October Newsletter

	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 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. Updated ARMLS Rules A table of Old vs. New ARMLS Rules Broker Blog Read Our Online Broker Blog Contact Us 480.722.9800 Office 480.802.1599 Broker Hotline http://www.mywestusa.com brokerreview@westusa.com	Protect Yourself: Short Sale Listing Risks With Short Sale transactions representing a large portion of our market, be aware of the following potential risks to you as the agent. Remember that the short sale transaction is a regular real estate transaction with a buyer and a seller. It just has a specific contingency that is the short sale negotiation between the seller and the seller's lender. Do not represent yourself as an “expert” on short sales, and whenever your client asks “should I?” followed by anything to do with short sale, loan payments, or foreclosures, refer them to their attorney! 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: 1. The buyer can exercise the appraisal contingency in section 2c of the contract and elect to cancel the contract and receive their earnest money back. 2. They buyer can discuss with their lender the possibility of coming to the table with additional cash. For example, if the agreed upon purchase price is $110,000 and the buyer has an FHA loan with 3.5% down payment, but the home only appraises for $100,000, the buyer may be able to get the loan off the $100,000 price by bringing the $3500 down (3.5%) plus the difference to the contract price of $10,000 for a total of $13,500. 3. The buyer and the seller may be able to negotiate another price anywhere in between the appraised value and the original contract price. “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

33 comments by Angelique Soenarie - Aug. 15, 2009 12:00 AM
The Arizona Republic

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.

http://pinalcountyaz.gov/Residents/Documents/SanTanValley.pdf

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.

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.

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.

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:

Arabian Trails Bella Vista Bella Vista Farms Borgata Caballero Cambria Canyon Rock Castlegate Circle Cross Copper Basin Dobson Farms Equestrian Manor Estates Fairways I, II & III Gallery I, II & III Goldmine Equestrian Greens I & II Home Place Horseshoe Canyon Ironwood Crossing Johnson Ranch Phase I Johnson Ranch Phase II Lakeview Gardens Laredo Ranch

Lariat Legends Magic Ranch Magma Ranch Masters Meadow Vista Moonshadow Morning Sun Farms Mustang Ridge Northern Johnson Ranch Oasis Magic Ranch Ocotillo Trails Ocotillo Verde Ocotillo/Kenworthy Pecan Creek Pecan Farms Pecan South Ponderosa Quail Run Rancho Bella Vista Riding Stables Rodeo Ridge Rurals

RV Park San Tan Heights San Tan Shadow Silverado Ranch Skyline Estates Skyline Ranch Solera Sonoran Villages Southern Johnson Ranch Stagecoach Pass Sterling Stonegate, Rosewalk Superstition Views Taylor Ranch The Crossings The Links The Springs Torrey Park Trilogy Vineyard Estates Ware Farms Wayne Ranch Whitewing

July Newsletter

	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 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. Updated ARMLS Rules A table of Old vs. New ARMLS Rules Broker Blog Read Our Online Broker Blog Contact Us 480.722.9800 Office 480.802.1599 Broker Hotline http://www.mywestusa.com brokerreview@westusa.com	Buyer Beware! When you are representing a buyer, the more obstacles you can prepare your clients for, the more likely they will be to clear the hurdles and proceed with the transaction. Through experience, we gain the knowledge to foresee problems before they happen. When you are representing a buyer in the purchase of an REO, there are another whole set of potential issues to deal with. The following are some obstacles experienced by other buyers in recent REO (bank owned) transactions. 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.

May Newsletter

	Broker Newsletter
May 15, 2009
In This Issue · Short Sale Agreement Notice · Appraisal Changes · AAR Forms Updated · SureClose Reminder · Broker Blog 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. Updated ARMLS Rules A table of Old vs. New ARMLS Rules Broker Blog Read Our Online Broker Blog Contact Us 480.722.9800 Office 480.802.1599 Broker Hotline http://www.mywestusa.com brokerreview@westusa.com	Short Sale Agreement Notification Process Working effectively in today’s market requires the know-how to deal with both sides of a short sale transaction. The most common recent issues include “How do I communicate the bank’s approval to the buyer?” and “How do I make sure that the buyer in first position is going to move forward and perform before I decide to move on to the back-up offer?” The Short Sale Addendum to the Purchase Contract defines that when the seller’s lender approves the short sale, the seller will deliver to the buyer an “Agreement Notice”. The notice should define the terms of the bank’s approval. 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”. If your file is marked “Incomplete”, take a look at the remaining requirements and upload, email, or scan the remaining requirements. You can also get a quick snapshot of the status of your transaction by taking a look at the “Status” tab. Requirements that have been fulfilled will be in green in the top section under “Completed Items” while the remaining requirements will be listed at the bottom in blue under “Scheduled Items”. 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.