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.