The number of buyers who signed contracts to purchase homes dropped in June, as the weak U.S. economy and tight lending standards kept consumers away from the housing market.

The National Association of Realtors said Tuesday that its seasonally adjusted index of sales agreements for previously occupied homes dipped 2.6 percent to a reading of 75.7.

That was the lowest on records dating back to 2001 and down nearly 19 percent from the same month a year earlier. The index has fallen by more than 40 percent from its peak in April 2005.

May’s reading was revised slightly downward to 77.7. Economists surveyed by Thomson Reuters had expected the index would rise to 78.1.

The index provides an early measure of sales activity because there is usually a one- to two-month lag between a sales contract and a completed deal.

The sales report was driven by a more than 12 percent drop in the Northeast and a 9.5 percent decline in the Midwest. Sales were down only 0.2 percent in the West and rose by nearly 4 percent in the South.

High unemployment, weak job growth and tight credit have hurt the housing market. Sales picked up in the spring when the government was offering tax credits of up to $8,000. However, once the tax credits expired on April 30, sales plunged.

Though mortgage rates have been at or near the lowest level in decades, the economy remains weak. Plus, many buyers have been scared away by the prospect that home prices could start to turn downward again.

Many analysts believe the number of homes for sale or headed for foreclosure is so high that prices will slip this fall and hit the bottom by early next year.

Because housing is such an important engine of the economy, lower prices could dim the recovery. When home values fall and people have less equity in their homes, they tend to cut back on spending.

Beware of foreclosure rescue scams! Solutions that sound too simple or too good to be true usually are. If you’re selling your home without professional guidance, beware of buyers who try to rush you through the process. Unfortunately, there are people who may try to take advantage of your financial difficulty.

Common Scams

• Equity skimming:
  This type of scam involves a “buyer” approaching you and offering to pay off your mortgage or give you a sum of money when the property is sold. The “buyer” may suggest that you move out quickly and deed the property to him or her. The “buyer” then collects rent for a time, doesn’t make any mortgage payments, and allows the lender to foreclose. Remember that signing over your deed to someone else doesn’t necessarily relieve you of your obligation on your loan.
• Phony Counseling Agencies
  Some groups calling themselves “counseling agencies” may approach you and offer to perform certain services for a fee. These could well be services you could do for yourself, for free, such as negotiating a new payment plan with your lender, or pursuing a preforeclosure sale. If you have any doubt about paying for such services, call a HUD-approved housing counseling agency. Do this BEFORE you pay anyone or sign anything.

Precautions You Can Take To Avoid Being Scammed

Here are several precautions that should help you avoid being “taken” by a scam artist:

• Don’t sign any papers you don’t fully understand.
• Make sure you get all the “promises” in writing.
• Signing over the deed to someone else doesn’t necessarily relieve you of your loan obligation. If your name is still included on the documents, you’re still liable for repaying the loan.
• Check with your lawyer or your mortgage company before entering into any deal involving your home.
• Check to see if there are any complaints against the prospective buyer if you’re selling your house. In addition to contacting DFI, you can contact the Washington State’s Attorney General’s Office or the Real Estate Commission for this type of information.

We would like to welcome our newest real estate commissioner, Kyoko Matsumoto Wright. Governor Christine Gregoire has selected the Seattle real estate agent to serve on the Washington Real Estate Commission as of October 12, 2009. Her term will expire on August 14, 2015.

Kyoko Wright has been a licensed real estate agent since 1977 and a realtor with Coldwell Banker Bain since 1983. She is a past president of the Snohomish County Camano Association of Realtors (2000) and was named Realtor of the Year in 2002. Kyoko is presently on the Mountlake Terrace city council, a board member on the Washington Realtors, and a commissioner with the Snohomish County Housing Authority. She is also a board member of the University of Washington School of Drama and the ACT Theatre in Seattle.

Kyoko likes to keep busy. She is a mother of a hip hop break dancer who made it to Las Vegas on So You Think You Can Dance television program. To many people, Kyoko is known as Yoshi’s mom since he has made a name for himself.

A salesperson license will continue to be in effect, but will be considered a broker license.

An associate broker, branch manager, or designated broker license will continue to be in effect, but will be considered a managing broker license.

All licensees will be required to take a transition course which will be approved for continuing education. The requirements for course length and content will be determined by the Real Estate Commission and the Department of Licensing.

Licensees will be issued a new license after they complete the transition course and when they renew their licenses the first time after the law takes effect.

The education required for getting or renewing a license will change.

The designated broker will be allowed to be licensed to mulitple firms as the designated broker only.

Firms will have the option to use one or more assumed names in the conduct and operation of their real estate business.

The definition of “business opportunity” will have been clarified so a real estate license will be required only if the business opportuntiy includes an interest in real property.