‘Escrow’ has at least two meanings in real estate

‘Escrow’ has at least two meanings in real estate

Q: I used to live in California where the word “escrow” referred to the closing of a real estate sale. For example, we said, “We’re in escrow for the sale of our house.” But then I moved to Florida where the term “escrow” seems to have an entirely different meaning. Here, it refers to the mortgage lender requiring the borrower to deposit a stated amount each month into escrow for payment of the property taxes and insurance bills when they come due. Which is the correct use of the word “escrow”?

A: As you discovered, there are at least two real estate meanings for the term “escrow.” The word itself refers to putting something of value, usually money, into the care of a trusted third party.

Tarragon, in Credit Crunch, Expresses Doubts on Future

Tarragon, in Credit Crunch, Expresses Doubts on Future

Apartment and condominium builder Tarragon Corp. raised doubts about its ability to remain in business amid weak demand and an inability to raise new financing, in the latest fallout from the spreading credit crunch. It also disclosed that the wife of the company’s chief executive sold stock the day before Tarragon shares lost two-thirds of their value.

Tarragon’s shares plunged $1.88, or 67%, to 94 cents at 4 p.m. in Nasdaq Stock Market composite trading. The shares hit a 52-week high of $13.50 in February. The company — which owns 11,700 rental apartments, has 3,800 urban condos and houses under development and reported revenue of $545 million last year — said it is selling several assets to meet demands from creditors and will record a $125 million accounting charge. In a statement, the company blamed the “sudden and rapid deterioration of the real-estate credit markets” for its situation. It delayed its quarterly earnings report and postponed plans to spin off its home-building division.

Miami condo units to be auctioned [South Florida]

Miami condo units to be auctioned [South Florida]

Panoramic views of Biscayne Bay. A short distance to the Carnival Center and downtown Miami. Living in the heart of Miami’s emerging Edgewater neighborhood.

It’s all yours — for auction next month inside a Marriott Hotel ballroom.

In what may preview the straits the ailing South Florida condo market faces in the coming months, developers of the Platinum condominium are auctioning 20 condos in its 119-unit, 22-story tower. Eight will go to the highest bidder, no matter how low the sales price. The rest require the developer’s approval.

Carmen Redondo, a principal with Maysville, the property’s builder, said buyers started closing on units at Platinum, 480 NE 30th St., in May, but the remaining inventory couldn’t attract enough interest in the sluggish market. ”We decided to auction the last 20 units so we can finish this project and go to a new thing,” Redondo said.

Investors Compare Manhattan Buildings With T-Bills

Investors Compare Manhattan Buildings With T-Bills

The tightening of underwriting standards and of the availability of capital seems not to have affected sales of residential apartment buildings across the five boroughs, as some had feared.

The Katz family is the owner of two prize residential apartment houses on Park Avenue, including the 20-story, 116-unit rental building at 737 Park Ave. at the corner of East 71st Street. Last week, a joint venture of BlackRock Realty Advisors (a partner with Tishman Speyer in the purchase of Stuyvesant Town and Peter Cooper Village last year) and investor Patrick Freyberg entered into a contract to purchase the 19-story, 190,227-square-foot rental apartment building located at the corner of East 61st Street from the Katz family trust. The building is across the street from the Loews Regency Hotel. The joint venture is paying about $212.5 million for the 139-unit building, which has approximately 8,000 square feet of professional space. According to real estate sources, the joint venture plans to make substantial renovations and maintain the property as a rental building.

Last month, CDP/PSP Stonehenge Partners closed on the acquisition of a 90,000-square-foot residential rental building at 330 E. 63rd St. The 60-year-old building, on the south side of 63rd Street between First and Second avenues, has a total of 93 units. The purchaser, Stonehenge Partners (with other investors), currently owns and manages more than 2,000 rental units in Manhattan. Its partner in the purchase is Cadim, a division of the Caisse de depot et placement du Quebec, and a member of the Caisse’s real estate group.

Bonfire Of The Builders

Bonfire Of The Builders

By rushing into the mortgage business big-time, homebuilders helped fuel the housing crisis

Elizabeth and Armando Motto are living a real estate nightmare with a new breed of monster: the big homebuilder as lender. In November, 2005, the couple, who have four children, agreed to pay $540,000 for a newly built three-bedroom house in suburban Clarksburg, Md., near Washington, D.C. Rather than send them to a bank, the builder, Beazer Homes USA Inc. (BZH ), offered to provide a mortgage itself in an arrangement of the sort that helped fuel the long housing boom across the country.

But when it appeared that the Mottos might not qualify financially for the loan, things took a troubling turn. Beazer, according to the couple, inflated the pair’s earnings in loan-application documents by incorrectly stating they were collecting rental income from the house they were leaving. “I don’t want to misrepresent myself,” Elizabeth said in e-mail correspondence with Beazer’s outside mortgage service, dated July 14, 2006. But in the end, the couple signed the documents, and soon after they closed on the Clarksburg house.

Anxious home builders pile on incentives

Anxious home builders pile on incentives

With the housing market looking increasingly frail, home builders and real-estate agents are going to new extremes to attract buyers, dangling lavish incentives and slashing prices.

In Boca Raton, Fla., Gordon Homes is offering to pay two years of property taxes and insurance – worth as much as $150,000 on houses priced as high as $2.5 million – for buyers of completed homes at its upscale Azura development. In Richmond, Va., Orleans Homebuilders Inc. is offering “Sizzling Summer Sale Savings” that include as much as $100,000 off the cost of upgrades ranging from granite countertops to a conservatory. And in Medford, Ore., Diane Adams, a real-estate agent, is offering to pay four months of mortgage payments on the $975,000 house she and her home-builder husband constructed on 20 acres near Crater Lake.

“I’d also negotiate a lower price, too,” says Ms. Adams, an agent with Re/Max International Inc. “I just want this house off our books.”