Connecticut Real Estate Blog - Real Real Estate in CT

Like the Little Orphan Annie secret decoder pin Ralphie used in A Christmas Story, this post will unlock the mysteries of the mystifying realtor language used in real estate listing sheets in most of Connecticut. These are items I’m asked about most:

Status:

•  ACT or Active - the house is for sale and is available to view.  It is not yet under deposit but that doesn’t mean that offers have not been presented.
• SHOW or Under Deposit/Continue to Show - The house is under deposit but the contract has contingencies that haven’t been met yet.
• DEPOS or Under Deposit - The house is under deposit and is no longer available to be seen by other buyers.
• HUBRD - The house in question has a hubbard clause on it, meaning that a buyer has a contract on the property but it is subject to the sale of their own home.  If the seller receives another offer on the house, the original buyer may either release the hubbard clause and buy the house or the seller may cancel the contract and accept the offer of the second buyer.
• EXP  or Expired - The listing agreement with the brokerage has expired and has not yet been renewed.
• WITH or Withdrawn - The house has been withdrawn from the market and is probably not available for showing.  The seller may let the listing expire or may put the house back on the market.
• CANCL or Cancelled - The listing agreement was cancelled and the house is no longer “officially” on the market.
• TEMP or Temporarily off the Market - This one is funny.  An agent has taken a listing and for some reason, the agent or seller doesn’t want the house shown for a period of time - a few days, a week, etc.  Now, in a heavy sellers market, I used to see homes come on the market TEMP status and then two or three days later, go under deposit.  The house “went on the market” but not really - it was probably sold to a client the agent had already lined up or was sold “in house.”

Square Feet: 

• 2000/Town - This means the town has the square footage of the property at 2000 sf.
• 2000/Agent - The agent took the measurements, possibly because the town is inaccurate or because the seller feels that the square footage in the basement should also be included.
• 2000/Owner - The seller says its 2000 square feet and there will be no arguments.

Agent Comments:

• Cozy - small rooms.
• EIK - Eat-in-kitchen.
• As-is - the owner is making no representations about the home so “buyer beware.”  Before putting in an offer, be sure to carefully examine the home and get an inspection, although the seller may very likely not make any repairs you ask for.
• Bank owned - Known as an REO or real estate owned property, bank owned properties have been taken over by a lender for some reason such as foreclosure.  Special addenda are required with bank owned properties.
• Clean - if that’s best that can be said, then the house probably needs some other things like updates to kitchen and baths.
• Must see inside - the outside is a mess, so don’t judge a book by its cover.
• Priced to sell/motivated sellers - the seller or agent is desperate to move the house but that doesn’t always mean they’ll sell it for a bargain.
• Just reduced - this doesn’t necessarily mean the house is priced accurately.  Nor is it always 100% truthful.  I just saw a listing where the price started at $269,900 in the summer, went up to $274,900 and then was reduced again to $269,900 - Just reduced!

Dates:

• Listing Date - This is the date the listing went on the market - with this MLS number.  It’s not always the date the house originally went on the market.  Your agent should do a check in property history in the MLS as well as do an address search for all occasions the listing may have been on the market under another MLS number. 
• Days on Market - Same thing here.  The Days on Market is the number of days the listing has been on the market with a particular MLS number.

In this morning’s Hartford Courant, there is a story about a woman who lives in a condo complex in East Windsor reminding me to tell prospective condo buyers about the down side of owning a condominium - rules and regulations and condo boards. 

In honor of her son, who is serving in the military, she has a flag outside of her home.  In condo association world, that’s called breaking the rules.  “We must have uniformity!  If we have flags, the garden gnomes can’t be far behind!  After the garden gnomes, then it’s pink flamingos.  It’ll be anarchy!”

Her association has told her to take the flag down by labor day or else be fined $25/day.  She has called upon her local elected officials to intervene but has gotten the cold shoulder so far.

While this woman may be able to garner support for her cause, the average homeowner who just wants to plant some flowers may not be able to rally the troops as effectively.  Many homebuyers don’t know what they’re getting themselves into when they buy a condo - that only one cat is allowed, wreaths must be taken down two weeks after Christmas, you can’t paint your front door a different color and that only a certain number of units may be rented.

In Connecticut, buyers are protected to a certain extent.  Home buyers are given a period of time after they have a signed contract to purchase a condo to review the condo rules and regulations.  This is where modifications to the exterior will be barred.  If you read something in the rules and regulations that doesn’t fit your lifestyle, then you are not obligated to purchase the property as long as you notify the seller within a certain period of time.

It’s important to review these documents carefully as a home buyer and to have your attorney review them.  If the community has a website or newsletter, take this as an opportunity to look through these as well to get an idea of the tone of the community. 

However, once you’re living in the condo, the association is perfectly free to make revisions to the rules and regulations and you have to abide by them or hire an attorney to fight it out.  I often tell clients to get involved in the board once they’ve moved in -and at least attend regular meetings to have your say in association business. 

This is the seventh post in a series of twelve on buying a home.  Click here for the other postings in this series.

In addition to conventional mortgages, there are several programs available to home buyers which are meant to encourage homeownership.  While looking for a loan, ask your lender or real estate agent if you might be eligible. 

CHFA - This is the program that I refer more clients to than any other.  CHFA, or Connecticut Housing Finance Authority, offers a “first time home buyer” program which can be a great deal for the right person.  There are income limits (currently $81,000/year for a 1-2 person household in most of Hartford County) and sales price limits (vary greatly depending on area and number of units).  The property must be owner-occupied throughout the entire term of the loan and if the home is sold within 9 years, the profit may be subject to a recapture tax if certain conditions are met.  

There are some really great things about the CHFA program:

• Low interest rate - currently 5.375%
• More lenient credit guidelines
• “First time home buyer” only means that you cannot have had ownership in a property in the last 3 years
• You can borrow more than 100%
• Borrowers can lock in rate for 4 months
• Single family properties, condos and 2-4 unit multi-families are eligible

One word of caution: Up until last year, when I presented offers on properties for buyers who had a CHFA loan pre-approval, I would receive some flack from seller’s agents.  The reason for this is that CHFA used to have more stringent appraisal guidelines and this left many sellers and their agents uneasy.  However, CHFA has eased their appraisal guidelines and seller’s agents should not have this issue any longer.  If they do, your buyer’s agent should be willing to ease their concerns.

FHA -The Federal Housing Authority insures loans for first time home buyers that lenders may not otherwise offer.  Similar to CHFA in that FHA loans have certain borrower guidelines, FHA has sales price limits as well as credit requirements.  FHA allows borrowers to put as little as 3% down and allows you to include many closing costs in the loan. 

VA - Available through many lenders, VA loans are guaranteed by the federal government to give military personnel more access to homeownership.  Eligible borrowers include active and inactive members of the armed forces who meet a certain criteria for length and time of service.  Reserve forces may also qualify, depending on length of service, as may those who were discharged and widows/widowers provided spouse’s death was service related.  The biggest negative to VA loans is a lending fee which varies depending on the borrower’s eligibility.  However, the lending fee may also be financed.

If you qualify, there are many positives about getting a VA loan:

• No Private Mortgage Insurance

• No money down required

• 100% financing plus closing costs, which are limited

• Rates comparable to conventional loans

Here are some other programs available:

Good Neighbor Next Door - for teachers, law enforcement, firefighters or emergency technicians.

Home of Your Own - for home buyers with disabilities.

Military Homeownership Program - a CHFA program for military personnel.

Police Homeownership Program - CHFA

Last night, I met with some prospective new buyer clients and they had the same question every buyer has - is now a good time to buy a home? Disregarding the National Association of Realtor’s propaganda campaign, the answer to this is a resounding yes for buyers in CT.  In the interest of full disclosure, I’m a buyer’s agent so I guess I’m also guilty of propaganda in this case…Anyway, here’s why I think it’s good to be a buyer in CT right now.

-High inventory.  More houses=more selection=more competition for buyers=more buyer concessions and price reductions.

-Great interest rates.  I just had a client close on a CHFA mortgage at 5.25% and one point.  The day after she locked in her rate, it went up to a whopping 5.375%.  Conventional mortgages are low, too - but CHFA just can’t be beat if you qualify.

-Modest appreciation.  You won’t be able to buy a house and sell it next year for a huge profit but you can expect modest appreciation of around 2%.  Now is a good time to stay in your house for at least five years.

-Right time, right place.  Houses that have been languishing on the market since summer are great opportunities for buyers.  Sellers may have rejected a low offer in the summer but may be willing to take that offer after no takers for months.  But, you have to be vigilant and keep your eye out for houses that are just sitting.