2009 North Fork East End Real Estate Jargon

March 29th, 2009 category: East End LI Foreclosures

The onset of a declining real estate market introduces terminology that, thrown around frequently, might be worth revisiting.

Some terms for 2009 that seem to appear frequently:

Lis Pendens. A lis pendens is an initial action of foreclosure by the lender with  notification. A lis pendens generally occurs when a homeowner has missed three months of mortgage payments. Lis Pendens are reported, becoming public record, and afford future glimpse at what may be a trend worth watching in areas of interest.

Broker Price Opinion (BPO).  A Broker Price Opinion is a valuation often requested by banks, and performed by a local broker, to establish market pricing for potential bank owned homes (those that have foreclosed). BPO’s are also used in short sale decisions made by the bank. While not an appraisal, BPO’s are a valuation tool used for distressed properties.* Local brokers called upon to perform BPO’s watch trends with these, as well.

“As Is”. This one needs legal input. While “as is” can be generally defined as “what you see is what you get”, building code violations and other complications (liens, for example) demonstrate the need for a good lawyer reviewing the terms of your agreement.

REO’s.  REO’s are bank owned properties. Often sold “as is”, pricing is often aggressive. Selling quickly requires lower pricing.

Consumer Tax Credit.  This is a tax credit offered by the government to first time home buyers. The current tax credit is $8,000., with no repayment. With…no…repayment. Depending on the purchase price and buyers income, if the full amount isn’t used, the government may refund the difference. The tax credit is implemented when you do your taxes. More here.

Loan Mods.  Loan modifications are an attempt by banks to mitigate their losses by keeping another losing asset off of the books. With so many mortgages in a precarious place, banks offer varying methods of assistance, from deferral of payments, to a temporary break in the payment amount. More here.

Short Sale.  A short sale is the result of a seller owing more on the house than it will sell for, and requesting that the bank accept the potential shortage, were a buyer to make a purchase at an amount lower than the mortgage. Short sale pricing is not always reflective of the banks willingness, so unlike an REO where the maximum price is set (assuming no bidding wars), short sales involve a negotiating process between the sellers and their bank.

Pre-Qual.  A Pre qualification is a buyer assessment by a bank establishing parameters for a purchase based on credit score, income, job history. A typical pre qualification, offered to sellers when a property is located by the buyer, assists the seller in establishing the credibility of the buyer. Unfortunately, the issuing bank doesn’t provide its own prequal…but that’s another subject. A typical pre qualification involves pulling a credit report, and reviewing buyer data- previous years income tax, pay stubs, debt ratios.

Mortgage Contingency.  A mortgage contingency is a stated “out” for a buyer, usually with time frames that must be adhered to. If the buyer is unable to obtain a mortgage commitment by x date through no fault of their own, absent a mutual extension, with timely written notification to the seller, the contract is null and void, with deposits returned. In NY, lawyers implement contingency clauses for contracts.

If you have any questions about the changing market on the East End / North fork of Long Island, we’re happy to help.

To search available condos or homes for sale on the North Fork / East End Long Island or condos on the North Fork of Long Island, click “north fork homes”, enter your area of interest and any parameters, and click “go”- properties for sale include Riverhead, Aquebogue, Baiting Hollow, Calverton, Jamesport, Laurel, Mattituck, Cutchogue, Peconic, Southold, Greenport, East Marion, Orient, and Orient Point, NY.

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This entry was posted on Sunday, March 29th, 2009 at 3:41 pm and is filed under East End LI Foreclosures. You can follow any responses to this entry through the RSS 2.0 feed. You can leave a response, or trackback from your own site.

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