All About Easements: The Easement Appurtenant

An easement appurtenant gives a property owner a right of usage to portions of an adjoining property

By Jeff Sorg, OnlineEd Blog

(April 5, 2019)

(PORTLAND, Ore.) OnlineEd – An easement appurtenant gives a property owner a right of usage to portions of an adjoining property owned by another party. The property enjoying the usage right is called the dominant tenement, or dominant estate. The property containing the physical easement itself is the servient tenement since it must serve the easement use.

The term appurtenant means “attaching to.” An easement appurtenant attaches to the estate and transfers with it unless specifically stated otherwise in the transaction documents. More specifically, the easement attaches as a beneficial interest to the dominant estate, and as an encumbrance to the servient estate. The easement appurtenant then becomes part of the dominant estate’s bundle of rights and the servient estate’s obligation, or encumbrance.

Transfer. Easement appurtenant rights and obligations automatically transfer with the property upon transfer of either the dominant or servient estate, whether mentioned in the deed or not. For example, Taylor grants Madison the right to share Taylor’s driveway at any time over a five-year period, and the grant is duly recorded. If Madison’s property sells in two years, the easement right transfers to the buyer as part of the estate.

Non-exclusive use. The servient tenement, as well as the dominant tenement, may use the easement area, provided the use does not unreasonably obstruct the dominant use.


The exhibit shows a conventional easement appurtenant. The driveway marked A belongs to Parcel #2. An easement appurtenant, marked B, allows Parcel #3 to use #2’s driveway. Parcel #3 is the dominant tenement, and #2 is the servient tenement.

Easement by necessity. An easement by necessity is an easement appurtenant granted by a court of law to a property owner because of a circumstance of necessity, most commonly the need for access to a property. Since property cannot be landlocked (without legal access to a public thoroughfare) a court will grant an owner of a landlocked property an easement by necessity over an adjoining property that has access to a thoroughfare. The landlocked party becomes the dominant tenement, and the property containing the easement is the servient tenement.

In the exhibit, Parcel #1, which is landlocked, owns an easement by necessity, marked C, across Parcel #2.

Party wall easement. A party wall is a common wall shared by two separate structures along a property boundary.

Party wall agreements generally provide for severalty ownership of half of the wall by each owner, or at least some fraction of the width of the wall. In addition, the agreement grants a negative easement appurtenant to each owner in the other owner’s wall. This is to prevent unlimited use of the wall, in particular, a destructive use that would jeopardize the adjacent property owner’s building. The agreement also establishes responsibilities and obligations for maintenance and repair of the wall.

Example: Helen and Jesus are adjacent neighbors in an urban housing complex having party walls on property lines. They both agree that they separately own the portion of the party wall on their property. They also grant each other an easement appurtenant in their owned portion of the wall. The easement restricts any use of the wall that would impair its condition. They also agree to split any repairs or maintenance evenly.

Other structures that are subject to party agreements are common fences, driveways, and walkways.

A negative easement appurtenant does not allow the owner of the dominant estate to cross over the servient estate. Instead, the dominant estate has the right to restrict some activity or use of the servient estate.

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Example: Developer Jovan purchased a tract of land abutting Oceanfront Lake and divided it into two parcels. Lot A is on the shoreline and Lot B is farther back from the shore. Lot B has a good view of the lake because it is situated on higher ground that overlooks Lot A, but it is located behind Lot A and could be lost if Lot A builds a two-story house. Because Jovan wants the best price for each parcel, the view of the lake from Lot B is protected by adding a deed restriction in Lot A’s deed to limit any structure built on Lot A to a single story.

In the example above, the owner of Lot B is the owner of a negative easement appurtenant. The dominant estate, Lot B, can prohibit certain activity on Lot A, the servient estate, that could block or restrict the view of the lake. In this situation, Lot B’s owner does not have an affirmative easement appurtenant and cannot cross over the land of Lot A to reach the lake, since only the view is protected.

Though not applicable to the above example, it is possible to have both an affirmative and negative easement at the same time. If an easement had been created to allow access to the lake as well as to limit the height of any structure, then the owner of Lot B would have both a negative and affirmative easement.

Easements appurtenant are created in any one of the following ways:

By grant or reservation – An easement created by grant or reservation is created by the express written agreement of the landowner. This is most frequently done in the deed but can be done in a separate recorded instrument. When done by grant, the owner of a property gives to someone else the easement right. When done by reservation, the owner of the property retains an easement on land conveyed to another.

By intent or necessity – The right to ingress (entry) and egress (exit) are required by law. Any property that is landlocked, meaning it has no ingress and egress, has these rights and a landlocked landowner has a right to an easement to cross the land of another to reach a public way. This type of easement for a landlocked owner is called an easement by necessity and is outlined in ORS 376. The servient estate in the easement by necessity may be entitled to compensation for the easement.

By prescription – An easement by prescription is the use of the land of another that is:

  • open and notorious (obvious to anyone);
  • actual, continuous (uninterrupted for the entire required period);
  • adverse to the rights of the true property owner;
  • hostile (in opposition to the claim of another, not “hostile” in the common sense); and
  • continuous for a statutorily defined period (10 years in Oregon).

An easement by prescription gives the dominant tenant the right of use, not ownership.

By implication – An easement by implication arises out of the conduct of the parties. This means it is an implied easement, not a written easement. An easement by necessity is distinguished from an easement by implication in that the easement by necessity arises only when “strictly” necessary, whereas the easement by implication can arise when “reasonably” necessary.

Easement by Implication – The right of lot owners in a subdivision to use a roadway on the approved subdivision plan without requiring a specific grant or easement to each new lot.

By condemnation – The government’s right to use the land of an owner is created by the exercise of its right of eminent domain. Eminent domain includes not only the right of the government to obtain an ownership interest in the property of a private owner; it also includes the right of the government to create a use easement over the land of a private property owner to benefit the government-owned land.

Easement by Condemnation – The US Bureau of Land Management uses its power of eminent domain to create an easement of right of way over private property to access government-owned, but landlocked forest land.

Easements appurtenant can be terminated by one of the following ways:

  • By the release of the easement by the dominant owner
  • By merging the dominant and servient lands into one tract
  • By abandonment of the easement by the dominant owner
  • By the purpose for which the easement was created ceasing to exist
  • By the expiration of the time for which the easement was created

©Jeff Sorg, all rights reserved.

 

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OnlineEd blog postings are the opinion of the author and not intended as legal or other professional advice. Be sure to consult the appropriate party when professional advice is needed.

For more information about OnlineEd and their education for real estate brokers, principal brokers, property managers, and mortgage brokers visit www.OnlineEd.com.

All information contained in this posting is deemed correct as of the date of publication, but is not guaranteed by the author and may have been obtained from third-party sources. Due to the fluid nature of the subject matter, regulations, requirements and laws, prices and all other information may or may not be correct in the future and should be verified if cited, shared or otherwise republished.

OnlineEd® is a registered Trademark

Four Newer Requirements by Oregon DEQ for Asbestos Removal.

 There’s no known safe level of asbestos exposure

By Jeff Sorg, OnlineEd Blog

(April 4, 2019)

(PORTLAND, Ore.) OnlineEd – The Oregon Department of Environmental Quality regulates the handling, removal and disposal of asbestos-containing material to protect public health and the environment. These are four newer requirements by Oregon DEQ for asbestos removal.

1: Residential renovation asbestos survey
All houses and other residential buildings constructed prior to 2004 must now have an asbestos survey conducted by an accredited inspector prior to demolition and renovation activities, with one exception. Owner-occupants doing their own home renovation work are exempt from this rule. This exemption does not apply when the residence is going to be demolished. Previous rules exempted residential renovation projects from the asbestos survey requirement that applied to commercial projects and residential demolition projects. However, residential property owners and contractors were still required to follow asbestos abatement requirements for licensing, certification, notification, handling, packaging and disposing of asbestos. Requiring an asbestos survey for residential renovation projects ensures property owners and contractors know whether or not materials planned for renovation contain asbestos. This requirement reduces the risk that homeowners, contractors, neighbors and disposal site workers could be inadvertently exposed or sites contaminated with asbestos.

2: Updated disposal requirements for nonfriable materials
Nonfriable asbestos waste must now be packaged the same as friable waste. Friable materials are those that can be easily crumbled and release asbestos fibers. Nonfriable materials can become friable if improperly handled, increasing the risk of exposure to asbestos fibers. Applying the same packaging standard for nonfriable and friable materials streamlines the packaging requirements
for all asbestos waste and ensures a safer work environment for employees, residents, neighbors and disposal facility workers.

3: Accredited laboratories for asbestos testing
Laboratories analyzing bulk asbestos samples must participate in a nationally recognized accreditation or testing program by January 1, 2021. This new requirement establishes a common level of  competency and reliability in analysis to properly identify asbestos content. DEQ will maintain a public list of accredited laboratories on its website.

4: Asbestos survey reports
Asbestos survey reports submitted to DEQ must now meet standard requirements. This requirement ensures survey reports include all required information. Learn more about asbestos survey requirements at: https://www.oregon.gov/deq/Hazards-andCleanup/Pages/Asbestos-Information.aspx

 

 

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OnlineEd blog postings are the opinion of the author and not intended as legal or other professional advice. Be sure to consult the appropriate party when professional advice is needed.

For more information about OnlineEd and their education for real estate brokers, principal brokers, property managers, and mortgage brokers visit www.OnlineEd.com.

All information contained in this posting is deemed correct as of the date of publication, but is not guaranteed by the author and may have been obtained from third-party sources. Due to the fluid nature of the subject matter, regulations, requirements and laws, prices and all other information may or may not be correct in the future and should be verified if cited, shared or otherwise republished.

OnlineEd® is a registered Trademark

Four Common Listing Agreements Used by Real Estate Agents

Each type of listing agreement allows an agent to market the seller’s property, but they differ when it comes to who else can market it and how the brokerage fee is earned

By Jeff Sorg, OnlineEd Blog

(April 4, 2019)

(PORTLAND, Ore.) OnlineEd – Each type of listing contract allows the real estate agent to market a seller’s property, but the agreements will differ when it comes to who else can market the property or how the brokerage fee is earned. In this post, we discuss the open, exclusive agency, exclusive right to sell, and net listings.

Open – The open listing allows the seller to employ any number of agents at the same time. However, the seller will only owe a commission to the agent who sells the property (the procuring cause of the sale). The open listing agreement also allows the seller to sell the property without owing any commission.

Procuring Cause, as defined by the National Association of REALTORS®, is “the uninterrupted series of causal events that leads to a successful transaction.” It is the way to determine disputes about who deserves a real estate commission for causing a sale. 

The open listing agreement is rarely used in residential real estate because there is little motivation for an agent to promote the property; there is no motivation to cooperate with other agents; and the agent is competing directly with the seller to find a buyer.

Exclusive agency – The exclusive agency listing gives one agent the right to sell the property, but no commission is owed if the seller sells the property. The advantage of the exclusive agency listing over the open listing is that competition from other agents for the listing contract is eliminated. However, the listing agent is still competing with the seller when selling the property and is at a disadvantage because the seller can sell the property for less than the broker, and no commission has to be paid to the agent.

Exclusive right to sell – With the exclusive right to sell listing, the seller employs just one agent. The agent earns their commission if the property is sold by another agent, the seller, or the listing agent.

This is the most used type of listing agreement in residential real estate brokerage. Because the listing agent is assured of a commission if the listing sells during the term of the agreement, the agent is likely to spend time, money, and other resources necessary to market the property, thereby resulting in a more timely sale for the seller. With the exclusive right to sell listing, the agent earns the fee when a ready, willing and able buyer is produced who meets the agreed upon terms of sale stated in the listing agreement, whether or not the seller accepts such an offer.

The exclusive right to sell listing agreement also usually contains a due diligence clause. A due diligence clause requires the principal broker to exercise due diligence in attempting to locate a buyer for the property. The agreement will also include a clause that requires the seller to pay the fee if the property is sold to anyone introduced to the property during the listing period, even after the listing has expired. The period for which this fee is due after the listing expires is negotiated with the seller and becomes a part of the contract at the time of the listing agreement. The purpose of the clause is to prevent a buyer who was introduced to the property during the listing period from purchasing the property directly from the seller minus any commission due to the listing agent.

Net – A net listing is a listing agreement that allows the listing agent to keep everything over the minimum (net) price set by the seller, however, there wouldn’t be any fee owed to the agent if the seller sold for the net amount. Some states and many brokerages do not allow the net listing, and its use is discouraged even in states where it is legal because of its potential for misuse.

 

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OnlineEd blog postings are the opinion of the author and not intended as legal or other professional advice. Be sure to consult an appropriate party when professional advice is needed.

For more information about OnlineEd and their education for real estate brokers, principal brokers, property managers, and mortgage brokers visit www.OnlineEd.com.

All information contained in this posting is deemed correct as of the date of publication, but is not guaranteed by the author and may have been obtained from third-party sources. Due to the fluid nature of the subject matter, regulations, requirements and laws, prices and all other information may or may not be correct in the future and should be verified if cited, shared or otherwise republished.

OnlineEd® is a registered Trademark

78 Percent of Servicemember Loans In 2016 Were VA Loans.

CFPB Releases Report on First-Time Home Buying Servicemembersere VA loans.

By Jeff Sorg, OnlineEd Blog

(March 1, 2019)

(WASHINGTON, D.C.) Consumer Financial Protection Bureau – Today the Consumer Financial Protection Bureau (CFPB) released a report focusing on mortgages made to first-time homebuyers who are serving in the armed forces or who are veterans. The Bureau’s report is the first time researchers have been able to provide a description and analysis of servicemembers’ mortgage choices and mortgage performance, both during and after the housing crisis of the last decade.

When buying a house, servicemembers — defined here to include both those on active duty and veterans — have the option of taking out a home loan that is partially guaranteed by the U.S. Department of Veterans Affairs (VA). VA-guaranteed home loans differ from other mortgages in several ways including allowing a purchase with no down payment and without mortgage insurance. Servicemembers may also choose other mortgage products, including conventional loans or loans by a different government agency.

Today’s report spans the years leading up to and after the housing crisis. Among the key findings:

  • The share of first-time homebuying servicemembers using VA mortgages increased from 30 percent before 2007 to 63 percent in 2009. Among non-servicemember first-time homebuyers there was a parallel increase in the use of FHA and USDA mortgages. However, whereas non-servicemembers’ reliance on FHA/USDA mortgages declined after 2009, servicemembers’ reliance on VA loans continued to increase. In 2016, 78 percent of servicemember loans were VA loans.
  • The greater share of VA loans among servicemembers was part of a larger shift among consumers (both servicemembers and non-servicemembers) away from conventional to government-guaranteed mortgages between 2006 and 2009. Conventional mortgages—that is, non-government-guaranteed mortgages—were about 60 percent of loans among first-time homebuying servicemembers in 2006 and 2007, but this share declined to 13 percent by 2016. By comparison, the conventional loan share among non-servicemembers fell from almost 90 percent before 2008 to 41 percent in 2009, then increased back to 60 percent in 2016. The combined share of FHA and USDA mortgages to these borrowers increased and then decreased accordingly.
  • The median loan amount for first-time homebuying servicemembers with a VA loan increased in nominal dollars from $156,000 in 2006 to $212,000 in 2016, closely tracking the median value of conventional home loans taken out by non-servicemembers. By contrast, the median loan amounts in nominal dollars for servicemembers who used conventional or FHA/USDA mortgages during this period were lower in value compared to VA loans and increased at a slower pace, growing from $130,000 in 2006 to $150,000 in 2016.

The Quarterly Consumer Credit Trends report, “Mortgages to First-time Homebuying Servicemembers,” is available at: https://content.consumerfinance.gov/data-research/research-reports/quarterly-consumer-credit-trends-mortgages-first-time-homebuying-servicemembers/

 

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OnlineEd blog postings are the opinion of the author and not intended as legal or other professional advice. Be sure to consult the appropriate party when professional advice is needed.

For more information about OnlineEd and their education for real estate brokers, principal brokers, property managers, and mortgage brokers visit www.OnlineEd.com.

All information contained in this posting is deemed correct as of the date of publication, but is not guaranteed by the author and may have been obtained from third-party sources. Due to the fluid nature of the subject matter, regulations, requirements and laws, prices and all other information may or may not be correct in the future and should be verified if cited, shared or otherwise republished.

OnlineEd® is a registered Trademark

Categories: Mortgage, Real Estate

Oregon House and Senate Pass Sweeping Rent Control – Governor Expected to Sign

Senate Bill 608, Rent Control becomes law just as soon as it’s signed by the governor – some say as early as March 1 

By Jeff Sorg, OnlineEd Blog

(February 27, 2019)

(PORTLAND, Ore.) OnlineEd -Senate Bill 608, Oregon’s sweeping rent control bill, becomes law just as soon as it’s signed by the governor – some say as early as March 1. The bill, passed by the Oregon House and Senate, among other things, eliminates no-cause evictions after the first year of occupancy and adds for-cause reasons to evict including a sale to someone who will move into the property, the landlord or landlord’s family member wants to live in the property, and removal of the property from residential use, provided the landlord gives the tenant a 90-day notice and pays the tenant’s relocation expenses in the amount of one month’s rent. Rents cannot be raised more than 7% plus the consumer price index (CPI) in 12 months. Landlords cannot increase rents in the first year for a month-to-month rental agreement and have to give a 90-day notice after that.

Because the bill has an emergency clause, it will become effective when signed by Oregon’s Governor Brown.

To read a summary and FAQ about the bill, please see the release by the Oregon Association of REALTORS®.

 

 

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OnlineEd blog postings are the opinion of the author and not intended as legal or other professional advice. Be sure to consult the appropriate party when professional advice is needed.

For more information about OnlineEd and their education for real estate brokers, principal brokers, property managers, and mortgage brokers visit www.OnlineEd.com.

All information contained in this posting is deemed correct as of the date of publication, but is not guaranteed by the author and may have been obtained from third-party sources. Due to the fluid nature of the subject matter, regulations, requirements and laws, prices and all other information may or may not be correct in the future and should be verified if cited, shared or otherwise republished.

OnlineEd® is a registered Trademark

Categories: Real Estate

Zillow Offers Heads to Portland, OR

Is it time for real estate agents to pay attention and get on board with Zillow Offers?

By Jeff Sorg, OnlineEd Blog

(January 17, 2019)

(PORTLAND, Ore.) OnlineEd® -In 2019, Miami, Minneapolis-Saint Paul, Nashville, Orlando, and Portland will give home sellers the option of requesting a “no-obligation” cash offer from Zillow to buy their homes, according to a recent announcement by Zillow®. It is expected by Zillow that Zillow Offers will be active in all five of these markets 2019; the program is already active in Raleigh, Charlotte, Denver, Phoenix, Atlanta, and Las Vegas markets.

“Since launching Zillow Offers just nine short months ago, we have been continually excited by the strong demand from homeowners throughout the country and are constantly getting asked when Zillow Offers will come to their market,” said Zillow Brand President Jeremy Wacksman. “It’s clear people want a convenient, stress-free way to sell their home, and real estate professionals are eager to work with us to leverage Zillow Offers as a way to build their local businesses. With today’s announcement, we are excited to continue to rapidly scale Zillow Offers throughout the country and we are well on our way to delivering a simple, on-demand real estate experience to consumers in at least 14 markets this year.”

According to the Zillow Offers FAQ Page for Agents, to request a Zillow Offer, a homeowner in a participating metropolitan area submits their address and answers a series of questions about their home. Later, they may receive an offer from Zillow to purchase the home. If the seller chooses Zillow’s offer, they will have the home evaluated, work with a Zillow Premier Agent to close the purchase, make appropriate repairs and updates and then resell the home using a Premier Agent as the listing agent. The seller can accept or decline the offer from Zillow. If they decline Zillow’s offer, Zillow will present the opportunity to connect with a local partner brokerage and agent to sell the home on the open market.

Zillow is free to home buyers and sellers, offers some free services and postings to real estate agents, and offers additional services and charges fees to be a Premier Agent based on zip code, competition, and home prices within those zip codes.  To explore pricing and learn more about how to get started with Premier Agent Advertising, agents can visit the Zillow website and fill out their contact form or call them at 855-657-6611.

Regardless of how agents feel about this type of business model through Zillow, it’s probably time to at least pay attention to it and do some research. A simple search for “Zillow offers” should return enough information to help agents make an informed decision.

Zillow® is a registered Trademark of Zillow, Inc. and can be found on the internet at Zillow.com.

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Zillow® is a registered Trademark of Zillow, Inc. and can be found on the internet at Zillow.com.

OnlineEd blog postings are the opinion of the author and not intended as legal or other professional advice. Be sure to consult the appropriate party when professional advice is needed.

For more information about OnlineEd and their education for real estate brokers, principal brokers, property managers, and mortgage brokers visit www.OnlineEd.com.

All information contained in this posting is deemed correct as of the date of publication, but is not guaranteed by the author and may have been obtained from third-party sources. Due to the fluid nature of the subject matter, regulations, requirements and laws, prices and all other information may or may not be correct in the future and should be verified if cited, shared or otherwise republished.

OnlineEd® is a registered Trademark

The US Housing Market Gains Nearly $11 Trillion Since Bottoming Out in 2012

Four of the ten most valuable housing markets are in California – Los Angeles, San Francisco, San Jose, and San Diego

By Jeff Sorg, OnlineEd Blog

(January 3, 2019)

(SEATTLE) Jan. 3, 2019 /PRNewswire/ – The U.S. housing market is more valuable than ever, worth a cumulative $33.3 trillion in 2018. Since the market hit its lowest point in 2012, it has gained $10.9 trillion in value, and is now worth $4 trillion more than it was at the peak of the housing bubble.

A home is the single largest source of wealth for many households, and the collapse of the housing market and subsequent recession demonstrated the importance of housing to the overall U.S. economy.

The California housing market accounts for nearly one-third of the value gained during the nationwide housing recovery. The Golden State’s total housing value has grown by $3.7 trillion since early 2012. It is the only state that has gained more than $1 trillion in value since the market fell.

Ten states have yet to regain the value lost during the Great Recession. Despite holding the number two spot when it comes to dollar contribution to the national housing recovery (a contribution of $937.9 billion, or 8.6 percent of the overall recovery), the total value of all the homes in Florida is still $263.9 billion below its peak level.

“Seen from the rearview mirror, 2018 was a year of unusually strong, stable home value growth across the country,” said Zillow® Senior Economist Aaron Terrazas. “But cracks in the foundation are clearly starting to emerge. During the second half of the year, appreciation slowed sharply in the priciest corners of the country while it picked up in affordable hotspots. Periods of stability often precede periods of instability, and the outlook for 2019 is certainly both cloudier and blurrier than the outlook a year ago. Housing wealth may have touched new highs this year, but home value gains don’t translate into dollars in the bank account unless homeowners opt to sell or borrow against their home and, in contrast to previous housing booms, many Americans have been more reluctant in recent years to spend against their home’s worth. Moving toward an uncertain future, that may prove to be a prescient choice.”

In 2018, the national housing market gained $1.9 trillion in value, or 6.2 percent over the past year.

The New York/Northern New Jersey area is the single most valuable metro, worth $3 trillion, or 9.1 percent of the national housing market. Four California markets – Los AngelesSan FranciscoSan Jose, and San Diego – are among the 10 most valuable metros in the country.

Las VegasSan Jose, and Atlanta gained the most value in 2018 among the 35 largest metros, with each market seeing double-digit growth. Chicago’s housing value saw only minimal gains, up 1.6 percent, or $12.5 billion.

State

2018 Cumulative
Value

Value Gained
Throughout Recovery

Share of Recovery
Value

United States

$33.3 trillion

$10.9 trillion

n/a

Alabama

$295.8 billion

$57.4 billion

0.5%

Alaska

$81.2 billion

$10.4 billion

0.1%

Arizona

$708.1 billion

$296.3 billion

2.7%

Arkansas

$145 billion

$26.1 billion

0.2%

California

$7.9 trillion

$3.7 trillion

33.4%

Colorado

$833.8 billion

$343.3 billion

3.1%

Connecticut

$443.3 billion

$31.4 billion

0.3%

Delaware

$97.9 billion

$20.3 billion

0.2%

District of
Columbia

$131.8 billion

$40.1 billion

0.4%

Florida

$2.4 trillion

$937.9 billion

8.6%

Georgia

$717.4 billion

$275.6 billion

2.5%

Hawaii

$348.3 billion

$109.5 billion

1.0%

Idaho

$151.7 billion

$66 billion

0.6%

Illinois

$952.2 billion

$183.6 billion

1.7%

Indiana

$387.7 billion

$87.9 billion

0.8%

Iowa

$191.4 billion

$49.3 billion

0.5%

Kansas

$180.8 billion

$29.6 billion

0.3%

Kentucky

$244.3 billion

$59.1 billion

0.5%

Louisiana

$263.8 billion

$55.9 billion

0.5%

Maine

$167.4 billion

$44.7 billion

0.4%

Maryland

$675.8 billion

$124 billion

1.1%

Massachusetts

$1.1 trillion

$320.5 billion

2.9%

Michigan

$738.2 billion

$292.9 billion

2.7%

Minnesota

$510.8 billion

$159.9 billion

1.5%

Mississippi

$147 billion

$14.6 billion

0.1%

Missouri

$421.6 billion

$97.6 billion

0.9%

Montana

$98.5 billion

$21.2 billion

0.2%

Nebraska

$120.2 billion

$33.6 billion

0.3%

Nevada

$322.5 billion

$174.2 billion

1.6%

New Hampshire

$156 billion

$43.5 billion

0.4%

New Jersey

$1.1 trillion

$182.7 billion

1.7%

New Mexico

$139.8 billion

$19.6 billion

0.2%

New York

$2.5 trillion

$672 billion

6.1%

North Carolina

$805 billion

$204.7 billion

1.9%

North Dakota

$54.4 billion

$17.5 billion

0.2%

Ohio

$695 billion

$172.5 billion

1.6%

Oklahoma

$200 billion

$41.2 billion

0.4%

Oregon

$451.8 billion

$182.9 billion

1.7%

Pennsylvania

$942.8 billion

$160.4 billion

1.5%

Rhode Island

$111.6 billion

$27.6 billion

0.3%

South Carolina

$332.5 billion

$86.5 billion

0.8%

South Dakota

$56.3 billion

$14.7 billion

0.1%

Tennessee

$469.1 billion

$144.4 billion

1.3%

Texas

$1.7 trillion

$495.2 billion

4.5%

Utah

$339.2 billion

$140.4 billion

1.3%

Vermont

$60 billion

$6.1 billion

0.1%

Virginia

$912.5 billion

$158.6 billion

1.5%

Washington

$1 trillion

$471.2 billion

4.3%

West Virginia

$83.9 billion

$18 billion

0.2%

Wisconsin

$465.5 billion

$117.6 billion

1.1%

Wyoming

$52 billion

$10.3 billion

0.1%

 

 

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OnlineEd blog postings are the opinion of the author and not intended as legal or other professional advice. Be sure to consult the appropriate party when professional advice is needed.

For more information about OnlineEd and their education for real estate brokers, principal brokers, property managers, and mortgage brokers visit www.OnlineEd.com.

All information contained in this posting is deemed correct as of the date of publication, but is not guaranteed by the author and may have been obtained from third-party sources. Due to the fluid nature of the subject matter, regulations, requirements and laws, prices and all other information may or may not be correct in the future and should be verified if cited, shared or otherwise republished.

Zillow is a registered trademark of Zillow, Inc.

OnlineEd® is a registered Trademark

Home Buying Sentiment Continues to Diminish

“Rapid price increases have affected the marketplace.”

By Jeff Sorg, OnlineEd Blog

(December 18, 2018)

WASHINGTON (December 18, 2018) National Association of REALTORS®– New findings from a National Association of Realtors® survey show that despite a favorable view on the economy and the direction of home prices, the sentiment on home buying continued to diminish at the close of 2018 – though a majority still think it is a good time to buy. Consumer sentiment about home buying weakened in the fourth quarter with only 34 percent strongly indicating it is now a good time to buy, down from 39 percent in the third quarter and 43 percent one year ago. The percentage of those who believe that is not a good time to buy was unchanged in the fourth quarter, remaining at 37 percent, though up from 28 percent one year ago.

NAR’s fourth quarter Housing Opportunities and Market Experience (HOME) survey1also found that a majority of those polled, 59 percent, believe that the economy is improving. Optimism is the greatest among those who earn $50,000 or more. Fifty-three percent of those in urban areas said the economy is improving, compared to 71 percent of respondents in rural areas.

NAR’s chief economist Lawrence Yun says rapid price increases have affected the marketplace. “Consistently fast-rising home prices well in excess of income growth over recent years have left buyers frustrated while slowly enticing would-be sellers to consider listing.”

From 2012 to 2018, median home prices rose 44 percent, while average hourly wage earnings increased by just 16 percent. NAR’s most recent survey asked about home prices over the last 12 months. Sixty-three percent of respondents feel that prices have increased in their communities over the last 12 months, down from the third when 70 percent of respondents believed that prices had increased. Thirty percent feel housing prices within their communities have remained the same.

Americans living in the West, those with annual incomes of over $100,000 and those 45 to 54 years of age are most likely to report that prices have increased in their neighborhoods. Additionally, 67 percent of homeowners, 56 percent of renters and 50 percent of those living with someone else also felt home prices in their communities increased. Forty percent of those earning less than $50,000 reported that home prices had stayed the same. The national median home price as of October was $255,400, compared to $382,900 in the West.

Respondents were also asked for their views on home prices in the next six months. Forty-one percent predict home prices in their communities will stay the same, unchanged from last quarter but up slightly from 40 percent in 2018’s second quarter.

those who said the economy is advancing, 59 percent live in the West, which Yun found interesting. “The West region has a strong job-creating economy, yet it is the West region showing the weakest buyer sentiment because the West region is the least affordable,” said Yun.

Among those who do not presently own a home, 29 percent of those polled said that it would be very difficult to qualify for a mortgage and 30 percent believe that it would be somewhat difficult given their current financial situation (compared to 28 and 31 percent last quarter).

Yun says some of the fourth quarter findings imply that the softening home buying sentiment is less a result of potential buyers holding off purchases in anticipation of lower home prices, but more related to concerns over qualifying for a higher mortgage and the lack of access to affordable home listings. “Perhaps some communities designated as Opportunity Zones can draw real estate developers using tax incentives to build affordable housing,” Yun said.

[Source: NAR Press Release]

 

 

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OnlineEd blog postings are the opinion of the author and not intended as legal or other professional advice. Be sure to consult the appropriate party when professional advice is needed.

For more information about OnlineEd and their education for real estate brokers, principal brokers, property managers, and mortgage brokers visit www.OnlineEd.com.

All information contained in this posting is deemed correct as of the date of publication, but is not guaranteed by the author and may have been obtained from third-party sources. Due to the fluid nature of the subject matter, regulations, requirements and laws, prices and all other information may or may not be correct in the future and should be verified if cited, shared or otherwise republished.

OnlineEd® is a registered Trademark

Categories: Real Estate

Charlotte, N.C. Joins Growing List Where Home Sellers Can Request Cash Offer from Zillow

Zillow Offers soon to be available in eight markets nationwide

By Jeff Sorg, OnlineEd Blog

(December 12, 2018)

 

Home sellers in Charlotte, N.C. can use Zillow Offers to request a cash offer from Zillow to buy their home.  “We couldn’t be more excited to bring Zillow Offers to our first North Carolina market today,” said Zillow Brand President Jeremy Wacksman. “Selling a home can be extremely stressful – it’s one of the largest financial transactions many people will make in their lifetime. Zillow Offers alleviates some of that stress and uncertainty so home sellers can move onto the next stage of their life.”

Zillow Offers is currently available in Charlotte, Phoenix, Las Vegas, Atlanta and Denver and will launch in Raleigh, N.C., Houston and Riverside, Calif. in early 2019, according to a recent Zillow press release.

“Zillow Offers launched in April, and we’ve already helped thousands of home sellers through one of the most stressful times of their life – selling their home,” said Zillow Brand President Jeremy Wacksman. “Many homeowners are trying to time the sale of their current home with the purchase of a new one, and with rising inventory, this process can become even more uncertain. Zillow Offers alleviates the stress and complexity that typically go along with selling a home, and we can’t wait to begin helping Riverside homeowners early next year.”

When Zillow buys a home, it will make necessary updates and list the home for resale on the open market.

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OnlineEd blog postings are the opinion of the author and not intended as legal or other professional advice. Be sure to consult the appropriate party when professional advice is needed.

For more information about OnlineEd and their education for real estate brokers, principal brokers, property managers, and mortgage brokers visit www.OnlineEd.com.

All information contained in this posting is deemed correct as of the date of publication, but is not guaranteed by the author and may have been obtained from third-party sources. Due to the fluid nature of the subject matter, regulations, requirements and laws, prices and all other information may or may not be correct in the future and should be verified if cited, shared or otherwise republished.

OnlineEd® is a registered Trademark

Categories: Real Estate

Legalized Marijuana and the Real Estate Broker (Part 1 of 2)

Legalized marijuana occupies a special niche as a state-legal but federally-illegal product and industry.

By Jeff Sorg, OnlineEd Blog

(December 1, 2018)

(PORTLAND, Ore.) OnlineEd –  State legalization of marijuana should be of special interest to real estate professionals across the country because it has raised issues for both residential and commercial properties. In states such as Colorado and New York, legalization noticeably stoked demand in the commercial real estate market but there are concerns. For example, legal growing operations generally require building modifications to protect the structure from damage due to heat and humidity. Illegal growing operations face the same issues, as well as safety issues caused by improper electrical work. Real estate brokers must also evaluate the ethical implications involved, including reporting requirements and the level of expertise needed to properly assist their clients and customers. And, commercial and residential landlords need to understand their rights, raising the potential problem of unauthorized practice of law already familiar to real estate professionals.

Like any industry, legalized marijuana has some broader economic benefits. The industry creates jobs for production and retail employees, and boosts related businesses such as construction and transportation. States that have legalized recreational marijuana have also seen increased rates of tourism. However, legalizing pot is far from a no-brainer decision for states since each economic benefit seems to also have a variety of societal and logistical difficulties.

Industry observers also tell us that legalized marijuana raises real estate prices at the production and distribution levels. In California, where the weather allows for outdoor growing, prices for farmland rose dramatically after the state legalized adult-use marijuana. Real estate licensees in the Monterey, CA area have reported that an average 10-acre parcel with greenhouses sold for $5 million in 2017, double the price from just the year before.

Indoor operations require space, ventilation, and tremendous amounts of electricity, making urban area warehouses a preferred choice. Commercial warehouse space in Denver, Colorado is more expensive now than before legalization, and vacancy rates in the properties most popular with marijuana growers dropped from 7.9% to 2% in just five years. Lease rates on the same class of properties rose by 56% in that time. Buyers of Denver warehouse space for marijuana production paid more than $80 per square foot in 2014, compared to $40 to $50 per square foot for traditional warehouse uses.

The New York Times, April 4, 2017 printed that “Commercial real estate developers say they have never seen a change so swift in so many places at once. From Monterey, Calif., to Portland, Me., the new [legal marijuana] industry is reshaping once-blighted neighborhoods and sending property values soaring.”

Retail dispensary space is also commanding a premium price compared to other uses. Retail sales locations may require some modifications, such as waiting areas and additional ventilation. For the most part, though, commercial landlords charge dispensaries premium rents simply because of the businesses’ uncertain legal status. Legal marijuana businesses largely rely on cash to pay these additional expenses. Only about 3% of the nation’s banks and credit unions will even deal with marijuana businesses, and even fewer will consider providing financing. Larger independent businesses, then, need deep pockets to start up.

However, the investment community is starting to show interest in the industry. A recent market analysis report estimates that the industry has spent $1 billion in private and public capital since 2014. Cannabis businesses are publicly traded on the New York Stock Exchange and the Toronto Stock Exchange. Some are experimenting with alternative financing models such as real estate investment trusts (REITs), and multi-million dollar private equity funds have been established with the express purpose of investing in marijuana-related businesses.

Legalized marijuana occupies a special niche as a state-legal but federally-illegal product and industry. This contradiction means real estate licensees interested in serving the legalized marijuana industry must tread a careful path between the exuberance of a booming business sector and the continued looming risk of a federal crackdown.

The political climate in the early 2010s allowed real estate licensees and other professionals to explore business opportunities in legalized medical and adult-use cannabis markets. Some representatives of the Trump Administration identify as strongly anti-legalization, and various political pressures may lead to stronger federal enforcement of marijuana prohibition. This uncertainty means that state-legal marijuana businesses have no idea whether they can safely operate. For the real estate professional, this means that marijuana-related business clients and even clients who own property leased to marijuana businesses are at some degree of legal risk. Licenses should alert their clients and customers to this risk and, if necessary, advise them to seek legal counsel.

Even real estate licensees who don’t have an interest in serving the legalized marijuana industry may encounter new issues related to state legalization. Licensees now need to know how to identify a residential or commercial property damaged by cannabis cultivation and residential buyers will want to know whether a marijuana-related business may open near their new home.

Then there’s the issue of whether a landlord may prohibit legal marijuana use. It seems clear that a landlord can forbid marijuana smoking in a rental unit, just as a landlord is free to prohibit tobacco smoking. A landlord may consider allowing or banning other forms of use that are not disruptive to other tenants such as edible or topical forms of marijuana. In certain states, medical users may be exempt from such prohibitions. In California, for example, hindering a tenant’s legal medical use of marijuana is considered discrimination.

Landlords should establish clear marijuana use policies in their leases. In states with legal adult use, the lease should clearly spell out the landlord’s policy. If the landlord wants to ban all marijuana use on the property, consider using language in the lease that prevents use or possession of all drugs considered illegal under state and federal laws, since pot remains illegal at the federal level. Landlords and brokers should be sure to consult a lawyer before drafting any clause, since pot-related laws are still evolving.

Brokers who choose to proceed to work with clients for any marijuana related purchase might find these practices worthwhile:

  • Check with your errors and omissions policy carrier to find out if you are covered for marijuana-related transactions.
  • Disclose and document, in writing, that you notified all parties to the sale or rental of the conflict between state and federal law regarding the legality of marijuana, and that you advised everyone involved to seek legal advice before proceeding. Also, include a statement about the possibility of chemical contamination or structural issues from land or housing used as a grow site.
  • Disclose when you know that property was previously used as a grow site and that there is the possibility of increased mold growth.
  • Advise clients to seek legal counsel before buying, selling, or leasing for a marijuana grow site or dispensary.
  • Advise clients that pot-related businesses are limited in their ability to get financing.
  • Advise landlords and seller-carried financing clients that their underlying financing can be jeopardized if their lender feels a pot business jeopardizes their collateral.
  • Advise buyers, sellers, lessees, and lessors of grow sites and dispensaries that insurance may be difficult to obtain or could be canceled.
  • Advise clients to always check local regulations to see if the location being considered can be used as a grow site or dispensary.
  • Check with your office manager to make sure you can represent clients for marijuana-related transactions.
  • Clients (and brokers) who choose to ignore federal law in favor of state law, should make sure to know local regulations since many areas have opted out of participating in marijuana grow sites and dispensaries through the passage of local ordinances.

Stay tuned for Part 2.

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OnlineEd blog postings are the opinion of the author and not intended as legal or other professional advice. Be sure to consult the appropriate party when professional advice is needed.

For more information about OnlineEd and their education for real estate brokers, principal brokers, property managers, and mortgage brokers visit www.OnlineEd.com.

All information contained in this posting is deemed correct as of the date of publication, but is not guaranteed by the author and may have been obtained from third-party sources. Due to the fluid nature of the subject matter, regulations, requirements and laws, prices and all other information may or may not be correct in the future and should be verified if cited, shared or otherwise republished.

OnlineEd® is a registered Trademark