February 17th, 2011 at 10:28 pm
As you know, electronic signatures are becoming more and more common in real estate transactions.? While there are many good things about this new practice (ease of obtaining signatures, reduction of storage costs), there are concerns that we should all be aware of.? Below is a link to an article written by Bob Hunt in Realty Times addressing some of these issues, both good and bad.? Pay close attention to the concerns he identifies at the end of the article.? I think Mr. Hunt is especially correct to identify the diminishing “face time” agents have with their clients as a result of getting electronic signatures.? As most of you know, I strongly believe that managing your client is a big part of your job. That “managing” consists of, in large part, educating the client about the transaction and making sure they understand the documents they are signing.? If you are getting electronic signatures, and therefore not seeing the client, are you explaining the documents as completely as you should be?? Obviously, using electronic signatures and doing a good job explaining documents are not mutually exclusive.? However, it does become harder and you should remember that the explanation and advice given to your client is part of your duties and must be accomplished someway, no matter how documents are signed.? As always, let us know if you have any questions.? Thanks.
February 17th, 2011 at 10:27 pm
With the market the way it is, short sales and foreclosures have become part of every day business.? ? Agents are often asked by their clients about the foreclosure process and while agents should always refer their clients to seek the advice of an attorney, you might want to know the basic time line in a non judicial foreclosure which is a trustee sale with no filing with the Court.
? After a default occurs, a? notice of default? is recorded in the county in which the property is located. This does not necessarily occur after one or more payments are not met but for logistical reasons may occur after a loan is in substantial default — sometimes six months or more past due. The foreclosure process does not move forward for a minimum of 60 days following the filing of the notice of default. This is known as the redemption period.
? A notice of sale containing the name and address of trustee, certain disclosures (including that the property is about to be lost to foreclosure sale), the name of the? beneficiary, and other information must be recorded in the county in which the property is located at least 14 days before any foreclosure sale. This is known as the publication period.
? The borrower must receive a twenty (20) day notice before any foreclosure sale. Additionally, the notice of the foreclosure must: (a) mailed to the defaulting borrower (and other creditors whose liens affect the property) and; (b) be posted at the property being foreclosed upon and in a public place in the county where any sale would occur. The defaulting borrower may prevent the foreclosure sale by paying all arrearages up to five (5) days before the sale. The trustee’s foreclosure sale then occurs no earlier than? twenty one (21) days after the first publication.
? Foreclosure sales must take place on a business day between the hours of 9AM and 5PM and must occur at the location referenced on the? notice of sale. The trustee will? auction the property to the highest bidder, including the lender. The borrower is permitted to postpone the sale for one (1) day.
? Following the sale, the property is transferred to winning bidder. By default this will be the lender if no bid higher than the lender’s opening bid is received.
February 12th, 2011 at 10:25 pm
As you know, the CAR Purchase Agreement provides that, within 7 days of contract acceptance, the buyer must provide the seller with verification that they have the funds necessary to close the transaction.? From the broker’s perspective, the question is how do we want to handle this part of the transaction, either from the buyer’s or seller’s side.? In some instances, we will need to collect and forward those documents to our sellers and then properly prepare them for our file.? In others, we will need to confirm and document that our seller has received those documents, then provide that confirmation to our file.? Most importantly, when we represent the seller, we must make sure they get the verification documents in every instance.? Ignoring that clause of the contract is unacceptable.? With that in mind, let’s talk specifics.
First, understand that we would prefer not to have the verification documents in our file.? Those documents contain a lot of confidential information that have the potential for causing identity theft issues.? Obviously, if we do not have the confidential information, we cannot be responsible for it being stolen.? As a result, in a deal where escrow has been opened before the verification documents are provided, we should instruct the buyer’s agent to gather the documents, redact (black out or white out ) account and social security numbers and then forward them to escrow.? Escrow can then send the documents to the seller.? In this case, we don’t receive the documents at all and the buyer is not contacting the seller directly.? As the listing agent in this scenario, we should confirm with or seller that they received the documents and send an e-mail to them documenting that confirmation.? Ask the seller to respond, agreeing with our confirmation, and print out the e-mail and response for our file.? This confirmation will establish that we did our job and ensured that the seller got the information they are entitled to.
Next, there are instances where, despite our wishes, the agent will have no choice but to receive verification documents.? For example, if the property is very popular, the seller may want those documents before they decide which buyer to choose.? Or, the REO lender may require that the listing agent provide these documents.? In that case it is fine to take the documents, but we must handle them properly.? Remember that once those documents are received, the DRE requires that we keep them in our file for 3 years.? So, in this instance we should also make sure that social security and account numbers are redacted before the documents are given to our sellers.? We should also be sure that they are not on the documents we keep in our file.
So, try not to take confidential information if possible.? But if you must receive that information, handle it carefully and properly.? Being careful will help ensure that identity theft is not a problem for our Company.? Thanks and as always, feel free to contact us if you have any questions.
February 9th, 2011 at 10:25 pm
I attended the Monarch Beach office meeting today and heard an interesting story about one of their deals.? In the RPA, the parties attached the WPA and provided that the seller would pay for section 1 work while the buyer would be responsible for section 2.? When the buyer’s lender asked for and received a copy of the termite report, they required that the buyer complete the section 2 work before close of escrow.? That was the first time I had heard of such a requirement, but was told that it is becoming more common.? As a result, be aware of this issue as we go forward since bank requirements seem to be getting universally more stringent.
February 3rd, 2011 at 10:19 pm
As you know, it has long been common wisdom in our industry that a real estate agent must provide three vendor names when a client asks for a recommendation. For example, if my client wants me to suggest a property inspector, the feeling is that I should give three names so I am not held responsible if the recommended inspector misses a problem with the house. And, while that practice is a good one in many ways, I want to be clear that there is no law requiring it. In truth, you are required to make responsible, reasonable recommendations, no matter the number you make. For example, if you gave the names of three inspectors, but you knew from experience that one of the three did a bad job, that recommendation would be negligent. So it is not really the number that is key, but rather the recommendation itself and the experience it is based upon. As a result, when you have good experience with our affiliates, it is fine to recommend that affiliate alone, without giving other names. We know that our affiliates provide good service and are financially sound. We know they are responsive to you and your clients and we know they are experts in their fields, both with regard to their specific industry and the law applicable to it. So, don’t make your life overly difficult with artificial rules. Don’t worry about numbers. Just recommend competent vendors, who do good work and who you have had good experience with.
Not surprisingly, this issues arises not just in California, but across the country. As a result, below is an e-mail written by Dana Strandmo, General Counsel of HomeServices, about this very subject. Dana sent this e-mail to HomeServices companies across the country. As always, let us know if you have any questions.
Three Referrals – An Urban Legend
Nobody knows where these things get their start. Somewhere, someone recommended or suggested or inferred that real estate agents should give their sellers and buyers at least three business cards for any recommended service to fulfill their fiduciary duty–a belief that has been perpetually perpetuated ever since. There is no legal basis for this three referral minimum.
Making referrals can involve complicated legal questions of agency, fiduciary duty, imputed negligence and vicarious liability in the event of a claim. There is no “three business cards defense” to potential claims under any of these doctrines.
Better advice would be, “Don’t exaggerate, fabricate or prognosticate.”
A good recommendation for a mortgage company is one that says, “HomeServices Lending has competitive mortgage rates and I have had good experience recommending loan officer Todd Johnson to my clients in the past.”
A bad recommendation for a mortgage company is one that says, “AnyMortgage Company has the lowest rates available anywhere and loan officer Dewey Cheetam will get you a rock bottom rate.”
Client recommendations should be made on sound business principles, not urban legends
