Real Estate Investing

PUDs are one of those weird real estate terms that most people pay no attention to.  But on one of the latest disclosure forms that the state requires to be signed in a real estate transaction, to inform whether a home is located in a PUD is now mandatory.

So what is a PUD, exactly?  According to Wikipedia,

PUDs tend to incorporate single-family residential uses within close proximity to two-family units and multiple-family dwellings to form a larger diversified neighborhood concept. Schools, churches, retirement homes, hospitals, and recreation facilities begin to find their way into residential districts. Residential districts also tend to use the best land in the community and the most favorable sites are protected from commercial and industrial uses.

These Planned Unit Developments are designed to enhance compatible land uses so that housing, recreation, and retail are located within one development.  Sometimes industrial parks are also in the same area.  When I lived in Lexington, Ky. the local government okayed a PUD named Beaumont Center.  Previously a field of waving grass, we heard that up to 20,000 people would live there - a community within a community.  We started to see apartments, then a liquor store and party barn, restaurants, and finally homes began appearing.  Today it is a thriving community with hotels, shopping, a city library, and affordable homes.  I would live there in a heart-beat!

So why would you have to disclose if a home is located in a PUD?  Because the buyer should be informed in advance if there are any restrictive covenants, homeowner bylaws, and master deeds that can impact how they live.  For example, can they have a storage building?  What if they want to have a yard sale?  By disclosing the rules and regulations within the PUD, a buyer comes in with their eyes wide open and this is how it should be on behalf of the buyer and to avoid liability as a Realtor.

So what the PUD. Find out if you’re buying in a PUD!

At the age of 71, Bernard Madoff will be 221 years old by the time he leaves prison.  We don’t expect he’ll be around that long, but the 150 year sentence is little consolation for the people who lost EVERYTHING because of Madoff’s criminal PONZI scheme in which he stole billions of dollars from people under the guise of investing.  Our own Miranda Marquit talks about the lesson that should be learned over at Loan Shak,

The bottom line is that there are plenty of other crooks out there in the financial world. While they may not be instigating Ponzi schemes, they are — quite likely — involved in other sneaky and underhanded practices. But most financial sector workers and companies have emerged largely unscathed. 

The Wall Street Journal reports on what Madoff said during the sentencing hearing,

“I cannot offer you an excuse for my behavior,” Mr. Madoff said. “How do you excuse betraying thousands of investors who entrusted me with their life savings? How do you excuse deceiving 200 employees who spent most of their working life with me? How do you excuse lying to a brother and two sons who spent their entire lives helping to build a successful business? How do you excuse lying to a wife who stood by you for 50 years?”

Mr. Madoff said he made “a terrible mistake” and an “error of judgment” and that he lives in a “tormented state” now. He also denied that he and his wife have been silent and not sympathetic to victims of the fraud.

The memory of Bernie Madoff will fade to most of the world, but not without years of regret by him, his family, and his victims.

Cartoon from Save our Bankers.

Short sales make my skin crawl.  Not because of the question of commissions which is the subject of this post, but because lenders are generally bitter, angry, and unmovable when it comes to making a common sense decision.  I grow weary of the six month wait to see if a short-sale is going to go through or not.  I grow weary of the flippant, arrogant attitude that is conveyed by banks.  We know you have it hard, but dang it… so does everyone else right now.  We’re in this together so just try to make the best of it.

Meanwhile, back at the Bat Cave it appears that lenders were trying to dictate the commission that it would pay through short sales.  Fannie Mae, however, took a step back and said, “Whoa mule. Slow down here.”  Here’s the official Fannie Mae stand on commissions when a short sale is involved:

In discussions between NAR and Fannie Mae, Fannie Mae has reconfirmed its short sale commission policy and established a process for REALTORS to follow if issues arise.  On February 24, 2009, Fannie Mae sent Announcement 09-03 to its servicers instructing them not to negotiate commissions on short sales below the amount negotiated by the listing agent, unless the commission exceeds 6 percent.  The Announcement reminded servicers that third party approvals (i.e., private mortgage insurers) may be required and can affect commissions.  In response to concerns raised by NAR that some servicers of Fannie Mae loans are unaware of this policy or believe it is not binding, Fannie Mae has established a process for NAR members when short sale commission issues arise.

The steps include determining whether the loan is owned or guaranteed by Fannie Mae, which you can do here.  Or you can call 1-800-7FANNIE.  After this, if the lender is in contention with the policy give them a copy.  Finally, if the dispute isn’t resolved, contact Fannie Mae at the number above with the property address, owner name, and Fannie Mae loan number - or email them at resource_center@FannieMae.com.

May the force be with you.