With Practice, Everyone Can Own a Home.

REALTOR® Outlook

By Kay Wilson-Bolton

March 28, 2007

Over the issue of lenders and subprime loans, someone testified this week that not everyone can, or should, buy a home. We’ve all wished we had said what we were thinking in a different way, and this may be a good example.

A more appropriate statement would be that, “Not everyone is ready to buy a home.”

People who work hard in America prove every day that all things are possible. One of our guiding principles states,  “We are endowed with inalienable rights…” REALTORS® believe that one of them is to own a home and experience the American dream.

We can likely agree that not every high school senior is ready for college. Spending two years in Junior College preparing for future academic efforts may solve that.

Not every apprentice electrician is ready to re-wire a home; and not every nurse is ready to serve in ICU. Acquiring the skills for these tasks takes preparation, study and commitment.

Learning to “own a home” is a valuable, overlooked skill that deserves study now that many homeowners are experiencing the pain of losing the home they cannot afford to keep.

We now know this is largely due to the buyers’ lack of understanding or lack of good information as to the consequences of variable loans, creative attempts to qualify and the reality of “no down payment”.

The real estate community should take on the challenge of client preparation and say “never again” to another phase of predatory and aggressive, often foolish, lending practices.

One REALTOR® professional has already taken steps in that direction. For many years, Anita Pulido, of ReMax, has committed herself to preparing buyers for homeowners—one she created and requires for first time homebuyers.

She is known for keeping late hours, taking her clients in shifts late into the evening hours, to prevent them from taking on responsibilities before they are ready.

She is an example of a REALTOR® committed to excellence and client care. She can recite many success stories throughout her career. We can all learn from her efforts to protect buyers from disaster and disappointment.  Anita can be reached at 805.933.6602.

 

 

 

Kay Wilson-Bolton is the owner of CENTURY 21 Buena Vista and CENTURY 21 Ability. She brings a regional perspective to local issues. She can be reached at 805.340.5025. Her website is http://www.readysetkay.com

 

CONSIDER WISELY THE SHORT SALE

REALTOR® Outlook

By Kay Wilson-Bolton

March 21, 2007

The training circuit for REALTORS® and real estate agents is heating up for another round of short-sale updates. There are numerous pre-listing and listing considerations that must take place, and the insurance providers for most real estate companies have issued new warnings and unique documents.

Simply stated, the owner of a home who owes more than the home is now worth negotiates with the lender to see if the home can be sold at market value with the lender agreeing to take less than the loan amount.

Licensees’ should be careful when marketing to attract sellers who need to sell and want to see if a  “Short Pay” will work for them.

Making certain representations can place the licensee within the definition of a “Foreclosure Consultant” (Civil Code Section 2945). No promises or guarantees should be included in any advertisements or flyers.  A broker should review all advertisements.

An agent should be careful when accepting referrals from credit counseling services. An agent should investigate the referral source to determine its ethics and business practices before taking any referrals.

When a short pay appears to be necessary, the CAR Purchase Agreement Addendum (form PAA 4/06 revision) should be used which provides language specific to the “Short Pay” Sale.  .

A seller must know the ramifications of a successful short-pay agreement with the lender.  An agent considering taking a listing on a short pay should advise the seller, in writing, to seek tax and legal advice before signing the listing agreement.

An unknown and overlooked element is that the seller will be obligated to pay taxes on any debt forgiven by the lender. The IRS considers debt forgiveness as ordinary income. Consequentially, the difference between the loan amount and the short-pay agreement will be taxed at the seller’s ordinary tax-bracket.  Honorable members of the real estate community must provide this disclosure to the Seller must be in writing.

A lender may handle a short pay in a number of different ways. It can report the loan as paid in full, which would have no adverse credit consequences. A lender may also report the loan as being “Satisfied” or “Settled”. Future Lenders and credit reporting agencies may consider satisfied or settled loans as being similar to a deed in lieu of foreclosure.

A seller should know that a lender would require detailed financial statements from the seller as a condition to approving a short pay. In the event less-than-accurate information from the seller was used to obtain the loan the seller now cannot afford, it may trigger accusations of fraud.

This may cause a seller to refuse to divulge accurate financial statements. An agent probably will want to refuse to take a listing in this situation. At the very least, a listing agent should add a term in the listing agreement obligating the seller to cooperate with the lender’s requests.

The listing agreement as well as the MLS information should show the property is subject to short sale. Both the Listing Agreement and the MLS should contain a statement that any sale is subject to Lender approval. This would apply to the commissions’ provision of the MLS as well as the Listing Agreement.

This is important information if a buyer has sold their home contingent on finding another. The short sale process takes some time and it could delay a timely, contingent closing.

 

Kay Wilson-Bolton is the owner of CENTURY 21 Buena Vista and CENTURY 21 Ability. She brings a regional perspective to local issues. She can be reached at 805.340.5025. Her website is http://www.readysetkay.com

 

WHERE ARE THE CORNERS?

REALTOR® Outlook

By Kay Wilson-Bolton

March 14, 2007

In most modern neighborhoods, identifying property corners is not significant when property lines are consistently marked by walls and fences. The question is significant when the property lines blur with open spaces between lots, and Ventura County still has many homes with large lots with no man-made barriers separating them

There was a time when boundaries were marked by streams, rocks and trees. This worked until those monuments and markers moved.

With encroachments comes the necessity for resolution for a variety of reasons.  It is impossible to get title insurance, land values can be marginalized and disputes can arise when plans for expansion are initiated.

The irony of such discoveries that it is possible for properties to be sold and re-sold without knowing that encroachments exist.

This is when surveys are helpful. However, a recent lesson revealed that even a survey might not be enough.

One surveyor discovered a possible encroachment while surveying for corners.

While the contract called for the buyer to remove all contingencies, including inspections, review and approval of reports and all the material the seller provided, the buyer called for additional research in the form of an ALTA survey. This survey revealed that a new room addition, fully permitted, encroached five feet onto the neighbor’s property.

The neighbor graciously offered to participate in granting 20’ through a lot line adjustment and with closing only a week away, the wheels began to turn out legal documents which included an agreement for holdback deposits, an easement regarding encroachments and another agreement for granting the lot line adjustment.  Such legal documents required the review of numerous parties and their attorneys.

The day before closing, the agreements remained unsigned, the loan lock expired which meant an increase in the borrowers interest rate, and the buyer cancelled the transaction—a tragic ending to weeks of work and anticipation.

The lesson ahead is to identify property lines in advance of sale and for everyone involved to carefully answer the question about “where are they?”  It is okay to not know and there are numerous way to find out.

 

Kay Wilson-Bolton is the owner of CENTURY 21 Buena Vista and CENTURY 21 Ability. She brings a regional perspective to local issues. She can be reached at 805.340.5025. Her website is http://www.readysetkay.com

 

SELLING A HOME TAKES STRATEGY

REALTOR® Outlook

By Kay Wilson-Bolton

May 2, 2007

Since the season of rapid real estate is behind us, surviving REALTORS® know that selling real estate requires work—and strategic thinking.

While each of us has our own way of looking at things, here are some strategies that seem to be working.

If you plan to sell your home, study the competition before you price it. Don’t think that asking “a little more” will give you a chance to negotiate. In today’s market, asking a little more will keep you from getting an offer.

There are always exceptions. These would be those homes that are detailed to the max or unique to the competition for some specific reason.

Picking that “right price” usually means that you are just at, or slightly below, recent sales.

If you are planning to buy another home, your current home should be listed before you make any offers. Sellers are reluctant to accept contingency offers when the buyers’ has not begun the efforts to get their home on the market.

One favorable aspect of lower prices is that the home you buy will also be lower, thereby requiring a lower property tax payment.

Some homeowners price their homes at unrealistic prices because of the amount they owe. There are two rules in real estate that apply in any market. The value of your home is not determined by what you owe or what you want to buy.

Before any buyer contemplates selling their home on a “short pay” basis, where the bank accepts less than the amount owed to save the costs of foreclosure, they must consult a tax expert. It is possible that foreclosure is better because the debt relief is considered to be ordinary income and income tax will be due on that amount.

Price adjustments should be considered after 30 days, always in light of what the competition is doing. Staying ahead of the market is better than trailing it.

Any offer should be accompanied by a lender’s approval letter. This is not a statement of hope. It should be a statement of fact that based on buyers credit scores and income, they are qualified to purchase in a particular price range. Any letter that states less than that has no value and should not be relied upon by anyone—even the buyer.

A recent REALTOR® strategy included placing a home into the MLS stating that the home could not be seen “under any circumstances” until 10 days out because of upgrades and staging efforts. This can be problematic for the agent if the home is reported “in escrow” before the date of first showing, and the selling agent is also the listing agent.

Owners still think that granting a listing to a REALTOR® under an “office exclusive” basis for a lower commission is a good thing. Eliminating the REALTOR® community from selling any home is not a good thing.

In this market, sellers need the real estate community working towards a common goal, and that is to sell real estate.

Next to the Internet, REALTORS® are the number one source of buyers!

Kay Wilson-Bolton is the owner of CENTURY 21 Buena Vista and CENTURY 21 Ability. She brings a regional perspective to local issues. She can be reached at 805.340.5025. Her website is http://www.readysetkay.com

 

REALTORS® care about communities first

REALTOR® Outlook

By Kay Wilson-Bolton

April 5, 2007

The passions that drive REALTORS® come in various degrees and purposes. Housing is usually at the forefront and, as a REALTOR® community, segments of us gravitate towards a variety of issues of the heart and home.

            As an organization, we have supported Project Understanding, safe homes for women and children, Child Abuse and Neglect and others.

We are passionate about taking to task predators motivated by greed and short-term thinking who inflict pain and suffering on homeowners and their families

A recent call to action was raised by Monica Hurtado of Select Properties. She can be reached at (805) 650-3636 and would welcome ideas on how to end this problem. Julio Gomez of Legacy Realty Services is leading the effort for Ventura County Coastal Association of REALTORS®. He can be reached at 805.551.6743 and works with the Homeless Coalition.

While such issues are on the mind of many, it takes one or two to rally support and action. Supervisor Kathy Long has been quick to respond to questions about plans and efforts. None of it is simple, but it is a beginning.

Another heartbreaking issue is the need for Foster Care Families with a focus on keeping siblings together when they are placed in foster care.

There are but 197 foster care families in the County and more are needed, particularly qualified families who will provide respite care for foster care families in the daily trenches of being more than a mom and a dad.

Another area of concern is the need to provide for siblings placed in foster care and keeping them in the same home at a time when their emotional care is paramount and their emotional states most fragile.

Supervisor Steve Bennett continues to carry that flag and the REALTOR® community is stepping up in a most creative way. Some have formed a group of real estate professionals and leaders to raise funds for foster care families to modify homes that will allow siblings to stay together.

That fundraising event will be held on Friday, May 18 at the Poinsettia Pavilion with County elected and business leaders in attendance.

Tickets are 100 and the Non-Profit Sponsor is SPRIRT, a 501-C3 organization established to promote community care.

For more information about the dinner and the effort, contact Dallas Coulter of Stewart Title at 805.290.5342.

REALTORS® care about more than homes. We care about communities.

           

 

Kay Wilson-Bolton is the owner of CENTURY 21 Buena Vista, and can be reached at 805.340.5025. Her website is http://www.readysetkay.com

Move While Can Still Lift a Box

REALTOR® Outlook

By Kay Wilson-Bolton

July 9, 2007

“Getting old and older is not for sissies,” said someone older than wiser than most of us.  There are some life stages that need to be considered in our younger years.

Tomorrow’s seniors are in their early 50s, and they will encounter a number of lifestyles as they age. One of the best ways to prepare for the reality of senior life is to put a plan in place while you can manage it.

You can’t imagine yourself “aged” until you are, but you should and you can plan for it because you will. A good way is to look at the future and study your parents.

If they are still with you and in good health, you and they are very fortunate. If they are with you and not in good health, you know what the future can hold.

There is no substitute for planning, particularly while you are able.  There is a wonderful Biblical reference to old age and it that there will come a time when other people will lead us to places we do not want to go. So, the best remedy is to take charge and do what needs to be done, and while you can still lift a box.

It is easy to put off those things we wish not to do. That applies to getting new tires on the car or putting a new roof on the house.  To delay is often to find you waited too long.

Moving to a more suitable home to accommodate us during our later years should not be delayed indefinitely,  especially if you want to be a full participant in the process when it happens.  The process includes interviewing REALTORS®, finding that new home, getting bids from movers, and making sure things go they should—just as you always have.

If you don’t have a plan for what needs to be done once you reach “old”, others will make one for you. The hardest thing on young minds in older bodies is to feel victimized by what is likely their last move and merely observe what is going on around them.

Waiting until you can’t move your favorite box will guarantee that you will not enjoy the process of moving to the next phase of your life;  you will not be good company and you will not view this as a natural step in the process of aging.

The process will control you and those around you will feel disappointment in their role. The stress of it all will take an unfriendly toll on your health and peace of mind. Everyone will be robbed of the joy that comes from one life’s new experiences.

If the next and maybe final move is getting closer, plan now to make it while you are healthy enough to lift your box of favorite things.

 

Kay Wilson-Bolton is the owner of CENTURY 21 Buena Vista and CENTURY 21 Ability. She brings a regional perspective to local issues and holds a designation in Senior Real Estate Services.

 She can be reached at 805.340.5025. Her web address is www.readysetkay.com

 

 

It’s not a secret anymore.

REALTOR® Outlook

By Kay Wilson-Bolton

May 22, 2007

There are some who continue to tell the story that things are really not “that bad and this a good time buy.” The market may not be “that bad” for everyone, but it is “that different” for many.

If you bought your home within the last three years and now find that your new loan payment is not affordable, things are not only different, they are bad.

Losing a home to foreclosure is not a pleasant experience and for most, it is traumatic. It is attached to shame and failure. The day you realize what the future really holds is a sobering one. The events that lead to that day are usually filled with household arguments, blame, regret and fear.

The kids hear the discussions and the parents or partners feel the tension. A ringing phone changes the mood in the room because it is likely a creditor and everyone knows it.

Consider a market like Camarillo. You might be surprised to know that as of May 22, there were 522 homes for sale, not including manufactured homes. The week before there were 507; the week before that were 475.

Some are home owners who merely “want to sell if they can”. They will generally price their home at a price higher than recent sales with the idea that they will have room to negotiate with someone.

Then, there are homeowners who “must” sell and position their home very competitively.

It is time to acknowledge that the market has dramatically changed again and that it is not going to improve any time soon.

When prices started to rise about two-three years ago, lenders developed a creative set of loan programs to help marginal buyers purchase a home. Many of those loans put fragile buyers into compromised situations. REALTORS® helped sell those programs and were paid well in the process.

REALTORS® who largely represent sellers saw the offers with those financing programs; but without proof of fraud, there was nothing to do.

Let’s face it. When things around you seem fine, and everyone else is doing it, it is easy to believe that everything will remain fine.

We have learned again that little in life is predictable for very long and one thing we can all count on is change.

Today’s real market is tough. Believe it. If you are not a serious seller, you need to take your property off the market and wait for another time.

If you now owe more on your home than it is worth, do the best you can to get through this. Find an experienced REALTOR® or a knowledgeable attorney who understands what to do and will guide you. There are options.

If you still have equity and can not make the payments, be wise about your decisions. It may be that facing the consequences early is best.

Know that this will pass and you will have another chance.  I know.

We all need to learn from this. All of us need to remember it.

 

Kay Wilson-Bolton is the owner of CENTURY 21 Buena Vista and CENTURY 21 Ability. She brings a regional perspective to local issues. She can be reached at 805.340.5025. Her web address is www.readysetkay.com

 

“I Sold This Property” — Understand the Claims We Make

REALTOR® Outlook

By Kay Wilson-Bolton

February 13, 2007

Some say that REALTORS® have as many rules as ruffles have ridges. If that is true there are many good reasons; two primary ones are to protect the public and to keep our conduct  at the levels of excellence.

A common marketing practice among real estate agents and REALTORS® is the claim to have “sold” a property in order to attract new sellers and new buyers to their real estate expertise.

This topic is being covered so that the real estate community and the public know there are guidelines in making these claims and that a misrepresentation is a violation of our Code of Ethics.

Under the National Association of REALTORS®  Code of Ethics, both agents are allowed to advertise that they have “sold” the property.

Our Standard of Practice 12-7 reads as follows:  “Only REALTORS® who participated in the transaction as the listing broker or cooperating broker (selling broker) may claim to have “sold” the property.  Prior to closing, a cooperating broker may post a “sold” sign only with the consent of the listing broker.”

It is clear that only those REALTORS® who participated in a transaction may advertise or represent that they “sold” the property once escrow has closed.

However, Standard of Practice 12-7, as written, does not place a timing restriction on when a REALTOR® may advertise or represent that they “sold” the property.  Therefore, a problematic question arises on whether REALTORS® may use the term “sold” after a purchase contract has been signed and during the escrow period prior to closing.

Article 12 requires REALTORS® to present a “true picture” in their advertising and representations to the public.  Many local areas consider a property “sold” after escrow closes on the property.

Other areas consider a property “sold” after the purchase contract has been signed.  Some MLS’s even have several reporting categories (i.e. pending, pending/no contingencies, sold, etc.), which may influence how the term is used in advertisements in the area.

Therefore, depending on local practice and usage of the term, it is possible that a REALTOR® may not be presenting a “true picture” by advertising or representing to the public that he or she “sold” the property prior to the close of escrow.

In any case, determining whether an advertisement or representation using the term “sold” presents a “true picture” is ultimately done by a tribunal from the local Board’s/Association’s Professional Standards Committee.

If you, as a buyer or a seller, are influenced by the sales activity of a potential REALTOR® whom you may choose to represent you, be sure that your decision is based on facts, not just representation.

As always, if you have questions, contact an attorney with real estate experience, interview at least two REALTORS®, or call the Ventura County Coastal Association of REALTORS®. There is an experienced group of REALTORS® ready and able to answer your questions.

 

Kay Wilson-Bolton is the owner of CENTURY 21 Buena Vista and CENTURY 21 Ability. She brings a regional perspective to local issues. She can be reached at 805.340.5025. Her web address is www.readysetkay.com

New Statutory Disclosures Regarding Water Intrusion

REALTOR® Outlook

By Kay Wilson-Bolton

February 19, 2007

Countries around the world languish for lack of water, but water in the wrong places can be problematic and require special disclosure and attention.

One of the latest disclosure forms that affords homeowners the opportunity to clearly state whether or not there has been “water intrusion” or a claim for water damage.  It is called “Seller Property Questionnaire.” While it is not a statutory form, it is one of the most helpful.

This is not only an opportunity to do the right thing, it is also the only opportunity a buyer may have to do the very inspection that will save time and trouble later on.

Answering this question either way has consequences. Answering it truthfully could impact the buyer’s ability to obtain insurance. The false answer could lead to devastating circumstances down the road should mold or signs of it become apparent.

There is also no substitute for knowing the neighborhood when it comes to buying a home. In the not too distant past, it was common for real estate agents to stick close to their local spheres of influence in listing or selling homes.

Our new technology affords real estate agents the opportunity to work in any city in California, but it comes increasingly clear that an agent working too far from home can cause a disservice to his/her clients if they don’t know the neighborhood.

The Internet technology is so advanced that one could actually choose and purchase a home long distance–with one exception, and that is that the house needs to have a REALTOR® open the door.

Every city has its unique features: water sources and will-serve letters, hillsides, landfills, airports, traffic, trees and homeowners’ association characteristics, underground springs, and propensity for flooding

The subtleties of an area have become increasingly important, such as a past lawsuit involving a homeowners association, the chart for growth in and around a city, the class action suit towards a builder for faulty plumbing in a particular tract.

The local REALTOR® knows the lay of the land and where to go for information.

Likewise, if you are from a distant city and want the best representation, contact a local real estate company that displays the Blue “R” which stands for REALTOR®.

 

Kay Wilson-Bolton is the owner and broker of CENTURY 21 Buena Vista and CENTURY 21 Ability.  She brings a regional perspective to local issues.  She can be reached at 340.5025. Her website is http://www.readysetkay.com

 

 

 

 

 

 

WHEN IN COUNTEROFFER MODE, THINK, ASK, ACT

REALTOR® Outlook

By Kay Wilson-Bolton

February 6, 2007

Most REALTORS®, including me, have strong relationships with service providers and desire to include them in their transactions. Some agents will go so far as to state in the Multiple Listing Service that “seller requests a particular title and escrow company.”  The duty of REALTORS® is to guide, not direct; recommend but not control.

Agents who recommend that sellers counteroffer the name of the title company run the risk of losing the buyer, and they put sellers in a position of violating the law.

Sellers need to be aware of the law regarding this single element of a purchase agreement and need to be properly guided by their agent.

The question is, “Can the seller of a residential one-to-four unit property require the buyer to use the seller’s choice of a title insurer?”

This answer is probably not, according to RESPA and its regulations.  For some detail, the Real Estate Settlement procedures Act (RESPA), 12 USC § 2608, contains the following restrictive language:

(a) No seller of property that will be purchased with the assistance of a federally related mortgage loan shall require directly or indirectly, as a condition to selling the property that title insurance covering the property be purchased by the buyer from any particular title company.

(b) Any seller who violates the provisions of subsection (a) shall be liable to the buyer in an amount equal to three times all charges made for such title insurance.

The phrase “federally related mortgage loan” is defined as a first deed of trust on residential property containing one to four units (including mobile homes, condominiums, and co-ops) and (1) made by a lending institution which is insured by SAIF (Savings Association Insurance Funds, formerly FSLIC), FDIC, including both banks and savings and loans, or regulated by OTS (Office of Thrift Supervision, formerly FHLBB), or any other agency of the federal government; or (2) the loan is insured or guaranteed by FHA or VA or intended to be sold to FNMA, GNMA or FHLMC; or (3) is a loan made by a private creditor who makes more than $1 million in residential real estate loans in a calendar year.

Therefore, a “federally related mortgage loan” essentially means all transactions for residential one-to-four units except where the buyer is paying cash or dealing with a private lender who doesn’t usually make loans.

This prohibition is for title insurance only and does not refer to any other services provided by the title insurer (i.e., escrow services).

So, to sellers, if your agent suggests that you make a counteroffer changing the provider of title insurance, ask why. There could be a good reason.

Then, ask your agent for assurance that this act will not jeopardize reaching agreement with the buyer or put you in a position of violating the law.

Kay Wilson-Bolton is the owner of CENTURY 21 Buena Vista and CENTURY 21 Ability and brings a regional perspective to local issues. She can be reached at 805.340.5025. Her web address is http://www.readysetkay.com