Time is of the Essence

I had to smile the other day when I was teaching a class on the new NVAR Sales Contract to be released January 1st 2012.

Among the changes I noticed was the inclusion of clause 30; “TIME IS OF THE ESSENCE AS TO ALL THE TERMS OF THIS CONTRACT”.

In my 34 plus years in Real Estate this clause has appeared and disappeared in our contract iterations several times.  Most recently it was not part of the main contract but inserted in the various Jurisdictional addenda’s.  This got me thinking about how sales associates go about explaining this clause if their client asks, or holding to it.

We spend time reviewing and commenting on contracts, with stock words or phrases that should mean a lot to us – but oftentimes little, if anything, to our clients. Some of those words or phrases are absolutely essential; others have lost their impact over time. One of the latter is the phrase: “time is of the essence,” which Black’s Law Dictionary defines as, “performance by one party at [a] time or within [a] period specified in [the] contract is essential to enable him to require performance by [the] other party.”

So can we explain this? What does it mean in plain English? Well, by including this phrase it simply means that one party to a contract is automatically entitled to terminate the contract if the other party fails to perform upon the time and conditions specified in the contract.

And that’s important, right? Ok… let’s explore the possibilities.

Most lawyers I know dislike vagueness in any contract language and “time is of the essence as to all the terms of this contract” certainly qualifies. Inclusion of the phrase provides a judge with evidence of your intentions when you entered into the contract, but in and of itself, and without further specificity, this may not be sufficiently strong enough to support a verdict in your favor, if a contract problem ever gets that far. Given all that, I would encourage you not to rely too heavily on the simple existence of this stock phrase in your contracts. Instead be sure your requirements for performance are accurate, specific and time-constrained.

In practice, since no one ever wants to spend the time, money and emotional angst trying to prove their case in court, here are three recommendations to strengthen intent and give it some enforcement:

1. Clearly state your expectations – both time and quality, for performance or delivery. Do not fall victim to vagueness, either yours or that of your client. This will not serve either party well in the end.
2. Confirm that all dates and deadlines are accurate. Do not allow for assumptions, or performance, to be qualified as “best efforts.” You want the terms plain and clear to both parties.
3. Put on your judge’s hat. If it’s vague, or unclear to you, chances are, it would be to a judge as well. Step back from your contract and try to see it through a third party’s eyes.  Consider how a judge, months or years down the line, might interpret the language which documents this contractual agreement.

Know your contract, be accurate, be precise and be clear.

- Scott Avery, President, Avery-Hess Realtors

Find your home, Plan your life: www.averyhess.com

Ashburn, VA Market Report – 12/6/11

Wow, when we last looked at Ashburn and Loudoun County in July we saw huge gains for the County and Ashburn.  Now the news is not so good.  Even though the average sales price continues to lead the County’s $391,485, sales volume has dropped 10% since October, 2010, the County has dropped 15%.

New home sales in the 20148 zip code continue to fuel the Loudoun County’s Market, however, the builders enjoying a great Summer market began building spec homes, which have not sold as quickly as they anticipated.

The uncertain National economy has had a negative effect on our local Northern Virginia market, even though our unemployment remains the lowest of any major Metropolitan areas in the Country.  Interest rates continue to remain record low levels and New Home Builders want to get that inventory off the market by the end of the year, so think positive and Buy Now!

Information obtained from statistics supplied by Metropolitan Regional Information Systems, and analysis and comment by Jim Agnew, Managing Broker, Avery Hess, Realtors, Dulles-Westfields Regional Office, Centreville, VA 20120

Springfield, VA Market Report – 12/2/11

The Springfield area has remained relatively stable with some increases in particular zip codes.

The majority of originated mortgages were conventional financing indicating homes in the higher price range were moving more quickly than the lower priced properties. This too, would indicate that there could be more first time buyers rather than move-up buyers since the lower priced homes are not selling as quickly.

Cash purchases were insignificant which might imply that investor purchases were also down.  Following are comparative statistics for year over year and month to month:

There will likely be a slow down in December as this is typically a slower month but we should begin to see continued increases with the start of the new year. The spring market actually begins in late January and early February.

Employment and moving decisions are being made in December for moves occurring during the first 2 quarters of 2012. There are compelling reasons for both buying and selling at this time. If you have been giving thought to making a real estate decision, be sure to contact a professional Realtor for guidance.

Market data and commentary by Charles J. Carroll, Managing Broker at Avery-Hess, Realtors.

Search for homes in the Springfield, and the rest of the DC Metro: www.averyhess.com

Derwood, MD 11/28/11

The unincorporated area of Derwood lies east of Rockville, southeast of Gaithersburg, southwest of Olney and northwest of greater Silver Spring.  The ZIP Code for all of Derwood is 20855.  Many neighborhoods make up Derwood and it is served by quite a few Montgomery County Public Schools.  The ICC (Route 200) runs directly through central Derwood and a number of residents were displaced and areas were affected by the construction.

The Shady Grove Metro station which opened in 1984 has helped the Derwood area to greatly expand in size also.

As you can see from the Market Statistics for the October 2011 Derwood is pulling out of this Real Estate down turn.

October 2011 Real Estate Market Statistics for 20855 Derwood, MD–

Derwood, Maryland is a quiet community in Montgomery County.  I think of it, being a Realtor, as my secret weapon.  Many locals know about Derwood – but surprisingly enough not as many as you think.  I got an inquiry from a potential client who is being transferred to this area.  They want a single-family home, 3+ bedrooms, garage, nice size yard, good schools, safe BUT most importantly walking distance or VERY CLOSE to a Metro stop.  All of this, and they can pay no more than $400,000.  Well in Montgomery County that is a very tall order.  Derwood is a charming bedroom community that fits the mold for many anxious potential home owners.

While searching on line for a home, not many of us or our clients think to type in the city of Derwood.  Who has even heard of it right?  It’s time to find out.  As a BUYERS AGENT, Derwood, MD maybe just what your client is looking for don’t miss this little known opportunity.

As a LISTING AGENT this is a bit trickier — sure you have just listed the PERFECT HOME at the PERFECT PRICE.  Yet, no one is showing it.  Marketing a home in Derwood because of its anonymity takes a bit more effort.  Just placing one of these special properties in the MRIS is not going to cut it.  MRIS is very rigid.  As Realtors we all know that entering the city in as Rockville/Derwood will not work.  I have to tell you that most of the individual websites that pull information from MRIS do allow it.  So, going to all of the individual websites and making changes to increase exposure will increase traffic.  Additional advertising MUST be done with properties in this area.   Take a little time and spending a bit of money will get the job done.  You and your clients will be smiling.

See the additional GOOD NEWS about Derwood Maryland.  I find these statistics a breath of fresh air.  What do you think?

Market data and commentary provided by Kathy Fleskes, Managing Broker, and Serena Toro of the Rockville Regional Office.

Search for homes in Derwood, and all of the DC Metro: www.averyhess.com

Stafford County, VA Market Report – 11/14/11

New listings in our market place have just dropped to a year low!  They have dropped 19.09% since this same time last year. What does this mean?

This means that we need more good inventory on the market!  Houses that are priced right, show well and are in good locations are selling!

For example, our office just listed a beautiful home for $269,900 (which was on the higher end of an acceptable list price for the property) and it went under contract in 48 hours!  The average sales price to original list price percentage has actually increased by 1.78% to 95.3%, which is most likely due to the lack of inventory.  Remember, it has a lot to do with supply and demand!

With interest rates as low as they are, Buyers are out there!  With the lack of inventory, Buyers are having to act quicker and make better offers to secure the home of their dreams!  If inventory stays as low as it is and more Buyers continue to enter the market place, you will begin to see prices stop dropping, begin to even out, and eventually with the same scenario, begin to increase!

Here are other statistics for the month of October:

STAFFORD  MARKET STATS

Closed sales were up, new pending sales were way up, detached and attached units sold increased and days on market decreased by 10%!  These are all important and exciting statistics!

And please don’t let the holidays fool you!  Our market is BUSY and interesting things are happening around here!  If you are considering selling, it is time to get off the fence and consult a professional to give you advice on your individual situation!  If you are a Buyer, take advantage of these historically low interest rates and get on out there.   Now is a great time to start looking for a new place to call home!

Commentary and market stats provided by Amy Cherry-Taylor, Business Manager, Stafford Regional Office.

Search for Home in Stafford County: www.averyhess.com

Montgomery Village, MD 11/07/11

Like much of our country the Montgomery Village Real Estate market is struggling.  The only real POSITIVE for the month of September is that the MEDIAN SOLD Price has increased.  This is a sign that change is coming.  With mortgage rates and Sale Prices at an all time low – the TIME TO BUY IS NOW!

Here are the Real Estate Statistics for Montgomery Village, Maryland for September 2011.

A number of large companies call Gaithersburg home including IBM, Lockheed Martin, MedImmune, Sodexo and the National Institutes of Standards and Technology (NIST).

The greater Montgomery Village area encompasses many small and large communities, and housing ranges from apartments, condos, luxury townhouses and moderately priced homes; large estates on several acres and compact track homes all make up the Gaithersburg community.

Montgomery Village centers around a large man-made lake and now includes a golf club, Lakeforest Mall and smaller centers for shopping and gathering with friends.  The many houses, townhomes and apartments in Montgomery Village offer a wide array of living accommodations for residents of Montgomery County.  The Montgomery Village Athletic clubs such as volleyball, wrestling, and soccer rival any in the county and have the reputation for producing star quality athletes.  Montgomery Village is a great place to call home.

Market data and commentary provided by Kathy Fleskes, Managing Broker, and Serena Toro of the Rockville Regional Office.

Search for homes in Montgomery County, and all of the DC Metro: www.averyhess.com