November 11th, Des Moines had about 1000 new homes on the market, down 38% from a year ago and down 62% from a high of appx. 2,600 in 2006. Inventory also declined about 8% to 5,409 units according to the article.

With the renewal of the First Time Home buyer tax credit and the extension to homeowners who have been in their homes 5 years or more, we may well experience significantly higher sales this winter than in the several years prior. Traditionally the Iowa real estate market is very sluggish in the winter due to low temperatures, inclement weather and thin inventory. Agents this year however may be encouraging sellers to list their homes through the slow season in light of the tax credit extension and low inventory numbers of first time home buyer homes.

 Data courtesy of The Des Moines Area Assocaition of Realtors.

Des Moines September's home sales rose to from the year earlier due in large part to the home buyer tax credit set to expire on November 30th 2009.

I noticed a lot of activity related to first time buyers both on the buying and listing sides. My feeling is that hesitant buyers who had been waiting all year finally got spooked that the tax credit would not be extended or changed substantially and so went on a buying spree.

Our association president was quoted in an October 13th Des Moines Register article as saying" "I believe there are a lot of first-time home buyers out there trying to get their deal done before the deadline for the $8,000 tax credit," said Kurt Schade, president of the Des Moines Area Association of Realtors.

Some highlights from September:

• 475 sales, or 52% of the total unit sales were for homes priced $100,000 to $200,000
• Less than 40 homes were sold last for more than $300,000.
• Unit sales increased to 913, from 772 the year prior.
• Average sales prices fell to $151,589 from $167,366 the year prior.
• Days on market increased to 100 from 96 the year prior.

 Data courtesy of the Des Moines Area Association of Realtors

This year, 2009, will mark the third year I've had the honor to volunteer to assist in the NAMI Walk sponsored by the National Alliance for the Mentally Ill Iowa Chapter. If you're unfamiliar with NAMI Iowa here's their mission from their website:

"NAMI IOWA is a non-profit, state-wide grass roots organization.  Our mission is to raise public awareness and concern about mental illness, to foster research, to improve treatment and to upgrade the system of care for the people of Iowa. We work to support our mission through education, advocacy and support."

Many people are affected by and struggle with mental illness on a daily basis. Just in the Des Moines area this year there have been at least four incidents where police have been called to apprehend a mentally ill person and the individual has been shot and killed or accidentally maimed or injured. But aside from the high profile cases, many with mental illness are unable to stay employed, care for themselves, or become productive members of society. It is estimated that one if four families contains a memebr who suffers from a serious mental illness.

You can find this years walk in Des Moines' Water Works park by taking Park Ave south to Valley Dr. and by entering the south exit appx. 1 mile off Park, across from the Racoon Valley soccer fields. You will then go left appx. 1 mile more. The way should be clearly marked.

This year's 2009 NAMI Walk IOWA is sponsored by The Des Moines Radio Group and Polk County. All donations benefit NAMI and NAMI Iowa. The walk begins Saturday, October 3rd, 2009 - 8:00 AM Registration Starts, 9:00 AM Opening Ceremony, 9:30 AM Walk Begins, Vendor booths open and activities continue until 11:00 AM.

You can register yourself or a team by clicking on this link,2009 NAMI Walk IOWA , or by just showing up! Last year the walk was able to raise $109,000 from just the Des Moines walk alone. If you have the time and are able we'd love to see you there on Saturday!

You have some clients or a client. They've told you they're first time buyers and they are eagerly seeking to take advantage of the up to $8,000 First Time Home Buyer Credit available at present until November 30th 2009. They are looking at homes right and left. You're calling and making appointments. You are making offers. Agents are asking you, "Are these first time buyers?" So what do you say?

NO WAY!!!!!

I've had several offers recently on my listings where this issue came up. In all cases the Buyer Agent volunteered the buyer status. I appreciated the information which I readily passed on to my seller. However, the Buyer's negotiating position was weakened as a result. Why?

1. Because the seller knows that the buyer, if they can get an accepted offer, will be getting up to $8000 off.
2. Because the seller knows the buyer is in a hurry to get something under contract.

The seller now realizes the buyer has both a big subsidy and urgency. This does not work in the buyer's favor. In fact it probably can be argued that it is better to say that the person is not a first time buyer no matter what. Because then the urgency and subsidy is off the table and the seller is back to square one.

As agents, (fiduciaries) our duties to our clients involve exercising ordinary care and diligence, and by state law we are obligated not to disclose a clients real estate needs, at least in Iowa. So if you carelessly disclose the client status you are likely violating state law and the REALTOR code of ethics. (Standard of Practice 1-9) If it was the case that the client asked me to tell, I'd want to try to educate them about the pros and cons first.

I don't ask the status of the buyer of showing agents on my listings because in my experience agents will readily provide it without me having to even ask! However, often when I'm setting up appointments, selling agents ask me if the client is a first time buyer. My standard response is "No, they're buying this home the hard way, with their own money." But that's just me.

The Iowa Association of Realtors has released complete housing stats for the month of August 2009. Iowa and Des Moines unfortunately bucked positive national trends to post declines in average prices, but posted slight gains in volume(good!), but also in days on market(not good!). Here's a summary:

Unit sales 08/08-08/09: +1.2% From 814 in 08' to 824 in 09'

Average Price 08/08-08/09: -10.1% From 179,053 in 08' to 160,918 in 09'

Days on Market 08/08-08/09: +3.0% From 101 min 08' to 104 in 09'.

With the all the activity occuring with the pending expiration of the first time home buyer tax credit I would have guessed a greater rise in unit sales but the numbers did not bear that out. I wasn't really surprised but the drop in prices however as the inventory foreclosed homes and short sales continues to be robust in the face of Iowa's continued climb in unemployment numbers to 6.8%.

Said Elisabeth Buck, director of Iowa Workforce Development. ".... the state's unemployment rate is likely to remain high into 2010, despite an optimistic forecast of improving conditions in the second half of this year." Somebody should inform Elisabeth that this is the second hald of the year and we're experiencing the third consecutive month of increases in the unemployment rate (and business closures), thereby triggering the federal goverment to extend jobless benefits to Iowa's unemployed by 13 weeks.

Housing data courtesy of Iowa Association of Realtors

Maybe we're behind the curve, or perhaps we're out in front, my suspicion is though that all agents in Iowa will enjoy the new housing stats system unveiled by the IAR in September 2009.

We've always been able to produce reports, but data such as unit sales per month, comparisons to previous years and housing price trends have not been readily available. That's all changed now with the new report system as evidenced by this August 2009 Housing Stats Report. I, like many agents I suspect, was relegated to wait until reading the numbers in the Des Moines Register the day after the figures came from the board. This new system however means I can log-in and easily get the numbers in an easy to read format that I quickly can share with clients and prospects.

Trends are valuable in that listing agents and clients don't have to just guess about what's happening in the area or market, they can have ready access to the data to readily gauge:

1. How aggressive to be on pricing
2. Ascertain number of competing listing
3. Determine whether prices are rising or falling
4. Determine whether days on market are rising or falling

Buyers can also benefit by using the stats to determine:

1. Price trends up or down
2. Declining or accelerating inventory of homes
3. Wheter or not homes on market are within normal ranges
4. Motivations of sellers

If you're looking to buy or sell and would like to analyze the trends to determine your best strategy, give me a call and we'll set up an appointment.

This year, 2009, will mark the third year I've had the honor to volunteer to assist in the Memory Walk sponsored by the Alzheimer's Association-Greater Iowa chapter. Alzheimer's affect so many people which makes this a very important event. Just today I had a client in my office whom I invited to participate in the walk. He had to decline because the very same day, he would be attending his grandmothers funeral who was coincidentally, an Alzheimer's sufferer for many years.

The walk will commence at Des Moines Water Works Park.  Walkers may enter the park by taking Park Ave south to Valley Dr. and by entering the south exit appx. 1 mile off Park, across from the Racoon Valley soccer fields. You will then go left appx. 1 mile more. The way should be clearly marked.

This year's 2009 Memory Walk is sponsored by Care Initiatives. All Memory Walk donations benefit the Alzheimer's Association, the leading voluntary health organization in Alzheimer care, support and research. The walk begins Saturday, September 26, 2009 - 8:00 AM Registration Starts, 9:00 AM Opening Ceremony, 9:30 AM Walk Begins, Vendor booths open and activities continue until 11:00 AM.

You can register yourself or a team by clicking on this link, 2009 Memory Walk, or by just showing up! Last year Alzeimer's.org was able to raise $584,000 nationally through its Memory Walk initiatives. If you have the time and are able we'd love to see you there on Saturday!

Plastered all over the media this past week was news that mortage rates fell for the week ending September 7-11 2009 as a result of Fed auction results. The rates are now near historic lows. Here are a few links to stories about the drop which was announced primarily on September 10th 2009:

http://www.mortgagenewsdaily.com/consumer_rates/106240.aspx

http://www.freddiemac.com/pmms/release.html

http://www.housingwire.com/2009/09/10/weekly-mortgage-rate-dips-to-507-freddie-mac/

http://www.foxbusiness.com/story/markets/industries/finance/freddie-mac-fixed-mortgage-rates-inch-lower/

From the Fox news article above: "The national average interest rate on the benchmark 30-year, fixed-rate loan averaged 5.07% in the week ending Thursday, down from last week's 5.08% and the year-ago 5.93%"

Some pundits are even predicting mortage rates will fall further:

http://themortgagereports.com/2009/09/mortgage-rates-cincinnati-september-10-2009.html

Comparing 5.07%, the new rate, with last years 5.93%, shows that on a $100,000 30 year fixed loan a buyer today would pay $541.11 dollars, compared to $595.06 for the same amount last year, or about 9% less. Wow! What a difference a year can make. With good rates and the $8,000 tax credit in place until November 30th 2009, buying vs. renting just make start making a whole lot more sense to some people.