P. Timothy McDonald's Blog

Housing Stimulus Legislation

P. Timothy McDonald (P. Timothy McDonald, Esq.) — Sat, 05 Apr 2008 18:43:25 -0700

It apprears that the Senate has agreed on a piece of legisation to help stimulate the housing market. One of the provissions that apparently would be included in the legislation would authorize a tax credit of $7,000 for anyone that purchases a foreclosed property.

While it may be questionable if the amount of this tax credit is significant enough to spurr increased sales of foreclosed properties. It just may be enough to spur developers to purchase these properties, fix them up and put them back on the market at an increased value. I think we can agree that a reduction in the number of these properties on the market can only be a good thing.

I am interested to hear others perspective on this specific provision in the housing bill.

First Time Home Buyers

P. Timothy McDonald (P. Timothy McDonald, Esq.) — Sun, 30 Mar 2008 21:01:18 -0700

This post is designed for those potential buyers that have been looking but have yet to "pull the trigger". While the media keeps everybody thinking that the economy is aweful, lets think about some important points.

1)If you are planning to buy a home that you plan to live in for a while, it does not matter if the market is a little soft.

2) Some commentators have talked about the "perfect storm". This could be the perfect opportunity. Prices are down adn interest rates are low. If there any reason not to buy now? I think not.

3) The bottom line is the value of real estate will increase again in the near future. If you are thinking of buying a home now is a great time. Prices will never be as low as they are now.

If you have any questions or comments feel free to call me (401) 739-2020.

Purchase and Sales Agreement

P. Timothy McDonald (P. Timothy McDonald, Esq.) — Sat, 29 Mar 2008 21:50:12 -0700

Let me start by saying that you should have your purchase and sales agreement reviewed by and attorney before you sign it. I am going to give you some of the things that you should make sure are in the purchase and sale from a buyers perspective. However, the list is not exhaustive, but merely a list of some of the things you should look for.

First of all, you need to make sure, if you are going to finance the purchase that there is a mortgage contingancy in the purchase and sales agreement. This will say that if you can not get a mortgage under the terms listed, that you will be released from the purchase and sales agreement and get you deposit back.

Second, the should be provisions that allow you or your agents to conduct inspections on the property. THis will allow you to have a property inspector to enter the property and inspect the property. In the typical p & s, it is not really clear what deficiency the inspection needs to find in order to back out of the deal. This seaction of the p & s should be explained in detail.

Insurance. In general, the p & s should require that the seller maintain insurance on the property until the closing.

Seller default. In general, in the typical purchase and sales agreement if a seller defaults and will not go forward with the sale the only remedy is that the buyer gets their deposit back. This section of the p & S can be enhances up to the point of specific performance under which the seller could be forced to sell the property.

Buyer Default. In general, the standard p & s would require that the buyer who backs away without a reason would forfeit the deposit.

If you are purchasing a property and would like to have the purchase and sales agreement drafted for you, Real Estate Attorneys often will draft the P & s as part of the closing process. You should inquire if that is the case with the attorney you contact.

In general, I will draft a P & S as part of the closing. If you have any questions or comments, or would like to discuss your potential purchase of a property, call me, Tim McDonald, today at (401) 739-2020.

Short Sale

P. Timothy McDonald (P. Timothy McDonald, Esq.) — Fri, 28 Mar 2008 05:30:38 -0700

In this market, a number of people find themselves "under water". That is, the value of their home is less than the amount they owe on it. This only becomes a problem if the owner has to sell or needs to refinance because of an upcoming adjustment in their interest rate. In this situation, the homeowner is not going to be able to refinance because of the decreased value. It is possible that the lender could re-write the deal.

If you are in this situation and the lender will not rewrite the deal, there are a number of options that you have in order to maintain your credit as much as possible. Below I list a number of different options. While I have listed them from worst to best, everyones situation is different and whether or not something is good for you or not will depend on your circumstances.

The first is to wlak away and let the home go into foreclosure. This is the least preferable option and will do the most damage to you credit. You stop making payments, the lender forcloses and takes possession of the property. You would still have potential liabilty for the difference between the amount you owed and the lender was able to sell the house for.

Second, if deed in leau of foreclosure. This is where you contact the lender and offer to turn the property over to them in sted of the lender foreclosing. Credit wise, thisis better than foreclosure.

Next, is a short sale. This is where the lender allows you to sell the property for less than the amount owed on the property. There are a number of factors the lender will look at in approving a short sale. A number of them are:

1) how long the house has been on the market.

2) The price the house was listed at and any price adjustments.

3) The Realtors opinion as the the value of the home.

4) The financial circumstances of the owner. This should included any negative changes in you finances, the reasons you need to sell for less, and any other unique circumstances.

5) A purchase and sales agreement for the lower purchase price.

If the lender accepts the short sale for your property, you will be forgiven the amount between the sale price and the price owed. This, is usually the best prospect for most people. The process is long, make sure you have people helping you that have experience in short sales.

Real Estate Closing Process

P. Timothy McDonald (P. Timothy McDonald, Esq.) — Tue, 25 Mar 2008 05:29:01 -0700

We in the industry often forget that a lot of people are new to the closing process. It is with that thought in mind that i write this. I will start at the beginng, with a buyer finding a house. When the buyer finds a house they like, the first step is to put in an offer. It is important that the offer be as specific as possible. Some courts have held that an offer that is accepted is binding even without a purchase and sales agreement. If the offer is accepted, the next step is a purchase and sales agreement. often times this will be put together by one on the Realtors. You may, howevr, have an attorney draft the purchase and sales agreement for you. Once the purchase and sales agreement is siigned, the clock starts to tick. If inspections are authorized by the purchase and sales agreement, there is a limited time to get them done. Also, if the deal is contingent on your obtaining financing, there is a timeline there as well. As part of the mortgage approval process, the home will be appraised and a request for title examination will be sent to a title attorney. The appraisal will come back with the value of the home and the title attorney will issue a commitment to issue title insurance subject to whatever liens are on the property. In most cases that will be a mortgage or two that will be discharged so the buyer takes the property subject only to the new mortgage. Final water, sewer and tax information will be obtained. This is to make adjustments so that the seller pays these costs up to the closing date and the buyer assumes these costs thereafter. The last step is the closing. The closing attorney (can be the same as the title attorney but may be different) explains the documents to the seller and the buyer. The seller usually goes first as they only have a few documents to sign and they are then allowed to leave. That is the process for a typical closing. Of course, each deal is diferent and is you have any specific questions you should contact an attorney.

JP Morgan Purchases Bear Stern

P. Timothy McDonald (P. Timothy McDonald, Esq.) — Sun, 16 Mar 2008 20:00:32 -0700

So JP Morgan has purchased Bear Stern. Think about late last week. The Fed pushed JP Morgan to be the conduit to allow Bear Stern not to fail. This without any down side for JP Morgan. Now, they purchase Bear Stern for 2 dollars a share. At the same time the Fed lowers the Discount Rate 25 basis points.

We must say the Fed is trying as hard as they can to find new ways to counter this crisis. Will they be successful? Only time will tell. They are certianly trying some out of the box thinking. Hopefully, the market can help as spring approached and people decide it is time to move forward with buying a home. That would be the biggest boost to the crisis. It would be more importnat than anything the Fed can do.

Boston Red Sox and spring training

P. Timothy McDonald (P. Timothy McDonald, Esq.) — Fri, 14 Mar 2008 08:10:42 -0700

Regardless of the weather not cooperating here in the North East, Spring is definitely here. the sox are playing in Florida and starting to make moves to get ready for the upcomming season. In fact, yesterday they released Doug Marabelli. At this time, that seems like a good move. Cash is a good catcher right?

Is it really good to have a catcher just ot catch the knuckle ball? No that is a waste of a valuable spot on the roster just to catch Wakefield.

I tell myslef this now, but I can also see myself watching an upcoming sox game and Wakefield is pitching. After watching pass ball after pass ball I can see myself begging the sox to resign Marabelli.

Maybe Cash will be able to step up and catch the knuckle ball. We can only hope.

Spring Training and the Boston Red Sox

P. Timothy McDonald (P. Timothy McDonald, Esq.) — Fri, 14 Mar 2008 07:57:40 -0700

Okay so the weather may not be cooperating here in the North East, but spring is definitely hear. The Red Sox are playing and begining to make decisions to prepare them for the coming season.

So the cut Maribelli yesterday. that makes room for Kevin Cash. I guess that is good for the future. Can we really hold a spot because someone can catch the knuckle ball? I say no right now but Im sure I will change my mind when I am watching pass ball arfter pass ball when Wakefield is pitching.

If that turns out to be the case I can see myself begging the sox to resign Maribelli. Oh well, we will just have to wait and see.

With Weather Like this can spring be far behind?

P. Timothy McDonald (P. Timothy McDonald, Esq.) — Fri, 07 Mar 2008 09:33:15 -0800

Okay so yesterday it was almost 60 degrees. The sun is shinning today but its a little cooler. Can spring be far behind? And with spring comes more people into the market to purchase homes. This happens every spring and there is nothing to indicate this year will be any different other than the doomsdayer and naaysayers.

Prices are down as are the rates. What else could buyers possibly want?

Hey, dont forget to turn your clocks head this weekend. The sun will be going down even later. Yet another reason that spring cant be far behind.

Election Day

P. Timothy McDonald (P. Timothy McDonald, Esq.) — Tue, 04 Mar 2008 06:38:52 -0800

Okay, so its election day in my state and three others. Lets look at what we know. Two people want to make sure we all have health care. Well one says the other wont cover everybody. we have a couple of people who want to end the war in Iraq and one that wants to keep it going. Oh and there is one guy who wont get out of the race until there is absoutely no mathematical chance he can win.

Thats about all we know. Okay, so there may be a few minor points that I left out. How about if we actually have the candadites talk about the economy and propose solutions. Talk about the credit crunch and propose solutions?

I guess hoping for answers before we vote is too much to ask. We ase left to go through position papers and press releases as well as general talk of change and try and guess what each candadite is going to do.

A home more than a home?

P. Timothy McDonald (P. Timothy McDonald, Esq.) — Mon, 03 Mar 2008 07:36:05 -0800

When did a home become more than a place to live? When i was growing up, we lived in the same house till most of the kids had lft and my prents downsized. How did we get to this point where people are upgrading frequestly and moving from one houe to another?

Politics and Business?

P. Timothy McDonald (P. Timothy McDonald, Esq.) — Sat, 01 Mar 2008 21:06:19 -0800

As difficult as this may be, I am interested in what people think about the upcoming election and what effect each candadite would have on the economy. As different people have dropped out of the race, it has limited who we can vote for.

Wehter conservative or liberal, who do you think is best for our industry?

Let all of your contacts know what you do.

P. Timothy McDonald (P. Timothy McDonald, Esq.) — Sat, 01 Mar 2008 20:14:26 -0800

I had an interesting experience the other day. Someone I do business with called me and asked me if I could refer them to a closing attorney that does comercial real estate. This was an eye opening question. I close both residential and commercial real estate. Surely I tell all my contacts that as often as possible. Or do I?

Apparently I dont. Or at least I didnt. It is up to you to let all your contacts know what you do and often. THis is sometimes all the more important if you have a lot of contact with the person. You assume they know. They do not. It is up to you to be sure they know.

It is imprtant that you let people know on a regular basis what its is you do. It may be obvious to you but it is important to let them know all of the aspects of your business. They cant refer to you unless they do.

Where is the purchase market going?

P. Timothy McDonald (P. Timothy McDonald, Esq.) — Sat, 01 Mar 2008 19:33:30 -0800

After having numerous conversations with a number of Realtors, Loan Officers, and others in the industry I have come to the "conclusion" that the purchase market is going to increase in the spring. The realtors I speak to insist that there are a large number of buyers waiting to buy. As I have written in the past, it is not possible to wait for the bottom of the market.

ALthough I did have a coment who insisted that he could see the bottom of the market and would be the won who could make money because he had cash. I wish him luck but stand by my initial premise.

Back to the point for this post. Interest rates have dropped a bit arfter increasing substantially. I believe as do a large number of my collegues that the spring will bring great improvement in the market. Of course, no one really knows excpet the guy that can see the bottom of the market.

I am interested to hear what you all think. I know there will be a number fo naysayers who will say the market will not come back for two years or more. And you know what? That may be correct. I just dont think so and as the saying goes - even a stopped clock is right twice a day.

Putting off Foreclosures or stimulating Sales

P. Timothy McDonald (P. Timothy McDonald, Esq.) — Mon, 25 Feb 2008 07:22:53 -0800

It seems the President and the Members of Congress are trying to do whatever they can to put off the large scale foreclosure crisis. As many of us in the business know, the huge numbers of foreclosures are in and of itself a drag on the market. They keep prices down which in turn prevents people from getting the value they need when they sell their home.

Shouldn't the focus be on stimulating the market for the sale of homes? If this is where the focus was, the value of homes would increase, which in and of itself would reduce the number of short sales and foreclosures. While some of the foreclosures would be put off because people would be allowed to refinance with value in their home, this would significantly reduce the number of short sales because people would have more value in their homes.

The Market is starting to Pick up

P. Timothy McDonald (P. Timothy McDonald, Esq.) — Mon, 18 Feb 2008 08:36:21 -0800

Here we are in mid February and the market is starting to pick up. As I talk to the loan officers I do business with, not only are they seeing an increase in the number of pre quals, they are also sending over more title exam requests.

As apring approaches, I thought the market would pick up as the number of people who have been waiting to buy finally decide they are ready. It seems to be moving alongs a little earlier than I thought.

Rhode Island Real Estate Attorney

P. Timothy McDonald (P. Timothy McDonald, Esq.) — Sun, 17 Feb 2008 06:16:57 -0800

In Rhode Island, a buyer of real estate or a home owner refinancing their current mortgage has the legal right to choose your own title attorney. Often times during the buying or refinancing process, the consumer will be referred to a number of people involved in the process. This could include an appraiser, a loan officer, a home inspector or a real estate attorney.

It is important to explain the role of the title attorney. A lender is not required, under Rhode Island state law to allow the consumer to choose the closing attorney.

The title attorney examines the title on the property. This is where any liens or clouds on title are discovered. The title attorney will often clear any clouds on title before sending the title commitment to the closing attoney and the lender. The title commitment is the document that commits to right title insurance on the property subjsct to any liens on the property being discharged.

The closing attorney is the attorney that actually conducts the closing. This attorney will prepare the settlement statement and the closing package.

Often times, the title attorney will be more invloved in the process. This attorney may attend the closing if you wish and will explain the settlement statement and closing package to you. Its your choice in Rhode Island, you can hire your own title attorney or let someone else pick it for you.

Who said its a bad time to buy a house?

P. Timothy McDonald (P. Timothy McDonald, Esq.) — Wed, 06 Feb 2008 21:05:14 -0800

Okay, so you want to buy a home. But all we keep hearing is the media saying that the housing bubble is bursting, the economy is going into a recession, and the future is uncertain. You need to step back and take a look at the facts, not the media hype.

1) Home prices have come down.

2) Interest rates are low.

3) FHA insured loans allow you to buy a home with as little as 3% down.

Okay, so lets just look at these facts. If you want to buy a home, now is the time. If you wait for the market to improve, prices will rise and intrest rates may or may not. If prices rise and interest rates do as well, you will be able to afford less house. Many people will not be able to aford a home that they can now.

Some of the "experts" say that prices may continue to fall. Could they be right? Of course they could. But lets look at why your buying a house. Is it for investment or is it going to be your home? If it is going to be your home, is it going to be your home for the short term or the long term? If you are looking for a home to stay in for 5 years or more, that is long term.

This essay is for those who want to purchase a home for the long term. Now is the time to act. You can not time the market. If you are looking for the bottom of the market by the time you find it, it will be gone. Real estate has historically gone up over time. If you are intent on buying and holding, it is extremely likely that you will profit.

So the point is that you must look at the purchase of a home for what it is. It is buying a place to call home that comes with tax deductions, a place youwill live in that will also build equity and turn out to be a pretty good invesment. How is renting working out for you?

I truely believe that now is an awesome time to purchase a new home. If you have any questions or would like to contact me you can real me at 401-739-2020.

Tim McDonald

Gordon, Tobin, & Read

When is the right time to contact a real estate attorney?

P. Timothy McDonald (P. Timothy McDonald, Esq.) — Wed, 06 Feb 2008 20:03:10 -0800

So you want to buy or sell a home. When should you contact an attorney? The answer may suprise you. It is never too early to call. Whether buying or selling, you should contact an attorney who concentrates in real estate before you enter into a purchase and sales agreement or, if your selling, even accept an offer.

Sellers, did you know that an offer you accept may be a binding contract that requires you to sell your home according to the terms of the offer even if you have not signed a purchase and sales agreement? Well that could be the case.

For buyers, an attorney who concentrates on real estate closings can be a great resource. Even to the point of refer$ing you to a Realtor or a loan officer. Think about it for an attorney who concentrates in real estate closings knows the Realtors and loan officers who will treat you right.

As an example, I often will draft or review a purchase and sales agreement for no charge if I am going to be the closing attorney. Also, if an issue arises regarding inspections, or any other issue involving your purchase or sale, wouldnt it be a benefit to have a knowledgeable professional to answer your questions?

If you are thinking o about selling or buying give me or another real estate attorney a call, you will be suprised at how much more relaxed you will be during the process.

Dealing with uncertainty

P. Timothy McDonald (P. Timothy McDonald, Esq.) — Mon, 04 Feb 2008 15:41:46 -0800

Okay I know. Maybe you think I'm talking abou the Real Estate Market or maybe interest rates. Maybe I am talking about the Stock Market. Actually, its none of these. Think of all the things that are going on. What was the one thing we in New England could count on this year? Yes it was the New England Patiots. I even watched the 1972 Super Bowl on Sunday because I figured it would be the last time they would show it after the Patriots won and completed and undefeated season.

Well we all know what happened. The Giants beat the undefeated New England Patriots. So after the shock of the loss I think we need to look at the bright side. The Pats had a phenominal season. No team has won 18 games in one season. Tom Brady and Randy Moss broke numerous records. They just couldn't get that final win.

Sure, I was disapointed but I think I am over it now. I am looking at all of the positive thinks that came out of the season.

Speaking of positve things, it is almost time for spring training. Go Red Sox!

Local Mortgage and real estate blog

P. Timothy McDonald (P. Timothy McDonald, Esq.) — Sat, 02 Feb 2008 20:27:48 -0800

I wanted to start a local blog because the market is different in each state. I want this to be a forum for all of us to exchange ideas and marketing and network tips. Remember, together we are smarter than any one of us.

Waiting For the Bottom of the Market

P. Timothy McDonald (P. Timothy McDonald, Esq.) — Sat, 02 Feb 2008 17:03:26 -0800

So here we are 2008 and the first month is in the books. Economists say we are in a recession. Other economists say we are not in a recession. A couple of weeks ago we had the most mortgage applications since 2004. The stock market has a hundred plus point gain one day followed by a hundred point decline the next. The FED lowers the Federal Funds Rate a record 1.25 percent in less than a month.

What does all this mean? It means no one knows what is going to happen with the economy. Even the "experts" cant decide from one day to the next if things are good or if they are bad. When even the experts cant decide what is going to happen what is the average consumer supposed to do?

A lot of consumers interested in buying a home are waiting for the "bottom of the market". These potential buyers need to ask themselves - what is the bottom of the market going to look like? How will I know that the market is at its floor? The simple answer is that no one knows when the bootom of the market is. It could be today, next week or in six months. By the time we can pin point the bottom of the market it will be gone and prices will be going up.

Potential buyers need to ask themselves a couple of questions. First, with home prices lower than they have been and interest rates being good, what is the point in waiting? Everyone wants to think they got the best deal that they possibly could. But if they wait for the bottom they certainly will not. Once they recognize the bottom it will be gone. Also, who knows where interest rates will be? If interest rates rise and they were able to trim another few thousand off their purchase price, did they really get a bargin?

Potential buyers need to review why they are buying a home. First, are they buying it as an investment that they will sell when the market reaches the "top"? I will not get into the point that if this is the case, they will not know when the top is till it is gone, same with the bottom. Or, and more likely, are they buying a home? A place they plan to live in for the next 5, 10, or even 30 years? If that is the case shouldnt they really act now and forget about timing the market?

While I believe that the timing of the market is one of the causes of people failing to act. The other is certainly the perception of the market. But perception has to be an essay for another day.

Looking to meet Realtors and Loan Officers

P. Timothy McDonald (P. Timothy McDonald, Esq.) — Wed, 30 Jan 2008 10:44:15 -0800

I have been invloved in networking pretty heavily here in Rhode Island for the past 3 or 4 years. I would like to get together with loan officers and Realtors so that we can form networking groups. My networking to date has included Chambers of Commerce as well as some of the structured networking groups.

I would like to start putting events together so that we can network with others in our industry. let me know if you are interested.

Real Estate Attorney

P. Timothy McDonald (P. Timothy McDonald, Esq.) — Thu, 16 Aug 2007 10:41:01 -0700

Real Estate Attorney centrally located on Route 117 in Warwick. Available to close loans day or night in our office or in the customers' home or office. All designed to make the closing as convenient as possible for the customer. Experienced closing loans for seasoned home owners as well as first time home buyers.

Our experienced staff will work with you on a proactive basis to eliminate problems before they delay the closing.

Most title exams returned within 24 hours. While you may not need the title back that quickly, our staff wants to ensure that we have time to fix any title issues so the closing is not delayed.

We can close your real estate transactions in Rhode Island, Massachusetts, and Connecticut.

A typical real estate closing will include:

•· Title Insurance (Lenders Policy)

•· Title Exam

•· Title Abstract

•· Title Commitment

•· Clearing Title Issues

•· Obtain Payoff(s) if necessary

•· Obtain Taxes/MLC

•· Courier/Wire Fees

•· Recording of Mortgage and a discharge

•· Recording Service

•· Survey Deletion

•· Closing - anytime/anywhere

•· Disbursement