Q: What is a good time frame to place on a backup offer if I want to stay in the loop but still create a short window for the seller to remove the offer that is first in line? –Diane

A: Let’s make sure we’re all on the same page, before I get to your question. What normally happens is that a buyer makes an offer to buy a home. Once the buyer and seller come to a meeting of the minds on the sale price and other terms, the seller signs the offer (or a counteroffer, if any were made) and makes it a binding contract.

In real estate, contracts are generally contingent on a number of conditions — the buyer often retains the right to back out of the contract pending the ability to secure financing, pending inspections, and pending the ability to secure homeowners insurance and title insurance. In an increasing number of cases these days, the buyer also makes an offer contingent on the ability to sell a home.

When a seller takes a backup offer, usually it is in the time frame between acceptance of the first-place offer and the time the buyer removes contingencies. In a normal case, that time frame runs anywhere from 15-20 days — although if the transaction envisioned is a short sale or if the buyer’s contingency involves the sale of the buyer’s own home, that time frame may run longer.

Sometimes the backup offer is put in place, as in the case with many short sales, because the seller knows it may take a very long time — as long as three, six or eight months, sometimes longer — to obtain the bank approval needed for the short sale to proceed.

The seller puts a backup offer in place in order to hedge against the first-place buyer walking away during the long wait. In these cases, the backup offer should plan to be on hold for many weeks or months. And in the event the first-place offer walks away, there are possibly more weeks and months that may pass before the bank finally approves the contract — if it does approve the contract.

In “regular” transactions (i.e., non-short sales), it is rare that a backup offer ever gets put in first place. Rather than a backup offeror placing pressure on the seller to “remove” the first-place offer, a backup offer is usually used by the seller as a strategy to put pressure on the buyer who is in first place.

Sellers frequently, and legitimately, use backup offers to coerce the first-place buyer to actually perform — to close the deal, without requesting repairs or trying to renegotiate the price after the inspections or appraisal come in.

The mere fact that another qualified buyer is chomping at the bit to get the place, wanting it so much that that buyer actually wrote up an offer and got into contract, only works to make the place seem much more desirable than it was before.

Any qualms or concerns or buyer’s remorse magically disappears in the face of a backup offer; if the backup offer is for a higher price than the original, this effect is only amplified!

Not only does the first-place buyer’s emotional attachment skyrocket because someone else desperately wants what they have (or soon will), they also feel that they’ve gotten a great deal and are walking into homeownership with instant equity, as someone else is willing to pay more for the place than they are!

The long and the short of it is that if you make a backup offer, you should do so with no expectation that you’ll eventually get into contract. Hope, sure, but not expectation. And there’s nothing that you can do in particular to lean on the seller, except to offer a lot and cross your fingers.

If the property is not a short sale, you should expect to have an answer on your backup offer within the first-place buyer’s contingency period, roughly 10-20 days. If it is a short sale, it may take many moons to receive an answer, and there’s nothing you or anyone else can do to speed that up.

Tara-Nicholle Nelson is author of “The Savvy Woman’s Homebuying Handbook” and “Trillion Dollar Women: Use Your Power to Make Buying and Remodeling Decisions.” Tara is also the Consumer Ambassador and Educator for real estate listings search site Trulia.com. Ask her a real estate question online or visit her website, www.rethinkrealestate.com.

       

      

 

    

    

     

  

      

 

      

 

   

  

Gaze upward from the heart of Route 117 in Bedford Hills at night, and you may have trouble finding the stars.

But Bedford planners are ready to propose a new, stricter lighting legislation that may darken local skies and conserve energy, according to members of a committee who have worked on the issue since last year.

“We’re actually not changing that much in the code, but are clarifying the language and making it easier to enforce,” said Deirdre Courtney-Batson, Bedford planning board member and “dark skies” committee member, during a recent town board work session finalizing the changes.

For example, the new rules define permissible outdoor lighting to include “building or pole-mounted floodlights mounted at 90 degrees and angled downward.” Such lights must either be invisible beyond the property boundary, turned off by 11 p.m. or controlled by a motion sensor.

Landscape lighting is not regulated, but streetlights, parking lot lights and outdoor building lights would be affected by the legislation. Commerical project planners would be presented with specific lighting guidelines upfront, making site approval plans easier in the end, said Courtney-Batson.

Proponents say the changes will not only enhance star-gazing but will reduce energy use and help the environment. And part of rolling out the new rules will be educating residents, added Courtney-Batson.

“We want people to be aware of the impact of excessive light,” she said. “It’s actually unhealthy to light up your trees at night—they rely on darkness to absorb the passage of time. Studies have shown trees holding onto their leaves too long because of landscape lighting.”

The rules will apply to new residential light fixtures and commercial developments going forward, said town board member Christopher Burdick. “These amendments are prospective—it’s not for people to go back and retrofit any fixtures.”

Holiday lighting will be exempt from the rules, he added. 

“We had much discussion on this, and ultimately decided that temporary exterior holiday lighting shall be excluded. Part of our objective is to make this a more workable law, and after studying other towns, we decided not to address holiday lighting,” said Burdick, amid comments from board members about neighbors who celebrate Christmas or other holidays “year-round” with exterior lights.

After a discussion during the work session about the potential hazards of community members trying to comply with rules measuring light in technical terms, the committee plans to produce a “user-friendly” guide including a conversation chart of watts to lumens—how bright a bulb is—and a definition of footcandles, which measure how much light extends on a surface from a lamp.

The language is necessary for the town to have legal footing to enforce the code, said Courtney-Batson.

Members of the committee also include Stan Starr, Donald Coe, Simon Skolnik, Liz Bailey. Their work included aerial observations, studying lighting codes in other municipalities, consulting with lighting industry experts and the International Dark Sky Association, founded in Tuscon, AZ in 1988.

About 300 counties, cities and towns in the U.S. have adopted dark-sky legislation, according to the IDA, which promotes “lighting what you need, when you need it.”

The town board is expected to formally refer the revised lighting ordinance to the planning board tonight. A public hearing would be scheduled prior to any changes being implemented.

 

 

 

 

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Was This Old House an Historic One As Well?

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Kevin and Steve Helmes address the planning board Tuesday, standing before a bulletin-board photo of their lone remaining structure in a Bedford Road project in Katonah.

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An aging Katonah structure, demolished after the planning board OKd only a renovation, has offices in its future and important questions about its past.

By Tom Bartley | Email the author | 5:50am

Contractors overhauling a pair of time-worn buildings in Katonah were scrambling today to learn whether they’ve run afoul of the town’s tough historic-preservation laws.

The Helmes Group of Katonah, which is overseeing a project to turn the onetime Country Willow furniture shops into office space, acknowledges that a construction crew razed one of the aging buildings after finding its conditions unsafe. But that building, located behind the main structure at 73-77 Bedford Road, was built at roughly the turn of the last century, making it a potential candidate for protection as a historic building and leaving those who tore it down subject to stiff penalties.

“This [demolition] came as a bit of a surprise,” said planning board member Deirdre Courtney-Batson, who was sitting in for vacationing chairman Donald Coe and who presided over a three-hour meeting Tuesday evening that also dealt with these businesses.

Splash Car Wash. Preliminary approval of a site plan for the car wash was shelved, pending action by the zoning board of appeals on applications for three variances to cover parking and yard issues. Splash proposes to move from its current Bedford Hills location at 527 North Bedford Road, on the west side of Route 117, to the former Carvel site, across the street and north, at Valerio Court.

Comisac Nursery. The board renewed for another year landscaper Mike Comisac’s permit to operate his nursery at 531 Bedford Road, Bedford Hills. Approval was conditioned on the addition of decorative planting at the site, where Comisac sells and auctions trees for transplant.

Mount Kisco Medical Group. The group medical practice proposes to establish a three- to five-employee office for medical billing and other records in a 9,500-square-foot building on the former Arroway Chevrolet site in Katonah. In addition to the office, the medical practice would also establish a 40-space parking lot on the Arroway site to serve its current, parking-challenged Katonah office at 111 Bedford Road.

A short drive away, at 73-77 Bedford Road, a three-story, century-old (give or take) building still stands. Behind it, however, a foundation alone stands as a marker for the onetime site of a second three-story building. Plans had called for converting its first-floor retail space to offices and moving its third-floor, one-bedroom apartment to the second floor. The third floor, plans filed last year with the planning board showed, was to be removed, allowing the second floor apartment to enjoy vaulted ceilings.

Instead, the Helmes brothers—Steven, Kevin and Peter all addressed the board at different times Tuesday—acknowledged the building’s destruction. Peter Helmes said the renovation crew had found “structural elements were unsafe,” leading to the decision to take down the building rather than restore it, as the planning board had approved.

Bedford regards any “dwelling, commercial building or accessory building” built before 1900 and at least 200 square feet in area to be an historic building, subject to strict limits on its disposition and requirements for its preservation. The building on the Bedford Road site was described last year only as having been built “about 1900.”

Neither Town Historian John Stockbridge nor Assessor Thomas Polzella, whose office maintains tax records on buildings, could be reached for comment today.

Demolition of historic structures is explicitly forbidden by the town code. Breaches can be punished by fines of up to $250 or 15-day jail terms for each day a violation persists.

The Helmes Group, which also includes a fourth brother and their father, Bruce, represents Akonia Holdings LLC, a Connecticut investment company that bought the Bedford Road property last June for $1.46 million.

Town officials, who are known to take seriously their role as stewards of Bedford’s historical legacy, were sharply critical of the unilateral demolition decision. “We’d like to know ahead of time [when you plan to demolish a building],” Courtney-Batson told the Helmeses. She said the town historian, John Stockbridge, who also chairs the Historic Building Preservation Commission, “has been on the phone to me.”

Courtney-Batson, herself a member of the Katonah Historic District Commission, originally threatened a shutdown of further work at the renovation site, pending a determination of the buildings’ historical pedigree. “It should not take very long,” she said.

Steve Helmes bridled at the suggestion of a shutdown, calling it an unacceptable delay. Before any prolonged dispute could develop, however, board member John Sullivan proposed a compromise. “The reality is, I’ve got an eyesore sitting down there,” he said, referring to the onetime building’s foundation. Under his compromise plan, work would continue—up to three weeks, when the planning board next meets—while Helmes and the town establish whether the buildings were constructed before 1900. If they were, and the buildings are indeed historic, Sullivan said, the Historic Building Preservation Commission will determine appropriate mitigation and the Helmes Group will abide by the decision.  

The planning board closed out its long evening by formally voting on, and passing along to the town board for adoption, its proposed Dark Skies legislation governing Bedford’s use of exterior illumination.

 

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Primary Mortgage Market Survey Press Release

30-Year Fixed-Rate Mortgage Drops Amid Japan Crisis

For Immediate Release

March 17, 2011
Contact: corprel@freddiemac.com
or (703) 903-3933

McLean, VA – Freddie Mac (OTC: FMCC) today released the results of its Primary Mortgage Market Survey® (PMMS®), which shows the 30-year fixed-rate dropping to 4.76 percent while the 15-year fixed-rate hit its lowest rate at 3.97 percent since December 2010.

News Facts

• 30-year fixed-rate mortgage (FRM) averaged 4.76 percent with an average 0.7 point for the week ending March 17, 2011, down from last week when it averaged 4.88 percent. Last year at this time, the 30-year FRM averaged 4.96 percent.

• 15-year FRM this week averaged 3.97 percent with an average 0.7 point, down from last week when it averaged 4.15 percent. A year ago at this time, the 15-year FRM averaged 4.33 percent.

• 5-year Treasury-indexed hybrid adjustable-rate mortgage (ARM) averaged 3.57 percent this week, with an average 0.6 point, down from last week when it averaged 3.73 percent. A year ago, the 5-year ARM averaged 4.09 percent.

• 1-year Treasury-indexed ARM averaged 3.17 percent this week with an average 0.6 point, down from last week when it averaged 3.21 percent. At this time last year, the 1-year ARM averaged 4.12 percent.

Average commitment rates should be reported along with average fees and points to reflect the total cost of obtaining the mortgage.

Quotes

Attributed to Frank Nothaft, vice president and chief economist, Freddie Mac.

• "With the crisis in Japan, investors rushed to buy the security of U.S. Treasury bonds, which lowered its yields and other interest rates as well. This allowed fixed mortgage rates to drift lower this week.

• "In aggregate, families have been strengthening their balance sheets. In the fourth quarter of 2010, household net worth rose by $2.1 trillion, boosted by gains in the stock market. This helped lower their financial obligation ratio (debt payments relative to disposable income) to the lowest level since the first quarter of 1995."

Freddie Mac was established by Congress in 1970 to provide liquidity, stability and affordability to the nation’s residential mortgage markets. Freddie Mac supports communities across the nation by providing mortgage capital to lenders. Over the years, Freddie Mac has made home possible for one in six homebuyers and more than five million renters.

Summary of Survey Results

Fixed-Rate Mortgages
	Average Conventional 30-Year Commitment Rate	Fees & Points	Average Conventional 15-Year Commitment Rate	Fees & Points
US	4.76	0.7	3.97	0.7
Northeast	4.76	0.7	3.99	0.7
Southeast	4.74	0.9	3.98	0.9
N. Central	4.77	0.6	3.95	0.6
Southwest	4.82	0.5	4.10	0.6
West	4.72	0.8	3.92	0.8

Five/One-Year Adjustable-Rate Mortgages
	First Commitment Rate	Fees & Points	Margin
US	3.57	0.6	2.74
Northeast	3.78	0.6	2.74
Southeast	3.42	0.8	2.75
N. Central	3.58	0.4	2.71
Southwest	3.66	0.6	2.77
West	3.39	0.8	2.73

One-Year Adjustable-Rate Mortgages
	First Commitment Rate	Fees & Points	Margin
US	3.17	0.6	2.76
Northeast	3.28	0.6	2.80
Southeast	3.02	0.7	2.75
N. Central	3.35	0.3	2.72
Southwest	3.23	0.8	2.77
West	3.02	0.7	2.75

Freddie Mac defines its regions as follows:

Northeast: NY, NJ, PA, DE, MD, DC, VA, WV, ME, NH, VT, MA, RI, CT
Southeast: NC, SC, TN, KY, GA, AL, FL, MS, PR, VI
North Central: OH, IN, IL, MI, WI, MN, IA, ND, SD
Southwest: TX, LA, NM, OK, AR, MO, KS, CO, NE, WY
West: CA, AZ, NV, OR, WA, UT, ID, MT, HI, AK, GU

Freddie Mac’s Primary Mortgage Market Survey (PMMS) is for informational purposes only and Freddie Mac is not responsible for business decisions made based on the reported results of the PMMS. In general, the data presented were calculated from information collected Monday through Wednesday of the same week that the PMMS is released and may not reflect mortgage rates, fees or points currently available from any lender. Freddie Mac may change the methodology used to conduct the PMMS at any time and without notice.

Definitions

Commitment Rate is the interest rate a lender would charge to lend mortgage money to a qualified borrower exclusive of the fees and points required by the lender. This commitment rate applies only to conventional financing on conforming mortgages with loan-to-value rates of 80 percent or less.

ARM Index is the one-year Treasury

Loan to Value Ratio (LTV) is the ratio of the loan amount of a mortgage loan to the lower of the appraisal value or purchase price of the property securing the loan.

Origination Fees and Discount Points are the total charged by the lender at settlement. One point equals one percent of the loan amount.

Margin is a fixed amount added to the underlying index to establish the fully indexed rate for an ARM.

Weighted Averages for the Primary Mortgage Market Survey have been adjusted as of October 28, 2010. The new weights use the dollar volume of conventional first-lien mortgage originations within the 1-unit Freddie Mac loan limit as reported under the Home Mortgage Disclosure Act (HMDA) for 2008. The weights are listed in the table below.

Freddie Mac Region	PMMS Weights
Northeast
Southeast
North Central
Southwest
West

Primary Mortgage Market Survey Results
March 17, 2011

30-Year Fixed Rate Mortgages
	US	NE	SE	NC	SW	W
Average	4.76	4.76	4.74	4.77	4.82	4.72
Fees & Points	0.7	0.7	0.9	0.6	0.5	0.8

15-Year Fixed Rate Mortgages
	US	NE	SE	NC	SW	W
Average	3.97	3.99	3.98	3.95	4.10	3.92
Fees & Points	0.7	0.7	0.9	0.6	0.6	0.8

5/1-Year Adjustable Rate Mortgages
	US	NE	SE	NC	SW	W
Average	3.57	3.78	3.42	3.58	3.66	3.39
Fees & Points	0.6	0.6	0.8	0.4	0.6	0.8
Margin	2.74	2.74	2.75	2.71	2.77	2.73

1-Year Adjustable Rate Mortgages
	US	NE	SE	NC	SW	W
Average	3.17	3.28	3.02	3.35	3.23	3.02
Fees & Points	0.6	0.6	0.7	0.3	0.8	0.7
Margin	2.76	2.80	2.75	2.72	2.77	2.75

The National Mortgage Rate Snapshot
	One Year Ago				One Week Ago
	30-YR	15-YR	5/1-YR	1-YR ARM	30-YR	15-YR	5/1-YR	1-YR ARM
Average	4.96	4.33	4.09	4.12	4.88	4.15	3.73	3.21
Fees & Points	0.7	0.6	0.6	0.6	0.7	0.7	0.6	0.5
Margin	N/A	N/A	2.74	2.75	N/A	N/A	2.74	2.76

Young Home Buyers Will Lead Housing Market Recovery, Says NAHB

March 17, 2011 – Generation X –young families and adults ages 31 to 45 – are likely to lead the home buying recovery as it gets underway, according to real estate experts who spoke at an educational webinar produced by the National Association of Home Builders (NAHB) in partnership with Builder magazine

These potential home buyers are most likely to think it’s a good time to get off the fence – and have strong opinions about the design features their new homes will include.

At 32 percent of the population of home-buying age – generally defined as those who are at least 30 years old, the Gen X population cohort isn’t the largest, but it’s the most mobile, said presenter Mollie Carmichael, principal of John Burns Real Estate Consulting in Irvine, Calif. “They are in full force with their careers and they need to accommodate growing families,” she said.

In sharp contrast, even though they constitute 41 percent of prospective home buyers, Baby Boomers continue to wait for the market to improve, and their decisions to delay retirement also delay their decisions to downsize into a smaller home, Carmichael said.

Most of the 10,000 buyers and potential buyers in 27 metro areas that the consulting company surveyed were optimistic about a new home purchase, with between 85 percent and 89 percent saying that it was a good time to buy a home. Only 13 percent said they thought home prices would continue to fall, further evidence that it’s “not all about price,” she said. “They want something compelling, from a design or personalization standpoint,” said Carmichael.

In addition, though the average home size is shrinking, a majority of prospective buyers said they would like a bigger home than the one they have. “These are first-time buyers or younger families looking for more room to grow,” she said.

Seventy percent said that they were willing to pay $5,000 more for a green home, but those responding to the survey said that they expected new homes to already have many green technology features. They also said they would pay a premium for dark wood cabinets, a separate tub and shower and a fireplace in the living room, and more preferred a great room over formal spaces.

And while community amenities are important to Gen X buyers, 46 percent said they prefer a home in a large-lot, suburban development, versus the 21 percent looking for a traditional or “walkable” neighborhood.

Webinar panelist Heather McCune, director of marketing at Bassenian/Lagoni Architects in Newport Beach, Calif., also emphasized that design will be important in generating sales in the emerging marketplace. “The notion of ‘build it and they will come’ no longer works. Design matters,” she said.

McCune said buyers are looking for homes with a connection between indoor and outdoor spaces, even in colder climates, to create the perception of greater home size, even if the space is only usable for part of the year. They also want more storage, an open floor plan and flexibility in the garage.

“While Gen X numbers are smaller than the birth cohorts before and after them, their numbers have been enlarged by steady immigration,” said NAHB Chief Economist David Crowe. “Gen X may wait longer than their predecessors to establish their own household or buy a home because of the recent recession impacts, but the trends are still likely to occur as they have for past generations.”

This webinar was one in a four part series entitled New Horizons: Setting a Course for Success in the New Market. The series was sponsored by Simonton Windows and ThermaTru.

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