This month in Real Estate talks about metropolitan areas in the U.S. where people are happiest and also touches on bank owned properties and short sale. Got a couple of minutes? This is worth watching!

 

 

 

All agreements to purchase and sell real estate contain contingencies about financing, inspections, appraisal and title, among others. Sometimes, there is also a contingency because the buyer has a home that they need to sell in order to buy another. This is the one I wish to talk about here.

In our market (Lafayette, LA), there is a form/addendum Realtors use to outline the conditions of such contingency. The buyer’s current property address is listed as well as a date by which the contingency needs to be removed. There is also a clause in the addendum which states that if the seller receives another offer he wishes to accept, the buyer will have __“X”__ hours to remove the contingency (usually 48 to 72 hours). Failure to do so means that the buyer has to let go of the home (and gets his deposit back).

As a Realtor when I represent a seller, I recommend that they do not agree to a contingency on the sale of another home unless the buyer already has a contract on their home. The reason is simple. Changing the status of a listing from Active to Contingent essentially takes it off the market until the contingency is removed or the home gets back on the market. Most agents do not show Contingent properties to their buyers and days, even weeks, can be waisted in marketing time waiting for the buyer to sell his home. If the buyer has a contract on his home, including a closing date, the transaction has a much better chance of going through and the seller takes less of a risk.

These past few days, I’ve been talking with a For Sale By Owner who has a contract on his home and his buyer needs to sell his current home before he can buy his. They did not use a contingency form so there are no deadline involved except for a closing date three months down the road. Furthermore, the buyer does not have a contract on his home and he is currently trying to sell his property by owner.

A few days after he signed this first contract, the seller received another offer on his house that does not include a contingency on the sale of another home. He is now wondering if he can get out of the first contract and accept this second offer.

The simple answer is no. A contract is a contract and it is legally binding when signed by both parties.

If the contract does not include anything about a contingency, the seller cannot cancel the contract because he has another offer he wants to accept (well he can but could be sued). Unless the buyer kindly lets him out of the contract, or they can negotiate terms acceptable to both, Mr. Seller might have to wait three months before he can accept another offer on his home. Such is life. Real estate transactions are not hand-shake kind of deals.

In fact, in the purchase agreement that we use as Realtors in Louisiana, it states that both buyer and seller can be sued for up to 10% of the purchase price if the contract is canceled for a reason other than those written in the agreement. This is serious stuff and it is why all contingencies must be spelled out and in writing. If we are talking about a 300K home, it means that getting out of the contract for no good reason could cost someone 30K. It is worth the risk?

Now available is a beautiful large home on 1.7 acres at 6829 W. Congress in Duson, LA. If you are looking for space, inside and out, and that special country feeling, this is it! This property is located in Lafayette Parish, only minutes from the city.

Here are some of the features for this incredible property:

• 3868 Square Feet Living area
• 5 Bedrooms (smallest 2 bedrooms are 14X14)
• 3 Full Baths
• Master bedroom is 20X20 with 8X10 walk-in closet
• Formal Dinning
• Kitchen with double wall oven, 5-burner cook top, triple sink, large walk-in pantry
• Large utility room with laundry sink

 

 

 

 

 

 

 

 

 

 

Perfect for entertaining outside, the home also includes:

• Beautiful inground pool and park for the kids
• Large shop (40X45) with oversize door for RV
• Guest apartment in shop (with fully equiped kitchen and full bath)
• A total of 1.7 acres

 

 

 

 

 

 

 

 

 

Now offered for $550,000 or $142/sqft. What a deal!

View this home on my web site with 20+ pictures.

By replacing an old heating and cooling system, not only can you save money overtime, due to increased energy efficiency, but you could also earn a tax credit worth up to $1,500.

According to Energy Star, a federal program that promotes energy efficiency, about half of what the average household spends on energy bills goes toward heating and cooling. By upgrading your heating, ventilation, and air conditioning (HVAC) to energy-efficient units you can cut utility costs by about 20%, or $200 annually, on average. This type of upgrade doesn’t come cheap, so to help offset the cost, the IRS allows a tax credit worth up to $1,500 on eligible HVAC systems put into service during 2009 or 2010. Your tax adviser can help you claim the tax credit, and advise you if the work you did or are going to do qualifies.

Pay attention to efficiency ratings

The Energy Star seal of approval alone isn’t enough to garner the federal tax credit. Credit-eligible (http://www.energystar.gov) gas furnaces (either natural gas or propane) must have AFUE ratings of 95% or greater; oil furnaces, 90%. A boiler must have an AFUE of 90%. You’ll want to hire an HVAC contractor to calculate the size of the equipment needed for your home. Be cautious of bidders who take a one-size-furnace-fits-all approach. Air source heat pumps (http://energystar.custhelp.com) and advanced main circulating fans can also qualify for the $1,500 tax credit.

Technically, a homeowner could replace either a furnace or a central air-conditioning unit and be eligible for the tax credit. Practically speaking, you probably will have to replace both for the A/C to qualify, says Enesta Jones, a spokeswoman for the U.S. Environmental Protection Agency. Most homes have split systems made up of an outdoor condenser and compressor that are connected to an indoor air handler that’s part of the furnace. Split systems must have a SEER rating of at least 16 and an EER rating of at least 13. The higher the rating, the more energy efficient the unit. A package A/C system, which houses all of its components outdoors, requires lower ratings. The tax credit is aggregated for all qualifying energy upgrades-insulation, roofs, windows, and so on-so you can’t claim separate $1,500 credits for each project. Only improvements to your existing primary residence count. New homes and second homes are excluded.

HVAC’s value goes beyond savings

There are other benefits to upgrading you HVAC system, primarily the increased comfort level you’ll experience in your home and the lowering of the use on non-renewable fossil fuels. One of the other big benefits is the value it will add to your home when it comes time to sell. That doesn’t mean you’ll recoup the whole cost of installing the new system, but potential buyers will be more attracted to your home, and will be less likely to request or need expensive HVAC repairs. Increased salability is especially important in today’s market.

This article provides general information about tax laws and consequences, but is not intended to be relied upon by readers as tax or legal advice applicable to particular transactions or circumstances. Readers should consult a tax professional for such advice, and are reminded that tax laws may vary by jurisdiction.

This is the home sales report for January and February 2010. In January, there were 128 home sold in Lafayette parish and 182 in Acadiana. In February, home sales were down by 3 in Lafayette parish with 125 homes sold but up by 5 for the Acadiana area with 187 homes sold.

 

If we compare this year’s sales with 2009 for Lafayette parish, more homes sold in January this year but less in February.

There are currently 2167 homes available in all of Acadiana according to our Multiple Listing Service and of these, 1209 are in Lafayette parish.

There are currently 525 home sales pending (or under contract) in Acadiana and 346 in Lafayette parish.

To view all available properties in Acadiana, visit my web site.