Author: ft Editorial Staff

The Olympics

According to the International Olympic Committee, the first Ancient Olympic Games were held in 776 BC on the plains of Olympia in honor of the Greek gods. Held every four years until 393 AD when Emperor Theodosius banned the Games as being a “pagan” event, the Ancient Olympic Games were to the Greeks what Mecca is to the Muslims. From across the (often warring) Greek city-states, some 40,000 athletes, spectators, artisans and pilgrims would journey every four years to the southwestern end of Greece, some 200 miles from Athens, to take part in the glory and festivities of the Games and to revel in their common Hellenic heritage. This pilgrimage was possible due to the tradition of ekecheiria or “sacred truce.” Imposed prior to the opening day of each Olympiad, the sacred truce allowed everyone to travel in total safety to and from the Games. Surrounded by the blue mountains of Arcadia and numerous religious temples and shrines, including the spectacular Temple of Zeus (one of the Seven Wonders of the Ancient World) which featured the 40-foot tall gold and ivory statue of Zeus created by the famous Greek sculptor Phidias, the attendees could participate in various pagan religious rites, public feasts, drinking parties and beauty contests, or visit temples, sideshow booths, palm readers and prostitutes. Eat, drink and be merry indeed. Oh, and there were the sporting events...

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Working the AITD

This article discusses the advantages of a carryback all-inclusive note and trust deed (AITD), the forms to be used and the terms to be negotiated. Flexible carryback financing As a debt instrument and security device for the credit sale of encumbered real estate, the all-inclusive note and trust deed (AITD) provides brokers and buyers with the flexibility needed to finance the balance of the sales price remaining unpaid after a down payment. For a buyer, the AITD is all the financing needed to acquire encumbered real estate with a down payment. The principal amount of the AITD includes both the seller’s unpaid equity in the property and the unpaid balance on the existing loan which will remain of record, called the wrapped loan or underlying loan. The buyer makes monthly AITD payments to the seller. The seller, in turn, makes payments to the underlying lender. The advantages of an AITD over a standard second trust deed are mainly for the seller. However, the buyer, seller and lender all benefit since the buyer does not assume the wrapped loan. For the seller, the benefits of an AITD include: a greater yield than could be negotiated on a standard second trust deed note, a financial advantage due to the AITD note’s overriding interest rate feature; a reduced risk of loss due to a default on the underlying loan since the seller...

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Property related disclosures

This article reviews a broker’s use of unverified information when marketing real estate. Sold “as-is” is a prohibited disclaimer – sell property “as-disclosed” A broker and his sales agents must disclose the physical nature and condition of a property when soliciting an offer to purchase. Brokers and agents have a duty to timely disclose to all parties involved in a real estate transaction any significant physical aspects of a property that may affect the property’s market value. To comply with this duty, the listing broker (or seller) of a one-to-four unit residence must provide the buyer with a Transfer Disclosure Statement (TDS) prior to making an offer and disclose all defects then known to the broker or the seller. [Calif. Civil Code §§1102 et seq; See first tuesday Form 304 accompanying this article] To be effective, property disclosures must be made to the buyer before offers are prepared and prices agreed to. If not, the buyer may: Cancel on discovery of the broker’s failure to previously disclose the property’s condition. OR Close escrow and seek recovery of the costs to cure the belatedly disclosed and previously known defects, unless a contingency exists in the purchase agreement for further approval of the property’s condition. Any attempt to have the buyer waive his right to the mandated property disclosure statement is unenforceable. Failure to disclose property conditions is against public policy....

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Fireworks safety

first tuesday wishes you a fun and safe 4th of July holiday, and as a reminder, the state of California permits only “safe and sane” fireworks. Safe and sane fireworks are those inspected and approved by the State Fire Marshal and not defined as dangerous and exempt. [Calif. Health and Safety Code §§12529; 12562] Prohibited fireworks include: skyrockets, rockets, roman candles, chasers, sparklers over 10″ long or 1/4″ in diameter, torpedoes, friction fireworks, surprise fireworks, and any fireworks containing arsenic, boron, gallates or gallic acid, chlorates, magnesium, mercury salts, titanium, picrates or picric acid, thiocyanates, phosphorus, zirconium, or gunpowder. [Health & S C §12505] Fireworks safety laws are also enforced to different degrees on the city and/or county level, so please contact your local fire department to check on the legal status and use requirements of specific fireworks. For more information on fireworks, please visit the following websites: www.fireworks-safety.com – checks the legal status of fireworks in your California county and also offers a fire safety kids’ page; www.fireworksafety.com – provides safety tips for selecting and displaying fireworks; and osfm.fire.ca.gov/fireworks.html – the official site of the California State Fire Marshal, including a handbook on safe and sane...

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A delay in the §1031 transaction

This article lays out the time limitations and related restrictions in a delayed exchange for the identification and acquisition of replacement property. Identification and acquisition periods An investor opens an escrow for the sale of his investment property. The property sold is either a rental property or land held for profit on eventual resale. The investor will not purchase replacement property with his net proceeds on the close of his sales escrow. However, he does expect to avoid profit reporting under §1031 by ultimately purchasing replacement property with the net proceeds. Since the replacement property will be purchased later, the investor is involved in a delayed §1031 transaction, called a deferred exchange by the IRS. However, instead of actually exchanging properties, he is selling one property now and buying another later in two mutually exclusive cash transactions. The buyer of the property being sold agrees to cooperate in a §1031 exchange under a provision in the purchase agreement. [See first tuesday Form 150 §11.10] Prior to closing the sales escrow, escrow is instructed by the investor to deposit the investor’s net sales proceeds into a §1031 trust to be managed by a trustee, also called an accommodator or facilitator. The investor’s closing statement on the sale will indicate the investor received Exchange Valuation Credits (EVCs) for his net equity, in lieu of the cash sales proceeds originally agreed to...

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