Thursday, October 16, 2008

Newest MLS reports discussed at Anchorage Lions Club

I was the speaker at the Anchorage Lions Club last week. What follows is the outline of the presentation, in the form of a quiz. Answers appear below. The statistics are current as of the latest report from Alaska MLS, Inc., published October 10.

1. At the present rate of sales, how long will it take to sell the 40 homes for sale that are priced over $1,000,000?
a) one year b) 18 months c) two years d) three years e) five years

2. What is the gap between the asking price of a home this year when the sellers accepted an offer, and the price they got?
a) 2.5% b) 4.5% c) 7.5% d) 9.5% e) over 12%

3. How many homes were for sale at the end of September?
a) 275 more than the prior year b) about the same as the prior year c) 275 fewer than theprior year d) More than any time in the past 15 years e) fewer than any year in the 1990 decade

4. The average price of homes sold so far this year compared with 2007 is
a) 10% lower b) 5% lower c) about the same d) higher than last year

5. The average 2008 sales price of homes in Anchorage compared with the year 2000 is
a) 25% higher b) 50% higher c) 75% higher d) double e) 150% higher

6. The number of sales of Anchorage homes through September is
a) off 5.5% b) off 9.5% c) off 15.5% d) up 5% e) about the same

7. What is true about marketing times of homes in Anchorage?
a) It’s taking longer to sell a home this year, and homes now for sale have been on the market longer than last year
b) Home this year have been selling in less time but the existing inventory is experiencing longer market times
c) It has taken longer to sell a home this year but the existing inventory has not been on the market as long as homes that were for sale last year

8. Historically, what factors have had the biggest influence on Anchorage home values?
a) Price of oil
b) Jobs and population
c) Party in power in Washington
d) Realtors and mortgage lenders
e) Interest rates

9. What caused the real estate crash in Alaska in 1985-6?
a) Price of oil
b) Completion of Project ‘80’s
c) Tax Reform Act of 1986
e) All of the above
f) Something else: ______________________________

Answers: 1(d); 2(a); 3(c) and (e); 4(c); 5(c); 6(b); 7(a); 8(b); 9(e)

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Monday, October 06, 2008

Alaska publishes new disclosure form

If you have a property on the market at present you'll need to replace the Alaska Real Estate Commission property disclosure form with the updated version published over the weekend. New listings will use the new form hereafter.

The basic form is largely unchanged. Housekeeping and modernization were needed. Examples include adding solar panels, wind generators and swimming pools to the list of items one can check to say something is wrong with them.

Perhaps the most substantive change is the requirement to disclose if you know of any murders or suicides at the property in the past three years, and whether the property contains any human remains. While not explicitly stated, it would appear that the scattered ashes of a deceased should therefore be disclosed.

The phrase "mildew or mold issues" appears as a new required disclosure. This may be hard for some to answer with confidence. Mildew and mold are very common in damp places like bathrooms, crawl spaces, attics and the backs of closets where air movement doesn't take place and cold walls can host some condensation. It takes testing by a specialist to conclusively identify what's there. Alaska's disclosure law does not require independent testing, however, so it should be enough for homeowners to simply say whether they know of mold or mildew in the home.

EPA guidelines say that mold and mildew -- they are much the same thing biologically -- require continuous moisture. The common remedy therefore is to identify the source of moisture and dry out the area. Then the dead mold can simply be wiped down with Kilz and painted over.

The new disclosure form states in the instructions that Alaska law requires amendment of the disclosure if a seller comes by new information about the property. If a buyer is under contract at that time, amending the disclosure gives the buyer the right to back out without penalty within three days. That's not new, although the language pointing this out wasn't in the instruction set of the old form.

What is new, however, is the statement that any inspection report the buyer obtains is "automatically" a new disclosure of the seller, thus triggering a three-day right to cancel at that point. The purchase and sale agreement widely used by Alaska MLS, Inc. members has long read this way. The new disclosure form in effect codifies a common practice for a great majority transactions where the the MLS form is used.

The requirement to disclose old engineer and property inspector reports has been expanded from two years to five. The new form has a yes/no question as to whether the homeowner "to best of your knowledge" is aware of reports that are as much as five years old. The old form had a check box in a section called "Documents . . . the seller has available for review" for reports "completed in the past 24 months". The time line in that checkbox has been deleted on the new form. This may enable a homeowner to truthfully answer that he or she is aware of past inspections but not have to dig around to find the report itself if it has since been lost.

There are a few other new questions. One asks about freeze-ups and the use of "heat tapes, heat lamps, or other freeze prevention devices". Another asks about water contaminents. There are more detailed questions about flooding and flood zones. The question about soil conditions has been reworded to require only disclosure of conditions "that affect the improvements of the property".

The new form was some time in the drafting, review and approval process. It contains many consumer-friendly and litigation-avoiding improvements. It also steered away from some of the objectionable things that appeared in earlier drafts, such as one question that could have been read to require disclosing if there are ghosts in the home.

For full property searches, virtual tours and many other Anchorage real estate resources, visit