Author: ft Editorial Staff

Form 310 – Seller’s net sheet

This article reviews the listing agent’s use of a checklist to prepare an estimate and disclose the expenses a seller will likely incur to fix up the property for marketing, provide reports to prospective buyers and close a sale. A full copy of the form is available form-310.pdf so you can follow along with the instructions. Financial consequences of a sale Probably the most pressing concern sellers of real estate have about selling is the amount of money they will receive for their property on a sale since what sellers receive on closing is not the full amount of the purchase price, although the amount they will receive is a calculable part of the price. While a seller may not straight out ask the listing agent what amount escrow will hand him in exchange for conveying his property to a buyer, the serious nature of the unspoken concern the seller has about the amount of money he will carry away from the closing is implicit. Sellers always want to know the amount of money they will actually receive as net sales proceeds for transferring ownership. The sole reason for employing an agent is to convert the seller’s equity into cash by selling the property at the highest possible price. Significantly, a seller on listing his property for sale has a motive which drives his decision to acquire cash, if...

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Home Mortgage Disclosure Act

This article discusses the prevention of lender discrimination under federal law. Lenders release home loan data The federal Home Mortgage Disclosure Act (HMDA) seeks to prevent lending discrimination and unlawful redlining practices on residential loans or home improvement loans by requiring lenders to disclose home loan origination information to the public. [Department of Housing and Urban Development Mortgagee Letter 94-22] State and federally regulated banks, and persons engaged in the business of making home loans for profit, are required by the HMDA to compile home loan origination data for submission to their respective supervisory agencies. [12 United States Code §§2802; 2803; Calif. Health and Safety Code §35816] Completed loan applications and loan originations to finance the purchase, construction, improvement of the loan applicant’s home or to refinance an existing home loan are considered home loan originations. [12 USC §2803(a)] Federal disclosure requirements For lenders with total assets of more than $28 million and for-profit mortgage lenders with total assets of more than $10 million, the lender is required to compile data and make it available to the public. The data will include: the type and purpose of the loan; the owner-occupancy status of the real estate securing the loan; the amount of the loan; the action taken by the lender on the application; the sex and race or national origin of the loan applicant; and the income of the...

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The home inspection report

This article introduces the seller’s and listing agent’s use of a home inspection report to document the present physical condition of the listed property for prospective buyers. Transparency by design A seller of a one-to-four unit residential property, on entering into a listing to sell the property, is asked to give the listing agent authority to order out a home inspection report (HIR) from a local home inspection company as part of the seller’s cost to market the property for sale. The listing agent explains the HIR will be used to complete the seller’s Condition of Property (Transfer) Disclosure Statement (TDS). The report will then be attached to the seller’s TDS to more fully inform prospective buyers about the actual condition of the property. On receipt of the report, the seller could act to eliminate some or all of the deficiencies noted in the home inspection report. On the elimination of any defects, an updated report should be ordered out for use with the TDS. The seller’s TDS, as reviewed by the listing agent and supplemented with the HIR, will be used to inform prospective buyers about the precise condition of the property before they make an offer to purchase. Thus, the seller will not be confronted later with demands to correct defects or to adjust the sales price in order to close escrow. The property will have been...

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Accepting partial payments after default

This article explains the lender’s foreclosure rights on receipt of a partial payment on a note in default. The lender can continue to foreclose The owner of real estate, which is subject to a trust deed lien, loses his major source of income. As a result, the owner is unable to make his loan payments. Negotiations with the lender to restructure the payment schedule in a pre-foreclosure workout are futile. The lender records a Notice of Default (NOD). On receipt of the NOD, the owner tenders some of the delinquent payments referenced in the NOD, but does not submit all delinquent installments and charges required to reinstate the loan. The lender accepts the partial payments, and immediately sends the owner a letter notifying him the loan remains in default and in foreclosure. The letter states the additional amount which must be paid to cure the default, and informs the owner the lender intends to continue with the foreclosure unless the loan is brought current. Ultimately a trustee’s sale is set by recording a Notice of Trustee’s Sale (NOTS). The owner challenges the NOTS, claiming the notice of the foreclosure sale is invalid since the lender waived its right to complete the foreclosure by accepting partial loan payments after recording the NOD. The lender claims the foreclosure should be allowed to continue to sale since the owner paid only part...

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Form 102 – The seller’s listing agreement

This article takes a look at the seller’s listing agreement. A full copy of the form is available here so you can follow along with the instructions.   When the fee is earned A broker’s right to a fee for representing his client originates with a written employment agreement, commonly called a listing, entered into by the client who employs the broker. [Crane v. McCormick (1891) 92 C 176] By entering into an exclusive right-to-sell listing agreement, an owner of real estate employs a broker to locate a buyer for his property. The right-to-sell listing agreement grants the broker sole authority to market the property, locate a buyer and negotiate a sale. It also specifies the fee amount the seller agrees the broker is to receive and the conditions which must be met by the broker or acted on by the seller for the broker to earn the fee. For example, an exclusive right-to-sell listing entitles a broker to a fee from a seller in several instances, including when: the broker locates a ready, willing and able buyer and submits the buyer’s full listing offer to the seller [See Form 102 §3.1(a) accompanying this article]; the seller accepts an offer submitted by the broker [See Form 102 §3.1(a)]; anyone purchases the property during the listing period under the exclusive right-to-sell agreement [See Form 102 §3.1(a)]; the seller withdraws the...

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[M]ost people join CAR in order to obtain the forms, not for the other services. And if there were any viable choices for agents, CAR would immediately suffer as much as a 40% to 50% loss in membership. […] CAR owns the “for profit” company that produces their software, with top officers in CAR sitting in top management spots in ZipLogix. This is the living, breathing definition of a conflict of interest. […] On their website they parade their forms software as “free” when cost of their forms software for non-members as a percentage of their actual membership cost speaks for itself.

- William Tormey, on CAR is "dangerously close" to having a monopoly on real estate forms, counters PDFfiller

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