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Philadelphia Real Estate Law Blog

Seller's market in Philly shows no sign of slowing

Philadelphia's housing inventory, that is, the number of properties available for sale, is notably low right now, and it means that sellers are getting multiple offers on homes even days after they go on the market. Buyers are having to offer above list price and have also been willing to make important concession in their real estate contracts, such as agreeing to be bound by a sale even if an appraisal suggests they are paying too much.

Residential real estate inventories in the Philadelphia area stand at about 3.1 months, meaning it would take that long to sell all of the houses currently on the market assuming there were no new houses going up for sale. While to a layman this may seem like a reasonable length of time, realtors like to see an inventory of between 5 and 7 months. Philadelphia's inventory indicates a housing shortage, meaning that even neighborhoods that are not particularly hot or desirable are hard for families to get in to right now.

Leasing versus owning commercial property

One of the big decisions a Philadelphia entrepreneur has to make early on in business plans is whether to purchase a building for the business or instead rely on a commercial lease to secure a location for a new business venture.

Both owning and signing commercial leases present certain unique business advantages. For example, leasing allows a business owner to take the entire rental payment as a tax write off, whereas an owner cannot deduct all expenses related to homeownership and will generally have to capitalize any depreciation on the building.

What happens when the state wants to build a road on my land?

Like other government agencies in Pennsylvania, the Pennsylvania Department of Transportation has the power to exercise eminent domain, meaning it can take the property of a Philadelphia resident and apply that property to a public purpose, such as building or improving a road.

The Department of Transportation has its own set of procedures for dealing with landowners when the Department needs to acquire land. As such, even before going to court, they are likely to approach a private landowner with an offer to purchase the land for "just compensation," as it is the constitutional right of a landowner to receive just compensation for land that is taken.

Protecting against violations of disclosure laws

A previous post here discussed Pennsylvania's Seller Disclosure Law and how that law changes the traditional doctrine of "caveat emptor," or let the buyer beware. A seller not only has to be truthful in what he or she does say about a home or other residential property, the seller also has a duty to report certain material defects.

Even for a Philadelphia resident who is basically an honest person and wants to do things the right way, knowing exactly how to fill out this form can involve complicated questions and a difficult balancing act. After all, most sellers do not want to call attention to things about a house that are not really problems, but just items that may need attention due to age or some other factor. Indeed, many buyers would not expect a seller to do so, and noting such items could raise a red flag unnecessarily and prevent a mutually beneficial sale.

Philadelphia still a great value for newcomers

Although slipping a bit from the number two spot last year, a recent report prepared by a website specializing in personal finance found Philadelphia to be one of the top ten most "undervalued" cities in the country, coming in at number eight. In the survey, an "undervalued" city is one in which a person buying a home in that city will likely get more out of their real estate investment in the city than the are likely to put in.

Generally, those who prepared the survey first averaged the price of residential real estate per square foot. They then evaluating other factors and determined how much the city's real estate was "actually" worth per square foot.

Overview of Pennsylvania's real estate disclosure law

Many residents of Philadelphia have probably heard the phrase "caveat emptor," a legal doctrine that basically means "let the buyer beware." The doctrine, which traditionally applied to almost all purchases, including purchases of a new home, means it is the buyer's responsibility to check out property before they sign an agreement and pay money for it.

In other words, a seller doesn't need to give any information about the condition of the home at all, even if the seller knows the home has serious problems. The seller's only obligation is to speak the truth if he or she chose to speak.

What is a title examination and why is it important?

An examination of a title may be something buyers and sellers have heard about doing, but it is also something they wonder about pertaining to the details of the process. A title examination is one of the most important aspects of a real estate transaction and can be essential to a successful transaction when purchasing real estate. Title examinations, in general, assure that the property being purchased is suitable for sale. The process looks for encumbrances on the property, which may not make it suitable to sell or may otherwise impact the transaction.

Encumbrances on property can include unpaid tax liens or restrictions that have been placed on the property at some point along the chain of title. The title examination process also reviews the history of ownership of the property and the deeds that have been associated with the property in the past. It will also review will and trust documents that could impact the property and its ownership. In reviewing the chain of title, the title examination assesses whether ownership of the property can be tied to anyone other than the buyer and seller associated with the present transaction that is being contemplated.

Understanding the residential real estate process

When engaged in a residential real estate project, it is important for homeowners to be familiar with their rights and how to protect them. The residential real estate process can be complex and challenging, so having trained guidance throughout it can be helpful. It is important to be familiar with construction and real estate matters ranging from contract negotiations to breach of contract and other concerns.

Issues that may arise in the context of residential real estate and construction projects include mechanic's liens, which may require removal of a mechanic's lien or a mechanic's lien may need to be filed, issues with either licensed or unlicensed contractors, disputes with contractors, construction defects, breach of contract and help working with homeowner, townhome and condo associations.

Pennsylvania project receives zoning green light to move forward

In order to proceed with a building project or development, certain and necessary approvals must be made. Zoning laws are important to understand because they can have a tremendous impact on a proposed, planned or existing real estate or commercial real estate projects. It is essential for developers and individuals engaged in real estate or commercial real estate transactions to be well versed in local zoning laws and may also need to understand how to seek a variance from zoning laws or other ways to tackle zoning concerns.

A new development in a neighboring Pennsylvania community northwest of Philadelphia has received the necessary approvals for zoning in order to proceed. With the recent zoning approvals, the developer, a leading developer and investor in mixed-use and commercial real estate properties, can proceed with the planned development. The large and multi-faceted development will be centered around a public plaza that can be used for famers' markets, outdoor movies, exercise classes and other public uses. The development will include a 250,000 square foot office building with retail and dining as well as a hotel, parking structure and other features and amenities.

Understanding the complexities of commercial real estate

Real estate opportunities in commercial properties can be full of promise; however, it can present some challenges, and sometimes a planned acquisition can be more difficult than expected. There is a lot to know when negotiating a commercial real estate transaction so it helps to be familiar with as much of the process as possible. There are a number of important considerations to take into account during the commercial real estate process.

This blog recently discussed contract disputes and breach of contract concerns. It is important for parties to a contract, which may include buyers, sellers, parties to a commercial real estate transaction and tenants, to understand how to effectively manage a contract dispute. Additionally, it is also important to be prepared to effectively negotiate, draft, review and execute a contract for sell or purchase.

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