Alison writes in with a great question, “What proportion of the value of the property would a back-up contract typically involve as a deposit?” To answer this one, I’m going to start by looking at how much is an appropriate earnest money deposit in a “normal” contract and then consider backup contracts.
First, a deposit, [...]
A reader asks:
If a Seller executes a backup contract, is that tortious interference in the primary contract?
This is a situation that both the original buyer, the backup buyer and the seller as well as all the agents involved need to be addressing with their attorneys. The one obvious answer though is “Not always.” [...]
With the Existing Home Sales report for December 2007 due out Thursday, now is a good time to answer this reader question, “What’s the definition of a months supply for existing home sales?” The report, released every month by the National Association of Realtors, gives a top line number of the seasonally adjusted annual [...]
Backup offer questions are really common right now as many sellers in a down market are concerned with holding tight to any buyer and since there are problems in mortgage markets, there’s even more reason for sellers to take backups when they can. But in a market where buyers often have their choice of [...]
If you find this helpful, please vote for it at Millionaire Mommy Next Door before Nov. 4, 2007. Thanks!
This reader question is especially timely given the turmoil in the mortgage markets the last three months:
Who are Ginnie Mae, Freddie Mac and Fannie Mae and what do they do?
Freddie Mac and Fannie Mae are the [...]
One reader wanted to know the “average” loan amount for a household with good credit and an income of $50,000. This is a great example as $50,000 is pretty close to the national median household income of $48,201 in 2006. If your household income is lower or higher than $50,000, just multiply all the [...]
A reader wanted to know whether his 30-year Fixed Rate Mortgage could be foreclosed simply due to a drop in the market value of the property. As with many questions of this type, there are two specific pieces of advice I can give: Read your mortgage or deed of trust and see if [...]
Part of this is really a legal question, so you should definitely consult an attorney unless you can negotiate an amicable end to the contract.
If you what you really want is to break the contract, you’ve already decided that you’re taking a route other than the legal one. The way you break [...]
A reader asked “How are points determined in a mortgage?” There are actually two questions here and a bit of explanation of the basics of “points” will help answer both. Points, or more specifically discount points, are prepaid interest on a mortgage loan. They are sometimes called a “buydown” of the [...]
Since the earlier post on backup offers, several readers have wondered if backup offers are legal. Since I’m not a judge or jury or even an attorney, I can’t really answer that question, but can provide some information on the status of backup offers as a well established real estate contract contingency. If [...]
