Broker Newsletter
December 15, 2009
In This Issue
· Obama’s Standardized Short Sale Plan
· Meth Lab Disclosure Rules
· Getting the Most from Your Website
Revelation Links
Training Calendar
Current RE Issues
IRS Tax Credit Information
Information on the in’s and out’s of the tax credit for first-time homebuyers.
HUD Homes
A list of HUD homes available for purchase by city.
Meth Lab List
State list of unremediated meth labs
Broker Blog
See Past Broker Newsletters and Discussion of Real Estate Issues
Contact Us
480.722.9800 Office
480.802.1599 Broker Hotline
http://www.mywestusa.com
brokerreview@westusa.com
Obama’s Standardized Short Sale Plan
On December 1st, the US Treasury Department outlined a standardized short sale plan that is been nicknamed “Obama’s Short Sale Plan”. The plan is an attempt to streamline the traditionally time consuming and difficult short sale process by requiring lenders and other involved parties to used uniform documents, timelines, and by providing financial incentives. It should theoretically make it easier for a seller to sell their properties, hence making our jobs easier as well.
This is part of the Obama administration’s $75 billion foreclosure prevention plan that announced in May that it would include short sales but didn’t release the details until this month. The program’s official name is the Home Affordable Foreclosure Alternatives Program (HAFA) as a piece of the existing Home Affordable Modification Program (HAMP). The program actually applies only to loans not guaranteed by Fannie Mae or Freddie Mac which cover over half of all mortgages. Fannie and Freddie will be issuing their own versions of the guidelines in the next few weeks.
The new federal guidelines apply only to banks and lenders which are subject to federal banking oversight such as the biggies like Bank of America, Chase, Wells Fargo, but not necessarily smaller local and state chartered banks.
Under the new rules, mortgage servicers have 10 days to approve or disapprove a request for a short sale. Additionally, lenders are required to fully release the borrower from the debt upon completion of the transaction.
Homeowners who successfully complete the short sale under the program receive $1500 at the close of escrow to assist with moving costs.
1. Primary mortgage servicers or first lien holders can receive $1000 for each closed short sale.
2. Investors, such as PMI companies, receive $1000.
3. Secondary lien holders receive $3000.
4. Real estate agents will receive “standard”, agreed upon commissions. The rules prohibit banks from forcing agents to cut their commissions as a part of the final approval process.
The program does not take effect until April 5th, 2010 but servicers may implement it early if they meet certain requirements.
Meth Lab Disclosure Rules
We have the responsibility of disclosing to both buyers and tenants any unremediated meth labs or other dangerous drug labs.
The Board of Technical Registration maintains a list of all such properties, and you can access it via the link in the left margin of this newsletter. The list includes all seized drug laboratory sites that meet the state’s definition of “clandestine drug laboratory”. Once a site is remediated and properly inspected and certified, it is removed from the list.
A property that has concealed a dangerous drug lab can be a toxic menace to occupants. The property owner is required to clean up the property, and until it has been properly remediated, the property owner must disclose to buyers and tenants that the property has been used as a drug lab.
How much time is the owner given to have the property remediated? The owner shall remediate the property within 12 months after receiving notice. Clean up must be performed by a remediation firm approved by the Arizona Board of Technical Registration (BTR).
What happens if the owner does not remediate the home? If the owner fails to have the home remediated within the 12 months, BTR will alert the city or county manager, and the city or county may step in and remediate the home and pass the cost along to the homeowner.
Can you sell an unremediated property? Yes. The owner can sell the unremediated property as long as the seller notifies the buyer within five days after the contract is signed. The buyer must acknowledge receipt of the notice and may cancel the contract within five days of receiving the notice and receive their earnest money back. If the owner fails to provide the notice, the owner is subject to a civil penalty of $1000 and is liable for any harm resulting from the owner’s failure to comply with the requirements.
Once the property has been properly remediated, does the seller have to disclose to the buyer that the property was the site of a drug lab? No. Under the specific statute, the seller is only obligated to make the disclosure for the unremediated property. However, in regards to general seller disclosures, please counsel your sellers to include information about the remediation with the Seller Property Disclosure Statement (SPDS). When in doubt, disclose.
Not all dangerous drug labs are discovered by police. Are there any signs a buyer can look for that might suggest the past presence of a drug lab? There is no easy way to identify a property that once housed a drug lab, but here are five warning signs to watch for:
1. Yellow discoloration on the walls, drains, sinks and showers
2. Blue discoloration on valves of propane tanks and fire extinguishers
3. Fire detectors that are removed or taped off
4. Burning in your eyes, itchy throat, a metallic taste in your mouth, or breathing problems when in the home.
5. Strong odors that smell like materials found in a garage such as solvent and paint thinner or odors or cat urine or ammonia
** excerpt from AAR articles
Getting the Most from Your Website
As NAR statistics indicate, an increasing number of buyers begin their home search on the internet. Make sure that you are using a website to market yourself and mine leads effectively. Here are some specific tips for using your website to increase your business.
1. It’s Not About You… Buyers and sellers are looking for information on available properties, tips on moving, etc. Consider the concerns each have and address them with your website.
2. Call to Action! Have clearly visible sections that encourage your clients to take action now.
3. Specific Property Searches. Increase the amount of time buyers spend on your website looking at properties by setting up specific, targeted searches for specific neighborhoods, price points, property types, etc.
4. Cultivate the leads. There is no such thing as a bad lead. Internet leads may have as long as a six month incubation period. Have a disciplined system for following up with your leads until they buy.
5. Is your website ready for Search Engine Optimization (SEO)? Use metatags and specific descriptions for your pages to increase the chances of buyers and sellers finding your website.
6. Consistency. Use a similar look and feel for your website, emails, flyers, postcards, and other marketing materials to build your brand recognition with your clients.
7. Add social media to your website. Consider using Twitter, Facebook, LinkedIn, and blogging to integrate other online media with your website and drive repeat traffic to your website.
8. Work in Progress. Your website is never done. It will always require tweaking, changing, and updating as you change and the market changes.
Please join us for a training class on Developing Your Personal Website on Friday, January 8th, after the office meeting at 12:30pm in the training room with Brian Ford from Superlative.
Wednesday, December 16, 2009
November Broker Newsletter
Broker Newsletter
November 30, 2009
In This Issue
· What is a Variable Commission?
· Tax Credit Renewed and Revised
· New Free Fax to Email Tool: MongoFAX
· New HUD1
· Docusign for Electronic Signatures
Revelation Links
Training Calendar
Current RE Issues
IRS Tax Credit Information
Information on the in’s and out’s of the tax credit for first-time homebuyers.
HUD Homes
A list of HUD homes available for purchase by city.
MongoFAX
Free tool to AAR members. Fax to email conversion.
Broker Blog
See Past Broker Newsletters and Discussion of Real Estate Issues
Contact Us
480.722.9800 Office
480.802.1599 Broker Hotline
http://www.mywestusa.com
brokerreview@westusa.com
What is a Variable Commission?
Everyone has heard of a Variable Commission, and most are familiar with the line on the MLS printout, directly after the offered commission amount, “Var: Y/N”. However, I’ve recently noticed that many agents are not familiar with the exact meaning and usage of a Variable Commission. It is important that you understand what a variable commission is, when to use it, and what you need to be disclosing to each party when there is a variable commission in place on a listing.
1. What is a variable rate commission?
The most common variable rate commission is where one amount of commission is payable if the listing broker’s firm or the listing agent specifically is the procuring cause of the sale, and a different amount of commission is payable if the sale is a result of another broker procuring a buyer.
2. What isn’t a variable rate commission?
There is a misconception that any compensation offered through the MLS to cooperating brokers that differs from a fifty-fifty split is a variable rate commission. NOT TRUE. Listing brokers may offer whatever compensation they wish to in the MLS as long as it is stated in either a percentage of sales price or a dollar amount. There is no rule nor can there even be a rule that compensation offered in the MLS is based on any particular split or percentage per Antitrust laws.
Another misconceptions is that a variable commission is when the listing agent wants to “reserve the right” to negotiate the total commission with the seller at the time of presenting an offer.
Acting on Inappropriate Lender Requests for Seller Contributions --Lenders may go after money that sellers have in the bank or retirement accounts as a settlement to approve the short sale. The lender may communicate the demand to the realtor to get the seller to sign a note as a condition of the sale. If the loan qualifies under the state anti-deficiency statutes, the lender has no claim to this money, and agents that suggest otherwise may be at risk for negligence claims. If a lender demands money or a note, allow them to communicate it to the client directly.
3. Why is it necessary to disclose variable rate commissions?
The requirement for listing agents to disclose variable rate commissions is to allow cooperating agents and their buyers to make informed decisions in determining offer amounts for properties. For example, if there was a variable rate commission on Broker A’s listing and Broker B’s buyer is interested in making an offer on said listing, Broker B’s buyer is ethically entitled to know that if Broker A also represents a buyer with an offer on the subject property, two identically written offers will each net the seller different amounts, and therefore, Broker A’s buyer’s offer may actually have an advantage by netting the seller more due to the variable commission.
4. Aren’t listing brokers allowed to charge whatever they want? And isn’t it between the listing broker and the seller?
Absolutely! But when the terms of the commission affect the cooperation by other brokers and a difference in competitive advantage between buyers, it becomes necessary to disclose.
5. Does the listing broker have to disclose the full terms of the commission negotiated with the seller?
No. If there is a variable rate commission disclosed, potential cooperating brokers may call the listing agent to determine what the differential is between the commission paid to a cooperating broker, and the listing agent must disclose the differential as a percent between the two scenarios, but the listing agent does not need to disclose the total commission negotiated.
6. If you’re a buyer’s agent, and you are aware of a variable rate commission agreement on a property your buyers are interested in, should you disclose it to the buyers?
Yes. You MUST disclose it before the buyer makes an offer.
** excerpt from AAR article by Alice Martin
Tax Credit Renewed and Revised
The IRS Homebuyer Tax Credit bill has been extended and expanded.
Please see the attachment which covers a comparison of the former and new features of the bill.
For first-time buyers, the credit is similar… for principal residences, must not have owned a principal residence for 3 years prior.
For current home owners, the credit is $6500, effective from the date of enactment, when the home being sold was the principal residence for 5 consecutive of the last 8 years.
The income limits for both first-time and move-up buyers is $125k for single or $225k for married. The maximum limit of the purchase price for the home is $800,000.
Please note that the extension is good for contracts written through April 30, 2010 and closed no later than July 1st, 2010, which is really not much time. Take advantage of the extension and get your first time and move-up buyers out there! Again, the greatest motivator for all people is... the fear of loss. Make sure that your buyer contacts know that they must act quickly to take advantage of the $8000 or $6500 tax credit.
New Free Fax-to-Email Tool: MongoFAX
If you end up with hardcopy paperwork that you need to email to someone, you can always come into the office, scan your paperwork, and email it from the computer across from it, but if you are away from the office and in need of a way to email a document that you only have in hardcopy, there is a new free service available to you for just the occasion! MongoFAX allows agents to fax paper-based documents directly to any email address. You don’t need to register, and you don’t need a login or password. All you need is a fax machine, paper documents, and the MongoFAX cover sheet. You just fax your hardcopy paperwork with the completed MongoFAX coversheet on top to the toll-free number on the MongoFAX coversheet, and your paperwork will be emailed to the designated email addresses.
New GFE/HUD1 Effective January 1, 2010
As a result of ongoing RESPA reform, HUD has revised the Good Faith Estimate and HUD1. The object of the revision is to simplify and clarify the documents for buyers and sellers. Of course, in simplifying each document, the GFE has increased from one to three pages, and the HUD1 has increased from two to three pages. It is important that you take some time to learn about the changes so that you will be able to explain the forms to your clients.
When you receive notice that your buyer’s appraisal is less than the agreed upon purchase price, have the discussion with your buyer about their options:
Good Faith Estimate:
1. The lender must provide a GFE to the borrower within 3 business days of the loan application.
2. The lender cannot verify the borrower information prior to issuing the GFE.
3. The quote must be good for 10 days unless circumstances change.
4. The lender cannot charge for the GFE preparation.
5. Mortgage must disclose Yield Spread Premiums which represent fees paid to the broker on the loan.
6. Lender is bound to the GFE.
HUD-1 Settlement Statement:
1. HUD-1 some fees that are currently shown broken out will become bundled such as title insurance, settlement costs, title exam fees, commitment fees, etc.
2. Escrow officers will not be able to complete the third page of the HUD-1 without the lenders settlement statement. Page 3 will disclose whether the lender has exceeded the allowable tolerances between the GFE and actual costs.
3. Specifics with regards to the buyer’s loan will be disclosed clearly on page 3 such as whether or not there is a prepayment penalty and what it is, the initial monthly payment, whether or not the interest rate might adjust, and whether or not there will be a balloon payment due.
Juliet Lewis from First American Title will be in the office on Monday, December 21st at 1pm to present the changes to the HUD-1 and what you need to know about the changes to represent your clients.
Docusign for Electronic Signatures:
One of the most convenient tools available to realtors in today’s market is Docusign, the electronic signature software, which allows you to move forward with paperless documentation and provide cutting edge service. If you are looking to increase your dollar per hour wage earned, consider adding Docusign to your tool belt.
Contact Nicole to sign up. The cost is $15 per month added to your office bill. There is no contract to sign. The service is the advanced version with unlimited envelopes and the ability to add text boxes. Additionally, Angela has created templates for most of the common AAR and office forms so that when you upload a contract into Docusign for your clients’ signatures, the template automatically applies the signature and initial flags to the appropriate lines.
Angela will be conducting an information session and training class on Docusign on Friday, December 4th at 12:30pm following our office meeting.
November 30, 2009
In This Issue
· What is a Variable Commission?
· Tax Credit Renewed and Revised
· New Free Fax to Email Tool: MongoFAX
· New HUD1
· Docusign for Electronic Signatures
Revelation Links
Training Calendar
Current RE Issues
IRS Tax Credit Information
Information on the in’s and out’s of the tax credit for first-time homebuyers.
HUD Homes
A list of HUD homes available for purchase by city.
MongoFAX
Free tool to AAR members. Fax to email conversion.
Broker Blog
See Past Broker Newsletters and Discussion of Real Estate Issues
Contact Us
480.722.9800 Office
480.802.1599 Broker Hotline
http://www.mywestusa.com
brokerreview@westusa.com
What is a Variable Commission?
Everyone has heard of a Variable Commission, and most are familiar with the line on the MLS printout, directly after the offered commission amount, “Var: Y/N”. However, I’ve recently noticed that many agents are not familiar with the exact meaning and usage of a Variable Commission. It is important that you understand what a variable commission is, when to use it, and what you need to be disclosing to each party when there is a variable commission in place on a listing.
1. What is a variable rate commission?
The most common variable rate commission is where one amount of commission is payable if the listing broker’s firm or the listing agent specifically is the procuring cause of the sale, and a different amount of commission is payable if the sale is a result of another broker procuring a buyer.
2. What isn’t a variable rate commission?
There is a misconception that any compensation offered through the MLS to cooperating brokers that differs from a fifty-fifty split is a variable rate commission. NOT TRUE. Listing brokers may offer whatever compensation they wish to in the MLS as long as it is stated in either a percentage of sales price or a dollar amount. There is no rule nor can there even be a rule that compensation offered in the MLS is based on any particular split or percentage per Antitrust laws.
Another misconceptions is that a variable commission is when the listing agent wants to “reserve the right” to negotiate the total commission with the seller at the time of presenting an offer.
Acting on Inappropriate Lender Requests for Seller Contributions --Lenders may go after money that sellers have in the bank or retirement accounts as a settlement to approve the short sale. The lender may communicate the demand to the realtor to get the seller to sign a note as a condition of the sale. If the loan qualifies under the state anti-deficiency statutes, the lender has no claim to this money, and agents that suggest otherwise may be at risk for negligence claims. If a lender demands money or a note, allow them to communicate it to the client directly.
3. Why is it necessary to disclose variable rate commissions?
The requirement for listing agents to disclose variable rate commissions is to allow cooperating agents and their buyers to make informed decisions in determining offer amounts for properties. For example, if there was a variable rate commission on Broker A’s listing and Broker B’s buyer is interested in making an offer on said listing, Broker B’s buyer is ethically entitled to know that if Broker A also represents a buyer with an offer on the subject property, two identically written offers will each net the seller different amounts, and therefore, Broker A’s buyer’s offer may actually have an advantage by netting the seller more due to the variable commission.
4. Aren’t listing brokers allowed to charge whatever they want? And isn’t it between the listing broker and the seller?
Absolutely! But when the terms of the commission affect the cooperation by other brokers and a difference in competitive advantage between buyers, it becomes necessary to disclose.
5. Does the listing broker have to disclose the full terms of the commission negotiated with the seller?
No. If there is a variable rate commission disclosed, potential cooperating brokers may call the listing agent to determine what the differential is between the commission paid to a cooperating broker, and the listing agent must disclose the differential as a percent between the two scenarios, but the listing agent does not need to disclose the total commission negotiated.
6. If you’re a buyer’s agent, and you are aware of a variable rate commission agreement on a property your buyers are interested in, should you disclose it to the buyers?
Yes. You MUST disclose it before the buyer makes an offer.
** excerpt from AAR article by Alice Martin
Tax Credit Renewed and Revised
The IRS Homebuyer Tax Credit bill has been extended and expanded.
Please see the attachment which covers a comparison of the former and new features of the bill.
For first-time buyers, the credit is similar… for principal residences, must not have owned a principal residence for 3 years prior.
For current home owners, the credit is $6500, effective from the date of enactment, when the home being sold was the principal residence for 5 consecutive of the last 8 years.
The income limits for both first-time and move-up buyers is $125k for single or $225k for married. The maximum limit of the purchase price for the home is $800,000.
Please note that the extension is good for contracts written through April 30, 2010 and closed no later than July 1st, 2010, which is really not much time. Take advantage of the extension and get your first time and move-up buyers out there! Again, the greatest motivator for all people is... the fear of loss. Make sure that your buyer contacts know that they must act quickly to take advantage of the $8000 or $6500 tax credit.
New Free Fax-to-Email Tool: MongoFAX
If you end up with hardcopy paperwork that you need to email to someone, you can always come into the office, scan your paperwork, and email it from the computer across from it, but if you are away from the office and in need of a way to email a document that you only have in hardcopy, there is a new free service available to you for just the occasion! MongoFAX allows agents to fax paper-based documents directly to any email address. You don’t need to register, and you don’t need a login or password. All you need is a fax machine, paper documents, and the MongoFAX cover sheet. You just fax your hardcopy paperwork with the completed MongoFAX coversheet on top to the toll-free number on the MongoFAX coversheet, and your paperwork will be emailed to the designated email addresses.
New GFE/HUD1 Effective January 1, 2010
As a result of ongoing RESPA reform, HUD has revised the Good Faith Estimate and HUD1. The object of the revision is to simplify and clarify the documents for buyers and sellers. Of course, in simplifying each document, the GFE has increased from one to three pages, and the HUD1 has increased from two to three pages. It is important that you take some time to learn about the changes so that you will be able to explain the forms to your clients.
When you receive notice that your buyer’s appraisal is less than the agreed upon purchase price, have the discussion with your buyer about their options:
Good Faith Estimate:
1. The lender must provide a GFE to the borrower within 3 business days of the loan application.
2. The lender cannot verify the borrower information prior to issuing the GFE.
3. The quote must be good for 10 days unless circumstances change.
4. The lender cannot charge for the GFE preparation.
5. Mortgage must disclose Yield Spread Premiums which represent fees paid to the broker on the loan.
6. Lender is bound to the GFE.
HUD-1 Settlement Statement:
1. HUD-1 some fees that are currently shown broken out will become bundled such as title insurance, settlement costs, title exam fees, commitment fees, etc.
2. Escrow officers will not be able to complete the third page of the HUD-1 without the lenders settlement statement. Page 3 will disclose whether the lender has exceeded the allowable tolerances between the GFE and actual costs.
3. Specifics with regards to the buyer’s loan will be disclosed clearly on page 3 such as whether or not there is a prepayment penalty and what it is, the initial monthly payment, whether or not the interest rate might adjust, and whether or not there will be a balloon payment due.
Juliet Lewis from First American Title will be in the office on Monday, December 21st at 1pm to present the changes to the HUD-1 and what you need to know about the changes to represent your clients.
Docusign for Electronic Signatures:
One of the most convenient tools available to realtors in today’s market is Docusign, the electronic signature software, which allows you to move forward with paperless documentation and provide cutting edge service. If you are looking to increase your dollar per hour wage earned, consider adding Docusign to your tool belt.
Contact Nicole to sign up. The cost is $15 per month added to your office bill. There is no contract to sign. The service is the advanced version with unlimited envelopes and the ability to add text boxes. Additionally, Angela has created templates for most of the common AAR and office forms so that when you upload a contract into Docusign for your clients’ signatures, the template automatically applies the signature and initial flags to the appropriate lines.
Angela will be conducting an information session and training class on Docusign on Friday, December 4th at 12:30pm following our office meeting.
Wednesday, October 28, 2009
October Newsletter
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| | Broker Newsletter | ||||
| October 15, 2009 | | ||||
| In This Issue · Protect Yourself When Listing Short Sales · Earnest Money Rules · Time Running Out for Buyer Tax Credit · Appraisal Contingency Notification · SureClose Reminder Revelation Links Current RE Issues Information on the in’s and out’s of the tax credit for first-time homebuyers. A list of HUD homes available for purchase by city. Updated ARMLS Rules A table of Old vs. New ARMLS Rules Read Our Online Broker Blog Contact Us 480.722.9800 Office 480.802.1599 Broker Hotline brokerreview@westusa.com | Protect Yourself: Short Sale Listing Risks
1. Misrepresenting Tax Consequences -- Although a law was passed in 2007 directing the IRS not to count forgiven mortgage debt as income, the provision in limited. It applies only to purchase money; it does not apply to second homes or investments; and it doesn't apply to a cash-out refinance. There is also a dollar limitation. Do not say that there is no tax consequence. Advise clients to speak with their accountants about whether or not they may experience a tax consequence. 2. Acting on Inappropriate Lender Requests for Seller Contributions --Lenders may go after money that sellers have in the bank or retirement accounts as a settlement to approve the short sale. The lender may communicate the demand to the realtor to get the seller to sign a note as a condition of the sale. If the loan qualifies under the state anti-deficiency statutes, the lender has no claim to this money, and agents that suggest otherwise may be at risk for negligence claims. If a lender demands money or a note, allow them to communicate it to the client directly. 3. Providing Poor Oversight of a Short Sale Negotiator -- If you take a hands off approach to your short sale negotiators business, you could be charged with negligence if a deal falls apart. Make sure that you and your negotiator have a process for communication. Keep a communication log to ensure that your seller's transaction is being worked on. 4. Facilitating Transactions not Listed on the HUD-1 -- An investor may try to sweeten the deal for a seller by offering an incentive for the seller to accept and present their contract to the bank for approval. The seller's lender will frown upon the seller walk away from the home with money when they are taking a loss on it. Inflated values for personal property could draw ties to loan fraud if they are considered deceptive. Do not broker deals for personal property. ** excerpt from Sevrar News Magazine article by Robert Freedman Time Running Out for Tax Credit There is a lot of focus in the media right now about the expiration of the current Tax Credit bill. Additionally, there is a lot of talk about whether or not it will be extended and potentially even increased. Did you know…? The greatest motivator for all people is... the fear of loss. Make sure that your buyer contacts know that they must close escrow prior to December 1st, 2009 to take advantage of the $8000 tax credit. That means that unless they are a cash buyer, they must have a home under contract by the end of October if they have a chance of getting it closed on time. Earnest Money Receipts and ADRE Rules Please remember that the Arizona Department of Real Estate requires that in accordance with our fiduciary duty of accounting, we must have escrow open within one business day of our contract date unless otherwise stated in the contract. In the event of an ADRE audit, we may be subject to a $1000 fine for each non-compliant file. Since contracts are due to the office for review by day 4, you should be able to submit the earnest money receipt with your contract for review. Our office policy is that you must submit the earnest money receipt within 24 hours of submitting your contract. If you represent the buyer, and you are aware of circumstances that will prevent your buyer from opening escrow within one business day, disclose that in the purchase contract. For example, if you have an out of state buyer that will be wiring funds, write in section 8a of the contract “Buyer will be wiring funds to open escrow within 3 days of contract acceptance.” If you represent the seller, and the buyer fails to open escrow in a timely manner, you should cure the buyer or have the parties sign an addendum disclosing the agreed upon change regarding the deposit of earnest money. Appraisal Issues In today’s market, it is very common for appraisals to not meet agreed upon purchase values. It is important that you are aware of the timelines associated with the appraisal contingency as the buyer only has 5 days to evoke their rights to cancel and retain the earnest money. When you receive notice that your buyer’s appraisal is less than the agreed upon purchase price, have the discussion with your buyer about their options:
“Buyer and Seller agree to reduce the purchase price to $XXX,XXX. Buyer received notification on October 1, 2009 that the subject property appraised at a value of $XXX,XXX. Seller must sign and deliver this addendum back to the buyer by 5pm on October 6th, 2009 OR this contract will be deemed cancelled per the appraisal contingency in section 2C of the contract and all earnest money shall be refunded to the buyer.” This finite verbiage ensures that action will be taken during the five day period that the buyer has to cancel. If the seller does not return by the deadline, send cancelation paperwork to title with the incomplete addendum. If you represent the seller, I would certainly want to be able to show the seller a copy of the appraisal before I would suggest they agree to a price reduction. Additionally, it is important to read the appraisal. Many times there are errors in properties selected, values, etc. that may be contested with the intention of obtaining a revised appraised value. Sureclose Reminder: Per ADRE, all contracts and documents must be reviewed within 5 days of being signed by the buyer and seller. Please submit your paperwork to the office as follows: New Contracts: · Fax to 1.888.600.0161 · Email to revcontract@mysureclose.com New Listings: · Fax to 1.888.600.0162 · Email to revlisting@mysureclose.com Add to Files: · Fax to 1.888.600.0163 · Email to addtofiles@mysureclose.com When a closing package has been received, and a check is processed, you will be sent an email notification that will either state that your check is ready or that you have remaining file requirements. Please check your Sureclose file if you have remaining requirements, and you will be able to see exactly what we are looking for. ALL CAPS REQUIREMENT MESSAGES: We have recently changed our office accounting and record keeping software system. Our old accounting and file management system is no longer being used; however, it still has several current listings and transactions files. It is very possible that you will continue to receive some messages from the old system until all of the old files have been cleared. If you receive a “PAGE 01” email message with a message in all capital letters, please do not be alarmed. All file requirement or information about your checks will be sent through Sureclose. | ||||
| |
Earnest Money Requirements
The Arizona Department of Real Estate requirement is that escrow be opened within 1 business day of the contract date. If we are audited and found to be noncompliant, we will be fined $1000 per occurrance. This is a very important issue as ADRE sees it as evidence of our fiduciary duty of accounting.
Traditional Transactions:
Your earnest money receipt must be dated and submitted within 24 hours of the contract date.
Short Sale Transactions:
You must submit your "Agreement Notifications" to Sureclose for review. Your EM receipts must be dated and submitted within 24 hours of the Agreement Notification date.
Fraudulent Property Tax Letter
Agents: You and your clients may have received a letter offering to reduce property taxes. Please see the article from the Arizona Republic below regarding action by the Arizona Attorney General against one company sending that letter. You may want to be proactive and communicate this with your clients. Attached is a copy of one such letter.
Goddard sues company over property-tax letters
State Attorney General Terry Goddard filed a lawsuit and received a temporary restraining order against a California firm that has mailed thousands of official-looking letters soliciting money in exchange for a property-tax-assessment analysis.
The letters carry the name Property Tax Review Board Inc. and imply that the company can reduce property-tax bills if residents pay $189.
Goddard said the advertisement violates Arizona's Consumer Fraud Act because of its official appearance and because the deadline for property-tax appeals was in April.
Goddard himself received a letter at his home Thursday and said the personalized advertisement "is close enough that it would really grab my attention."
The letter does state that it is from a non-government agency but only in fine print.
"We are hoping we are going to be able to protect anybody else from this," Goddard said, adding that his office received hundreds of calls, including complaints from the state's 15 county assessors.
Mesa resident William Rogers Jr., 81, said he received a letter Thursday and was suspicious. He said he was concerned that newcomers to the area might be taken in.
"Heck, they might see this and write a check to reduce taxes," he said.
He said he called the Better Business Bureau and learned there were other complaints.
The lawsuit names Property Tax Review Board Inc., a Granada Hills, Calif., company; Property Tax Review Board President and CEO Michael McConville of Simi Valley, Calif.; and Carmen Mercer of Tombstone, the owner of the post-office box included in the solicitation.
Attempts to reach McConville and Mercer for comment Friday were unsuccessful.
The restraining order requires the defendants to stop mailing the advertisements and allows postal authorities to intercept any responses.
"Given the sophistication of the solicitation, I'm afraid many people have written $189 (checks) because it is such a compelling piece," he said.
According to Goddard's office, Mercer has turned over the post-office box to U.S. postal inspectors and has surrendered the more than 1,000 responses she received.
Goddard said Mercer, who has cooperated with investigators, claimed she was asked by a friend to open the post-office box and did not know what it was going to be used for.
Goddard added that postal inspectors will work to return the money to residents.
The lawsuit seeks to stop the defendants from soliciting property owners, as well as refund payments they've already received and pay $10,000 for each violation.
Homeowners can also file a complaint with the Attorney General's Consumer Information and Complaint section at 800-352-8431 or www.azag.gov.
Queen Creek - San Tan Valley Change
The part of Queen Creek that was in Pinal County has changed their name. Here are some Q & A regarding the change. The information is an excerpt from the www.pinalcountyaz.gov website.
The link below shows a map of the areas impacted by the changed.
What are people referring to when they speak of San Tan Valley?
San Tan Valley is the name of Arizona’s newest community. It is also Pinal County’s largest community in terms of overall population. San Tan Valley comprises a large area south of the incorporated area (meaning inside the town limits) of Queen Creek, Arizona.
What zip codes are affected by the new name San Tan Valley?
Portions of the following zip codes: 85142, 85140, 85143 and 85132. When did the name change take place?
On July 1, 2009, residents of this area began using San Tan Valley, AZ (New Zip Code) on correspondence, mailing labels and stationery.
Why did we get this new name?
This area is not part of the Queen Creek town limits and there was often confusion about where people live. Depending on who you talk to, the area is known by different names: Bella Vista, Queen Creek, Johnson Ranch, “south of Queen Creek” or other variations like that.
The U.S. Postal Service announced a change in zip codes for a variety of areas throughout Pinal County. In his communication with local residents, District 2 Supervisor Bryan Martyn discussed giving the area a specific identity. By “branding” the area as different from – and larger than – Queen Creek, Supervisor Martyn believes the community will have a more marketable identity.
“When the economic recovery happens, and it WILL happen, companies will be looking to expand their businesses or regional offices in places like the San Tan Valley,” Martyn says. “We have a young, vibrant and diverse workforce that would love the chance to work closer to home. We need this marketable identity to attract the kind of economic development that pays higher wages.”
The change in zip codes offered perfect timing for changing letterhead, address labels and so forth. If you already have to make the change, it makes the most sense to do it all at once, Martyn said.
The U.S. Postal Service announced a change in zip codes for a variety of areas throughout Pinal County. In his communication with local residents, District 2 Supervisor Bryan Martyn discussed giving the area a specific identity. By “branding” the area as different from – and larger than – Queen Creek, Supervisor Martyn believes the community will have a more marketable identity.
“When the economic recovery happens, and it WILL happen, companies will be looking to expand their businesses or regional offices in places like the San Tan Valley,” Martyn says. “We have a young, vibrant and diverse workforce that would love the chance to work closer to home. We need this marketable identity to attract the kind of economic development that pays higher wages.”
The change in zip codes offered perfect timing for changing letterhead, address labels and so forth. If you already have to make the change, it makes the most sense to do it all at once, Martyn said.
Does this mean we are now an incorporated town or city?
No, it does not. All this action does is to create a name for the geographical area. Incorporation is a much more involved process that is described in Arizona State Statutes Title 9-101. More about incorporation can be found on the web at: www.azleg.gov or at http://www.azleague.org/pdf/pub_municipal_incorp.pdf.
Pinal County does not take a position on incorporation. Deciding to incorporate or not is a matter that is decided by local residents. People may choose to incorporate for a variety of reasons but often it is because they would like their own police or fire protection, more control over local land use decisions or to solve specific infrastructure needs at the local level. There are many pros and cons related to incorporation and the Arizona League of Cities and Towns’ guide linked above can help you learn more about incorporation.
Pinal County does not take a position on incorporation. Deciding to incorporate or not is a matter that is decided by local residents. People may choose to incorporate for a variety of reasons but often it is because they would like their own police or fire protection, more control over local land use decisions or to solve specific infrastructure needs at the local level. There are many pros and cons related to incorporation and the Arizona League of Cities and Towns’ guide linked above can help you learn more about incorporation.
How was San Tan Valley chosen to be our new name?
A public vote was taken online and by paper ballot from Friday, June 19, 2009 until Monday, June 22, 2009. A committee of people gathered to count ballots and witness the ballots being counted and the name was announced on Tuesday, June 23, 2009.
The name “San Tan Valley” garnered 18 percent of the vote, beating 23 other names that had been recommended for the ballot. The Greater San Tan Area Coalition organized the voting and established the website. The Coalition also sponsored a public meeting on Monday, June 22 at the Circle Cross Ranch K-8 School to discuss the name and vote. You can learn more about the Greater San Tan Area Coalition at their website: www.ourgstac.com.
The name “San Tan Valley” garnered 18 percent of the vote, beating 23 other names that had been recommended for the ballot. The Greater San Tan Area Coalition organized the voting and established the website. The Coalition also sponsored a public meeting on Monday, June 22 at the Circle Cross Ranch K-8 School to discuss the name and vote. You can learn more about the Greater San Tan Area Coalition at their website: www.ourgstac.com.
What is the population of the new San Tan Valley?
Population estimates indicate that the area population is slightly below 80,000, making the new San Tan Valley area Pinal County’s biggest population center.
List of communities affected by this change:
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July Newsletter
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| | Broker Newsletter | ||
| July 27, 2009 | | ||
| In This Issue · Buyer Issues in Purchasing REO or Short Sale Properties · Chinese/Defective Drywall · ARMLS Rule Change for Short Sale Commissions · SureClose Reminder · Broker Blog Revelation Links Current RE Issues Information on the in’s and out’s of the tax credit for first-time homebuyers. A list of HUD homes available for purchase by city. Updated ARMLS Rules A table of Old vs. New ARMLS Rules Read Our Online Broker Blog Contact Us 480.722.9800 Office 480.802.1599 Broker Hotline brokerreview@westusa.com | Buyer Beware!
UCC Filings: There are some liens acquired by previous owners that may or may not show up on the preliminary title report. Schedule B of the preliminary title report may indicate the presence of liens for water softeners or pools. Be sure to review preliminary title commitment in a timely manner. However, you should have a conversation with your buyer that the lien may not show up on the Schedule B. Buyers have reported water softener companies and pool companies showing up at their new homes to collect their pool equipment and water softeners due to non-payment. HOAs: Any HOA liens should legally be wiped out through foreclosure; however, your REO buyer may end up in a situation where the HOA refuses to provide your buyer with services and amenities unless a previous owner’s debts are paid. It may, in fact, be easier for your buyer to negotiate a settlement of the previous debt with the HOA than to fight. Squatters: In the event that your buyer is purchasing an REO property that is vacant and potentially not well secured, it may be possible that the buyer is greeted by squatters upon closing. The eviction of unwanted tenants shall be the responsibility of the buyer, and the buyer will be responsible for not only the proper eviction of the people but also the proper treatment of any personal property of said tenants. There are obvious benefits to your buyer in buying bank owned listings including the wholesale pricing and the reduced escrow periods in comparison to short sale transactions. Allowing your buyers to make decisions with regard to the risk-reward situation by providing them with as much information as possible is the best way to assist them through the REO home buying experience. New Waiver: Chinese Drywall We are starting to see a new waiver for our buyers to sign. The addendum has been presented by asset managers for REO properties. It states that the seller has no knowledge pertaining to the presence of Chinese/defective drywall and offers the buyer the opportunity to either conduct a drywall inspection at the buyer’s cost or waive the buyer’s opportunity to conduct a risk assessment of the presence of Chinese/defective drywall. During the national housing boom from 2004 through 2006, we experienced a shortage of building materials in the United States. Drywall was imported from China. Apparently some of the Chinese drywall contains and may at sometime emit a sulfur compound. The sulfur compound may corrode the copper in AC coils, refrigerator coils, and electrical wiring. Most of the complaints regarding the drywall are centered in Florida; however, the Chinese drywall may have been used in several high growth states including Arizona. The US Consumer Product Safety Commission reports that 681 claims have been made across 22 states regarding the drywall. The claims range from health concerns to electrical fires caused by the corroded wiring. Impact on You: You do not need to become a drywall expert. Your buyer’s inspection will reveal unusual signs of corrosion. For more information, please visit the US Consumer Product Safety Commission at http://www.cpsc.gov/info/drywall/index.html. ARMLS Rule Change for Short Sale Commissions Back in March, ARMLS rules had changed to allow listing agents to disclose in the realtor remarks or short sale listings that the commission may be decreased by the sellers’ lender. The listing agent could disclose the terms of any decrease in the realtor remarks. However, ARMLS has changed the rule again, reverting back to the former rule in which whatever commission is offered shall be paid regardless of any reduction by the sellers’ lender. The rule revision went into effect immediately, and ARMLS will start citing agents with commission verbiage in the realtor remarks on August 1st. Please make sure that your listings do not contain any verbiage about changing commissions, and also make sure that you will be able to pay the commission you are offering. Sureclose Reminder: Per ADRE, all contracts and documents must be reviewed within 5 days of being signed by the buyer and seller. Please submit your paperwork to the office as follows: New Contracts: · Fax to 1.888.600.0161 · Email to newcontract@mysureclose.com New Listings: · Fax to 1.888.600.0162 · Email to newlisting@mysureclose.com Add to Files: · Fax to 1.888.600.0163 · Email to addtofiles@mysureclose.com When a closing package has been received, and a check is processed, you will be sent an email notification that will either state that your check is ready or that you have remaining file requirements. Please check your Sureclose file if you have remaining requirements, and you will be able to see exactly what we are looking for. | ||
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May Newsletter
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| May 15, 2009 | | ||||
| In This Issue · Short Sale Agreement Notice · Appraisal Changes · AAR Forms Updated · SureClose Reminder · Broker Blog Revelation Links Current RE Issues Information on the in’s and out’s of the tax credit for first-time homebuyers. A list of HUD homes available for purchase by city. Updated ARMLS Rules A table of Old vs. New ARMLS Rules Read Our Online Broker Blog Contact Us 480.722.9800 Office 480.802.1599 Broker Hotline brokerreview@westusa.com | Short Sale Agreement Notification Process
Your Listings: When you receive notice that your seller’s lender has approved the short sale of the subject property, you need to provide the agreement notice immediately. One very effective way to provide that notice and ensure a clear response and direction from your buyer in first position is to use an addendum with the following verbiage: “This shall serve as Agreement Notice of the Short Sale approval by the Seller’s Lender. This contract is approved with the following terms (include the required close date, sales price, and any other terms required by the seller’s lender). Buyer agrees to these terms and will proceed with the contract by signing and delivering this addendum back to seller within 24 (or 48) hours OR this contract will be deemed cancelled due to the unfulfilled short sale contingency.” This finite verbiage requires action and commitment by the buyer. If the buyer does not commit to move forward, you effectively terminate the contract to allow your seller to move on to a back-up offer. Appraisal Changes On May 1st, the Home Valuation Code of Conduct went into effect. This new code was adopted to improve the accuracy of appraisals. All Freddie Mac and Fannie Mae loans and loan servicing companies must follow the code which is intended to limit the amount of influence a lender can have on the appraised value of a property. At this time, the change does not affect FHA, VA, USDA loans. Before: Lenders ordered appraisals for your buyers directly from local appraisers. Now: Lenders order appraisals from Appraisal Management Company (AMC). Impact on You: Agents, buyers, and sellers need to be prepared for some additional delays in getting appraisals ordered, returned, and modified. In many, even most appraisals, there are minor errors or typos in addresses, amounts, etc. Currently, an underwriter can place a call and get those errors corrected directly by the appraiser. Now, requests must be made through the AMC which may cause delays in the final stages of approval. The best way to handle the change is to communicate the change to your clients ahead of time and prepare them for the possibility of delays. Additionally, it is important to make sure appraisals are ordered early in the process to ensure timely delivery. AAR Forms Updated Hopefully you’ve noticed the new look and feel of most of the AAR contract forms. For the most part, the changes are only in the formatting, but please be aware of the actual verbiage changes in the following forms: · Real Estate Agency Disclosure and Election (READE) · Loan Status Update (LSU) · Lead Base Paint Disclosure (for both Sales and Rentals) · Cure Notice Please make sure that you are using the most current forms. SureClose Reminder File Completion: As the closing date of your transactions approach, please proactively login to SureClose again and check the status of your transactions to ensure that your file requirements are met so that you will be paid in a timely manner. As each requirement is reviewed and met, it is marked “complete”. You can see which items have been marked complete and which are remaining under the “Documents” tab. Once all requirements are met, the top line will be marked “Your File is Complete”.
Submitting Files: Remember to submit your paperwork one of the following ways: 1) For a new file, include an A100 or Listing Coversheet and… · Email to azjacquet@mysureclose.com · Scan into the black and white copier/scanner in the office. 2) For additions to an existing file, include the “Add to File” coversheet and… · Email to azjacquet@mysureclose.com · Scan into the copier/scanner · Add to file paperwork directly into your electronic files if you have ProView and even in some instances with the basic view. Archive Approaching: The SureClose system has an automatic archival process in which it archives files that have not been touched in 85 days. The system will send you an email warning you that your 85 days is approaching. All an agent needs to do is work in the file to restart the clock. This could mean sending an update message, completing a task, uploading a document, recording a status item or some other change. The 85 days is a system setting that we cannot change, but it would be unlikely that you really not perform any work on a file in 85 days anyway. Visit Our Broker Blog for Answers Don’t forget our online Broker Bulletin for West USA Revelation agents. We will post information on specific real estate and contract topics to assist you with your transactions. Coming soon will be a list of helpful contract clauses for various situations. If you look today, you will find information on topics ranging from Using Lease Option Contracts to Mortgage Fraud as well as Short Sales. Additionally, I post the monthly Broker Newsletters there for you to refer back to. | ||||
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