Real Estate Pre-License Study Video: Understanding the Escrow Process

Questions and answers about a real estate escrow

By Jeff Sorg, OnlineEd Blog

(August 27, 2019)

(PORTLAND, Ore.) OnlineEd – What is escrow? Why is escrow important for real estate transactions? Who opens the escrow? When is escrow closed? Find out the answers to these and other questions by watching this informative study video designed to be used with our Real Estate Pre-License course.

 

Video (C) Copyright; OnlineEd 2019. All Rights Reserved.

No right to reproduce in whole or in part is given.

 

 

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OnlineEd blog postings are the opinion of the author and not intended as legal or other professional advice. Be sure to consult the appropriate party when professional advice is needed.

Excerpts from articles not originating with Jeff Sorg/OnlineEd are reprinted with permission; remain the sole property of the author; no permission to reprint is given or implied.

For more information about OnlineEd and their education for real estate brokers, principal brokers, property managers, and mortgage brokers visit www.OnlineEd.com.

Information contained in this posting is deemed correct as of the date of publication, but is not guaranteed by the author and may have been obtained from third-party sources. Due to the fluid nature of the subject matter, regulations, requirements and laws, prices and all other information may or may not be correct in the future and should be verified if cited, shared or otherwise republished.

OnlineEd® is a registered Trademark

FHA Issues Rule to Include Approval of Individual Units in Non-Approved Condo Projects

FHA responds to the market

By Jeff Sorg, OnlineEd Blog

(August 22, 2019)

To promote homeownership, especially among credit-worthy first-time buyers, the Federal Housing Administration (FHA) published its long-awaited final regulation, and policy implementation guidance, which establish a new condominium approval process. That provides for comprehensive revision to FHA condominium project approval policy. The new policy will allow specific individual condominium units to be eligible for FHA mortgage insurance even if the condominium project is not FHA approved. The polices become effective on October 15, 2019.

FHA’s new rule introduces a new single-unit approval process to make it easier for individual condominium units to be eligible for FHA-insured financing; extends the recertification requirement for approved condominium projects from two to three years; allows more mixed-use projects to be eligible for FHA insurance.

“Condominiums have increasingly become a source of affordable, sustainable homeownership for many families and it’s critical that FHA be there to help them,” said U.S. Housing and Urban Development Secretary Ben Carson. “Today, we take an important step to open more doors to homeownership for younger, first-time American buyers as well as seniors hoping to age-in-place.”

HUD Acting Deputy Secretary and FHA Commissioner Brian Montgomery added, “Today we are making certain FHA responds to what the market is telling us. This new rule allows FHA to meet its core mission to support eligible borrowers who are ready for homeownership and are most likely to enter the market with the purchase of a condominium.”

The vast majority (84 percent) of FHA-insured condo buyers have never owned a home before. While there are more than 150,000 condominium projects in the U.S., only 6.5 percent are approved to participate in FHA’s mortgage insurance programs.  As a result of FHA’s new policy, it is estimated that 20,000 to 60,000 condominium units could become eligible for FHA-insured financing annually.

Read FHA’s new condominium approval regulation.

 

 

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OnlineEd blog postings are the opinion of the author and not intended as legal or other professional advice. Be sure to consult the appropriate party when professional advice is needed.

Excerpts from articles not originating with Jeff Sorg/OnlineEd are reprinted with permission; remain the sole property of the author; no permission to reprint is given or implied.

For more information about OnlineEd and their education for real estate brokers, principal brokers, property managers, and mortgage brokers visit www.OnlineEd.com.

Information contained in this posting is deemed correct as of the date of publication, but is not guaranteed by the author and may have been obtained from third-party sources. Due to the fluid nature of the subject matter, regulations, requirements and laws, prices and all other information may or may not be correct in the future and should be verified if cited, shared or otherwise republished.

OnlineEd® is a registered Trademark

Home Value Appreciation Has Slowed Each Month This Year

Annual home value appreciation decreased for the seventh straight month in July

By Jeff Sorg, OnlineEd Blog

(August 16, 2019)

SEATTLE, Aug. 16, 2019 /PRNewswire/ — U.S. home value growth continues to slow, according to the July Zillow® Real Estate Market Reporti. The typical U.S. home is worth $229,000, up 5.2% from a year ago – this is the smallest annual appreciation since October 2015. Last year at this time, home values rose 7.7% year-over-year. Still, home values are up 0.3% month-over-month, an indication that values are stabilizing after a period of relatively extreme growth rather than headed for a sustained downturn.

Among the 50 largest U.S. markets, home values have grown the most in Salt Lake City (up 9.4% since July 2018), Indianapolis (up 8.1%) and Charlotte (up 7.3%), although growth is slowing in each of these metros. Only New Orleans, Birmingham and Oklahoma City saw home values appreciate at a greater rate than a year ago.

Home values have fallen year-over-year in California’s San Francisco Bay Area, home to the two most expensive markets in the country. The value of the typical home fell 10.5% in San Jose and 1.1% in San Francisco. A year ago, home values were growing 24% annually in San Jose, a 34.5 percentage point difference.

“As talk builds of a potential recession in the next year or two, housing remains fairly stalwart,” said Zillow Director of Economic Research Skylar Olsen. “The slowing appreciation is ultimately a good sign that the market is adjusting in response to the growing unaffordability of down payments, while low mortgage rates are keeping those with the required savings interested despite softer growth out the gate. The uptick in the rate of homes coming onto the market – a good and true increase in supply – should be a boon to those inventory-starved home buyers still searching near the close of home shopping season. While buyers are catching a break, renters have seen prices continue their steady upward climb, presenting yet another obstacle in the quest to save for that down payment.”

The median U.S. rent rose 1.9% year-over-year to $1,592ii. For the eighth consecutive month, rents rose the most in Phoenix (up 6.1% from a year ago), followed by Las Vegas (up 5.9%). Rents fell in only three of the 50 largest markets – Houston, Buffalo and Baltimore.

Inventory grew 1.3% annually, reversing four straight months of declines. There are 19,978 more homes for sale than this time last year. New listings drove the inventory growth in July, up 5.7% from a year ago.

Mortgage rates listed on Zillow fell lower in July. Rates ended the month at 3.72%, down 23 basis points from July 1. Zillow’s real-time mortgage rates are based on thousands of custom mortgage quotes submitted daily to anonymous borrowers on the Zillow Mortgages site and reflect the most recent changes in the market.

Metropolitan Area Zillow Home Value Index, July 2019 ZHVI Year-over-Year Change, July 2019 ZHVI Year-over-Year Change, July 2018 Zillow Rent Index, July 2019 ZRI Year-over-Year Change, July 2019 Inventory Year-over-Year Change, July 2019
United States $229,000 5.2% 7.7% $1,592 1.9% 1.3%
New York, NY $442,800 3.2% 5.5% $2,279 2.3% 4.8%
Los Angeles-Long Beach-Anaheim, CA $650,600 0.9% 6.3% $2,599 1.3% 11.3%
Chicago, IL $225,200 2.1% 5.3% $1,615 1.3% 6.9%
Dallas-Fort Worth, TX $243,500 5.1% 11.8% $1,439 1.5% 12.3%
Philadelphia, PA $233,300 2.1% 5.3% $1,497 2.5% -4.8%
Houston, TX $206,400 3.4% 6.1% $1,378 -0.5% 5.5%
Washington, DC $407,700 2.1% 3.8% $1,971 2.0% -8.8%
Miami-Fort Lauderdale, FL $284,300 3.2% 8.2% $1,851 2.2% 3.8%
Atlanta, GA $220,300 6.9% 11.8% $1,454 4.1% 8.3%
Boston, MA $463,300 1.9% 6.2% $2,416 2.2% 8.4%
San Francisco, CA $938,100 -1.1% 9.4% $3,166 1.2% 21.5%
Detroit, MI $162,900 4.6% 9.4% $1,211 2.3% 17.4%
Riverside, CA $371,500 3.3% 7.3% $1,907 4.3% -1.6%
Phoenix, AZ $267,500 4.5% 7.7% $1,401 6.1% -2.9%
Seattle, WA $489,500 0.5% 8.7% $2,036 2.4% 14.3%
Minneapolis-St Paul, MN $272,000 4.3% 6.6% $1,494 0.6% 4.9%
San Diego, CA $591,500 1.1% 6.1% $2,519 3.1% 6.0%
St. Louis, MO $167,700 3.5% 5.5% $1,009 1.3% -15.0%
Tampa, FL $216,400 5.0% 10.6% $1,392 3.7% 2.8%
Baltimore, MD $267,100 0.7% 4.9% $1,605 -0.1% -4.0%
Denver, CO $409,200 3.0% 6.7% $1,781 1.5% 26.9%
Pittsburgh, PA $144,700 2.5% 7.3% $1,102 1.8% -15.0%
Portland, OR $396,700 1.5% 5.3% $1,647 0.7% 3.1%
Charlotte, NC $210,600 7.3% 10.2% $1,322 3.5% 6.2%
Sacramento, CA $411,300 2.7% 5.4% $1,788 3.5% 0.8%
San Antonio, TX $195,600 5.0% 5.7% $1,215 0.3% 17.9%
Orlando, FL $240,000 5.1% 9.4% $1,414 3.5% 4.5%
Cincinnati, OH $170,400 5.4% 6.3% $1,145 3.2% -8.3%
Cleveland, OH $147,100 4.2% 6.6% $1,071 4.1% -1.3%
Kansas City, MO $191,900 4.7% 9.5% $1,121 1.0% N/A
Las Vegas, NV $279,100 5.1% 13.6% $1,329 5.9% 53.5%
Columbus, OH $193,800 6.5% 7.9% $1,183 0.6% -3.3%
Indianapolis, IN $167,300 8.1% 9.6% $1,100 1.0% N/A
San Jose, CA $1,144,800 -10.5% 24.0% $3,338 0.5% 32.6%
Austin, TX $312,300 4.7% 6.2% $1,586 2.1% -4.9%
Virginia Beach, VA $229,800 1.5% 2.8% $1,335 1.1% -9.6%
Nashville, TN $255,700 4.0% 9.8% $1,445 1.3% 14.6%
Providence, RI $295,100 3.4% 7.3% $1,427 3.2% -3.7%
Milwaukee, WI $232,500 4.5% 5.2% $1,094 2.5% 15.3%
Jacksonville, FL $214,400 5.5% 10.5% $1,348 3.9% -2.1%
Memphis, TN $141,000 5.1% 8.3% $1,047 4.2% -10.6%
Oklahoma City, OK $148,400 4.0% 2.9% $937 1.8% -11.5%
Louisville-Jefferson County, KY $164,400 5.5% 5.7% $1,087 1.4% -1.2%
Hartford, CT $229,100 0.2% 2.5% $1,334 1.1% -4.4%
Richmond, VA $232,000 4.0% 5.3% $1,323 1.3% N/A
New Orleans, LA $176,000 2.7% 0.0% $1,274 0.5% 0.4%
Buffalo, NY $161,400 4.4% 6.7% $1,015 -0.3% -1.2%
Raleigh, NC $269,100 5.2% 5.6% $1,286 1.0% 0.6%
Birmingham, AL $148,700 6.9% 5.5% $1,058 2.3% -5.9%
Salt Lake City, UT $373,200 9.4% 11.3% $1,494 1.7% 20.3%

 

[Source: Zillow press release]

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OnlineEd blog postings are the opinion of the author and not intended as legal or other professional advice. Be sure to consult the appropriate party when professional advice is needed.

Excerpts from articles not originating with Jeff Sorg/OnlineEd are reprinted with permission; remain the sole property of the author; no permission to reprint is given or implied.

For more information about OnlineEd and their education for real estate brokers, principal brokers, property managers, and mortgage brokers visit www.OnlineEd.com.

Information contained in this posting is deemed correct as of the date of publication, but is not guaranteed by the author and may have been obtained from third-party sources. Due to the fluid nature of the subject matter, regulations, requirements and laws, prices and all other information may or may not be correct in the future and should be verified if cited, shared or otherwise republished.

OnlineEd® is a registered Trademark

Why Oregon Realtors® Have No Business Being Involved in FIRPTA

” . . . this should be in the form of a joint seller/buyer instruction to escrow; let them do the job they are paid to do.”

By Jeff Sorg, OnlineEd Blog

(August 14, 2019)

(PORTLAND, Ore.) Jeff Sorg – The disposition of a U.S. real property interest by a foreign person is subject to the Foreign Investment in Real Property Tax Act of 1980 (FIRPTA) income tax withholding. FIRPTA authorized the United States to tax foreign persons on dispositions of U.S. real property interests.

In most cases, the buyer is the withholding agent. This means the buyer must find out if the seller is a foreign person. If a seller is a foreign person and the buyer fails to withhold, the buyer may be held liable for the tax. Additionally, according to an article from CRES Insurance, if the broker involved knows the seller’s citizenship or residency status or knows the seller misrepresented their status and fails to disclose it, offers to investigate the seller’s status and fails to discover the truth, or fails to advise the buyer of the withholding obligation, then the broker can face liability.

So, what’s the broker to do? Here’s how Phil Querin, Querin Law, LLC, answers this question in his article, Why Oregon Realtors® Should Get Out Of The FIRPTA Business, recently published in Managing Broker Monthly: “Oregon Realtors® have no business doing something escrow should be doing when a real estate transaction is first opened: Immediately get the Certificate of Non-Foreign Status signed by the seller. And at the time of closing, it [escrow] should provide a declaration to the buyer that it is holding that document and will do so for the required period of time. How difficult is that? Realtors® should not want their fingerprints on the Certificate. And to be absolutely safe, this should be in the form of a joint seller/buyer instruction to escrow; let them do the job they are paid to do.”

Querin goes on to say, “In short, Oregon title/escrow companies are the obvious entities to serve as Qualified Substitutes. And if truth be told, many – if not all of them – have required sellers to sign a Certificate for every transaction they close, regardless of whether they are “foreign persons”. What they haven’t been doing, at least until now, is “formally” acting as the Qualified Substitute, and providing every buyer with a declaration that they are holding the seller’s Certificate and will do so for the next five years.” [Read Querin’s entire article]

A withholding obligation is generally imposed on the buyer or other transferees (withholding agent) when a U.S. real property interest is acquired from a foreign person. The withholding obligation also applies to foreign and domestic corporations, qualified investment entities, and the fiduciary of certain trusts and estates. To avoid liability, real estate brokers should not offer to investigate the seller’s status and should always be sure to advise their clients of this withholding obligation.  Finally, the brokers involved should make sure the escrow company handling their transactions agrees to act as a Qualified Substitute and to keep all necessary records for the required period. In your selected escrow company won’t act as a Qualified Substitute, then find another escrow company.

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OnlineEd blog postings are the opinion of the author and not intended as legal or other professional advice. Be sure to consult the appropriate party when professional advice is needed.

Excerpts from articles not originating with Jeff Sorg are reprinted with permission; remain the sole property of the author; no permission to reprint is given or implied.

For more information about OnlineEd and their education for real estate brokers, principal brokers, property managers, and mortgage brokers visit www.OnlineEd.com.

Information contained in this posting is deemed correct as of the date of publication, but is not guaranteed by the author and may have been obtained from third-party sources. Due to the fluid nature of the subject matter, regulations, requirements and laws, prices and all other information may or may not be correct in the future and should be verified if cited, shared or otherwise republished.

OnlineEd® is a registered Trademark

Categories: Real Estate

Report for Residential Construction Activity in June 2019

Building permits, housing starts, and housing completions report

By Jeff Sorg, OnlineEd Blog

(July 17, 2019)

(Wahington) US Dept. of HUD (c) Can Stock Photo– The U.S. Department of Housing and Urban Development (HUD) and the U.S. Census Bureau jointly announced the following new residential construction statistics for June 2019.

Building Permits

Privately-owned housing units authorized by building permits in June were at a seasonally adjusted annual rate of 1,220,000. This is 6.1 percent (±1.2 percent) below the revised May rate of 1,299,000 and is 6.6 percent (±1.1 percent) below the June 2018 rate of 1,306,000. Single‐family authorizations in June were at a rate of 813,000; this is 0.4 percent (±1.0 percent)* above the revised May figure of 810,000. Authorizations of units in buildings with five units or more were at a rate of 360,000 in June.

Housing Starts

Privately-owned housing starts in June were at a seasonally adjusted annual rate of 1,253,000. This is 0.9 percent (±7.9 percent)* below the revised May estimate of 1,265,000, but is 6.2 percent (±7.8 percent)* above the June 2018 rate of 1,180,000. Single‐family housing starts in June were at a rate of 847,000; this is 3.5 percent (±9.6 percent)* above the revised May figure of 818,000. The June rate for units in buildings with five units or more was 396,000.

Housing Completions

Privately‐owned housing completions in June were at a seasonally adjusted annual rate of 1,161,000. This is 4.8 percent (±12.8 percent)* below the revised May estimate of 1,220,000 and is 3.7 percent (±10.5 percent)* below the June 2018 rate of 1,205,000. Single‐family housing completions in June were at a rate of 870,000; this is 1.8 percent (±11.5 percent)* below the revised May rate of 886,000. The June rate for units in buildings with five units or more was 283,000.

 

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OnlineEd blog postings are the opinion of the author and not intended as legal or other professional advice. Be sure to consult the appropriate party when professional advice is needed.

For more information about OnlineEd and their education for real estate brokers, principal brokers, property managers, and mortgage brokers visit www.OnlineEd.com.

All information contained in this posting is deemed correct as of the date of publication, but is not guaranteed by the author and may have been obtained from third-party sources. Due to the fluid nature of the subject matter, regulations, requirements and laws, prices and all other information may or may not be correct in the future and should be verified if cited, shared or otherwise republished.

OnlineEd® is a registered Trademark

Starting Today, Portland Home Sellers Can Request a Cash Offer From Zillow

Zillow Now Buying and Selling Homes in Portland

By Jeff Sorg, OnlineEd Blog

(July 15, 2019)

(PORTLAND, Ore.) July 15, 2019 /PRNewswire/ — Starting today, home sellers in the Portland, Oregon metro — including Vancouver, Wash. — can use Zillow Offers to request a cash offer from Zillow to buy their home.

Portland is the twelfth market where Zillow now directly buys homes – giving homeowners a new way to sell their homes that is convenient, transparent and gives them more control over the entire real estate transaction.

“Sellers across the country have shown that they are looking for an easier, less stressful way to sell their home,” said Zillow Brand President Jeremy Wacksman. “We’re excited to launch our first market in the Pacific Northwest today, giving potential home sellers in Portland and Vancouver the certainty and transparency they want when selling their home. Zillow Offers provides a seamless transaction experience, helping sellers move on to the next step in their life.”

Selling a home is one of the most stressful experiences in modern life, second only to a relationship break-up1. Decluttering and readying their home for tours and open houses are often the most frustrating tasks for sellers, according to Zillow research. In fact, according to a recent Zillow survey, more than a third of home sellers said the process left them in tears, with millennials and parents far more likely to cry at some point during the sale process.

Zillow Offers is transforming the way people sell their homes across the country. With Zillow Offers, sellers don’t need to worry about prepping their home for sale or hosting open houses — avoiding much of the hassle and time and energy associated with a traditional sale.

Designed to accommodate all types of sellers, Zillow Offers can work for anyone, whether they need to close quickly for a job move across the country or they want to close on a longer timeline to search for their dream home. Zillow Offers gives sellers the flexibility to choose their close date within just a few days or up to 90 days after accepting their offer.

Additionally, consumers using Zillow Offers – whether they are selling to or buying from Zillow – can experience an even simpler real estate transaction if they decide to get financing from Zillow’s affiliate lender, Zillow Home Loans to purchase their next home. Homeowners using Zillow Offers to sell their home can apply to get pre-approved for a mortgage through Zillow Home Loans, giving them the certainty to be able to sell their existing home and shop for a new home simultaneously.

Buyers who purchase a Zillow-owned home have the confidence of moving into a home that’s been professionally renovated, refreshed and is move-in ready.

Zillow Offers first launched in Phoenix last April and is currently available for home sellers in Las Vegas, Atlanta, Denver, Charlotte, Raleigh, Houston, Riverside, Dallas, Minneapolis and Orlando. Zillow also has plans to launch in Austin, Los Angeles, Miami, Nashville, Sacramento, San Antonio, San Diego and Tampa, by the end of the first quarter of 2020, bringing the total number of planned Zillow Offers markets to at least 20.

In each market where Zillow Offers is currently available, Zillow works with local agents and brokers on every transaction. Zillow pays a commission to local real estate agents when it buys and sells a home, and agents remain at the center of every Zillow Offers transaction. A local Portland broker will represent Zillow in each transaction.

The Zillow Offers program also provides local brokerages and Premier Agents the opportunity to acquire new for-sale listings by connecting them with motivated sellers who have taken a direct action to sell their home. Sellers who request a Zillow Offer, but decide to instead sell their house traditionally with an agent or do not receive a Zillow Offer, may be connected with a local brokerage or Zillow Premier Agent to support their needs.

As of May, more than 100,000 homeowners across the country have requested a no-obligation cash offer from Zillow to buy their home – equal to a request for an offer every two minutes.

[Source: Zillow press release]

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Zillow and Zillow Offers are registered trademarks of Zillow, Inc.

OnlineEd blog postings are the opinion of the author and not intended as legal or other professional advice. Be sure to consult the appropriate party when professional advice is needed.

For more information about OnlineEd and their education for real estate brokers, principal brokers, property managers, and mortgage brokers visit www.OnlineEd.com.

All information contained in this posting is deemed correct as of the date of publication, but is not guaranteed by the author and may have been obtained from third-party sources. Due to the fluid nature of the subject matter, regulations, requirements and laws, prices and all other information may or may not be correct in the future and should be verified if cited, shared or otherwise republished.

OnlineEd® is a registered Trademark

Oregon Real Estate Transaction Law for Domestic Well Water Testing

“The seller of the real estate shall, upon accepting an offer to purchase that real estate, have the well tested.”

By Jeff Sorg, OnlineEd Blog

(June 28, 2019)

(PORTLAND, Ore.) OnlineEd – Oregon requires testing of domestic well water during a real estate transaction. This requirement is often referred to as the Real Estate Transaction Law or RET. The law says:

“In any transaction for the sale or exchange of real estate that includes a well that supplies groundwater for domestic purposes, the seller of the real estate shall, upon accepting an offer to purchase that real estate, have the well tested for arsenic, nitrates and total coliform bacteria. The Oregon Health Authority also may, by rule, require additional tests for specific contaminants in specific areas of public health concern.  The seller shall submit the results of the tests required under this section to the authority and to the buyer within 90 days of receiving the results of the tests.”

In Oregon, the seller is responsible for testing domestic well water but can designate their attorney, real estate broker, the laboratory person conducting the water testing, or a private party to assist them with water testing and reporting requirements. The seller must notify the potential buyer of the testing results within 90 days. While the lab tests required cannot be waived even if the buyer agrees not to have the well tested, if the seller fails to comply with the rule, then this does not invalidate any of the documents needed to complete the sale of the real estate.

Samples must be drawn from the source before any form of water treatment and may be collected after treatment injection points where water treatment has been bypassed or disabled. Registered Sanitarians, certified water system operators, well drillers, pump installers, and lab technicians are qualified to collect samples for testing by accredited laboratories. Only laboratories accredited by the Oregon Environmental Laboratory Accreditation Program can conduct water tests.

If the well is not on the property being sold, but the seller is selling an interest to a well on adjacent property, including an easement, that interest would be considered part of the real property. Capped domestic wells on unimproved lots are NOT required to be tested, but wells that are dug, drilled or driven and supply groundwater for domestic purposes must be tested.

For more information on domestic well safety and sample collection, visit the Oregon Health Authority, Oregon Drinking Water Services.

Oregon rules for testing domestic wells are found in OAR 333-015-0305 through 333-015-0335.

 

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OnlineEd blog postings are the opinion of the author and not intended as legal or other professional advice. Be sure to consult the appropriate party when professional advice is needed.

For more information about OnlineEd and their education for real estate brokers, principal brokers, property managers, and mortgage brokers visit www.OnlineEd.com.

All information contained in this posting is deemed correct as of the date of publication, but is not guaranteed by the author and may have been obtained from third-party sources. Due to the fluid nature of the subject matter, regulations, requirements and laws, prices and all other information may or may not be correct in the future and should be verified if cited, shared or otherwise republished.

OnlineEd® is a registered Trademark

Risk Anticipation Practices for the Real Estate Broker

It is essential for the broker to develop strategies to recognize and avoid problems that might occur instead of dealing with them after they occur.

By Jeff Sorg, OnlineEd Blog

(June 27, 2019)

(PORTLAND, Ore.) OnlineEd – Risk anticipation for the real estate broker relies on the ability to identify problems that might eventually happen with a client or transaction. It’s essential for the broker to establish some strategies early on in their career to help recognize and avoid problems that might occur, instead of trying to deal with them after they occur.

Some examples of risk anticipation and strategies to prevent risk are:

  • documentation and recordkeeping;
  • disclosures;
  • disclaimers; and
  • documentation of information provided to and from the client.

Documentation and Recordkeeping

Good recordkeeping and transaction documentation practices are essential to managing and minimizing risk. When a problem does develop with a transaction, the broker will likely be asked to explain which actions were or were not taken to either cause or correct the problem, as well as to justify their actions.

As time passes, detailed memories about a transaction or event can become unreliable — or sometimes be altogether forgotten. Having written observations created at the time an event occurred will mostly be regarded as reliable evidence. In fact, in the case of litigation, contemporaneous memoranda are often accepted as an accurate record of events.

DEFINITION: Contemporaneous memorandum or documentation – a note written at the time of an event and stored in the transaction or client file.

Brokers should keep a file for each transaction or significant client event. Because it is difficult to anticipate problems that might arise in the future, proper documentation of any action taken at the time an event happens is always an excellent first line of defense against liability.

Here are some suggestions for real estate brokers to develop defensive recordkeeping practices and procedures:

  • Document all sources of information received.
  • Keep a phone log that summarizes all business calls.
  • Save all email and text communications.
  • Keep a complete transaction file that includes documentation of disclosures and disclaimers.
  • Keep dated records of the types of housing each prospective buyer asked to view, the kinds of housing options offered (manufactured, single family, condominiums, etc.), and other services provided.
  • Send the seller written updates about property showing activity and the feedback.
  • Indicate on each correspondence who is receiving copies.
  • Use confirmation letters to shift the burden of responsibility to the other party (“put the ball in their court”).

Disclosures – Be aware of and make all of your required disclosures promptly. These disclosures include the agency disclosure, conflicts of interest disclosure, seller’s property disclosure, environmental hazards disclosure, and others required by local law.

Disclaimers – While qualified to advise clients about selling and buying real estate, matters sometimes arise that will be outside of your area of expertise or beyond the scope of your real estate license. In these cases, you will want to use a written disclaimer to advise the client to seek the advice of a competent professional or service.

Documenting Information Provided To of From a Seller or Buyer – Your client might provide you with certain information or documents. Documents and information given to you by the client should be kept in your client file for future verification of the information or documents. You should also maintain a record of who asks for these verifications.

Risk Control – As soon as a liability issue is identified, steps should be taken to control it. Of primary importance is dealing with any complaint before it turns into litigation. Dealing with the complaint often means simple communication with the complaining party to try to minimize the issue or let them know you might be able to find an acceptable solution to the concern. Usually, failure to handle a complaint in its early stages will allow it to take on a life of its own. Quickly dealing with a complaint can prevent the complaining party from becoming angry and uncooperative, so be sure to address complaints promptly and before any opportunity for settlement becomes unlikely. Risk control means addressing an issue when it first arises by attempting to find an agreeable solution as soon as possible. While a solution or settlement may seem expensive, a settlement made where liability is likely to exist can be cheaper than litigation. Even if you win the litigation, your legal fees and costs to achieve the win will usually exceed a settlement amount agreed to before the litigation.

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OnlineEd blog postings are the opinion of the author and not intended as legal or other professional advice. Be sure to consult the appropriate party when professional advice is needed.

For more information about OnlineEd and their education for real estate brokers, principal brokers, property managers, and mortgage brokers visit www.OnlineEd.com.

All information contained in this posting is deemed correct as of the date of publication, but is not guaranteed by the author and may have been obtained from third-party sources. Due to the fluid nature of the subject matter, regulations, requirements and laws, prices and all other information may or may not be correct in the future and should be verified if cited, shared or otherwise republished.

OnlineEd® is a registered Trademark

Categories: Real Estate

OnlineEd Launches Free Oregon Real Estate Forms Course on Seller Carried Financing

Join OREF Forms Committee legal counsel, Alan Brickley, as he goes in-depth to explain seller carried financing issues. 

By Jeff Sorg, OnlineEd Blog

(June 25, 2019)

(PORTLAND, Ore.) OnlineEd – OnlineEd, Inc. and Oregon Real Estate Forms, LLC (OREF) have launched a new mid-year OREF course called Seller Carry Issues.

Course presenter, Alan Brickley, served as counsel with First American Title Insurance Company and has more than 50 years experience in working with title insurance and real estate law. He has also taught at Clackamas Community College, Lewis & Clark College, Northwestern College of Law, and Willamette University Law School and was an adjunct professor at Marylhurst University and Portland State University. Alan is the former mayor of West Linn (1974 to 1982) and member of the City Club of Portland where he has served on the Board of Governors and Chair of the research board. He is a frequent lecturer on real estate related issues for the Oregon State Bar, the Oregon Law Institute, the Mortgage Lending Education Board and other organizations.
Brickley starts this video course with the definition of seller carried transactions and explains the different ways to structure and secure seller financing. The second part of this course continues on to list various default and foreclosure remedies, identify how to mitigate payment risk for the buyer, what a broker can do without involving a lender or lawyer, and how the broker’s responsibilities will vary depending on which side of the transaction they represent.
Seller Carry Issues is approved by Oregon Real Estate Agency Continuing Education Provider, OnlineEd, for 1-hour of continuing education credit for real estate license renewal. The free course can be found as a standalone course here or bundled in the free OREF 4-credit hour package in the OnlineEd Oregon Real Estate CE Catalog.
OnlineEd, Inc. and OREF, LLC. have worked together since 2014 to bring free courses about various OREF forms as a public service to the Oregon real estate and legal community. To find out more about OREF, LLC. or to subscribe to their forms catalog, please visit their website:  https://orefonline.com/.

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Oregon Real Estate Forms, LLC was formed in 1997 by the Oregon Association of Realtors®, the Eugene Association of Realtors® and the Portland Metropolitan Association of Realtors®. The company is professionally managed by a staff of three in concert with a Board of Managers and a Forms Committee who are Realtors® appointed by each Association owner. OREF prepares and licenses high-quality real estate transaction and advisory forms created by legal and industry professionals.

OnlineEd blog postings are the opinion of the author and not intended as legal or other professional advice. Be sure to consult the appropriate party when professional advice is needed.

For more information about OnlineEd and their education for real estate brokers, principal brokers, property managers, and mortgage brokers visit www.OnlineEd.com.

All information contained in this posting is deemed correct as of the date of publication, but is not guaranteed by the author and may have been obtained from third-party sources. Due to the fluid nature of the subject matter, regulations, requirements and laws, prices and all other information may or may not be correct in the future and should be verified if cited, shared or otherwise republished.

OnlineEd® is a registered Trademark

U.S. Home Values Fall for the Second Straight Month

Home values grew 5.4% annually, down from 7.5% annual growth a year earlier

OnlineEd Blog

(June 25, 2019)

SEATTLE, June 25, 2019 /PRNewswire/ — U.S. home values dropped for the second month in a row, according to the May Zillow® Real Estate Market Reporti.

The typical U.S. home is worth $226,800, down 0.1% from a month earlier. Home values also fell in April, ending a streak of 85 consecutive months of gains that added $78,500 in value to the median home. This trend held in 32 of the 35 largest markets in the U.S. – home values rose in St. Louis and Phoenix, and remained flat in Riverside.

Year-over-year appreciation, while still strong compared to historic levels, has slowed in each of the past five months, falling to 5.4% growth in May. A year ago, home values grew 7.5% annually. Indianapolis and Cincinnati are the only markets that have accelerated from last May, while San Jose, Calif., remains the lone market to have turned negative year-over-year, falling 5.7%.

“Stepping back to think about housing over the long haul, the current slowdown in home value appreciation is expected and comforting,” said Zillow Director of Economic Research Skylar Olsen. “While the slowdown has been arguably abrupt, the soft declines over the past two months should not cause too much alarm. The aggressive pace of home values over the past several years was known to be unsustainable. Buyers simply couldn’t afford it, so prices are correcting. The expectation here is that we are steadily returning to normalcy—something U.S. housing hasn’t seen in two decades—and that will mean continued, but ever more moderate, volatility. The significant drop in mortgage rates, as well as renewed rent growth, may help return U.S. housing values to positive appreciation earlier than otherwise.”

While home value growth has slowed, rent prices are accelerating. The median monthly rent in the U.S. grew for the seventh month in a row, rising 2.7% to $1,479. Rents are growing faster now than a year ago in 28 of the top 35 markets, led by Las Vegas at 8.9%.

Inventory fell 0.5% year-over-year in the U.S., the third straight month of declines after inventory rose in January and February. The most significant drop was in Kansas City, which saw 27.8% fewer homes for sale than this time last year. Inventory growth was largest in Las Vegas and San Jose, both of which among the markets where home value growth has slowed the most in the past year.

Mortgage rates listed on Zillow continued to fall in May. Rates ended the month at 3.87%, down 14 basis points from May 1 and 88 basis points from a peak of 4.75% in November 2018. Zillow’s real-time mortgage rates are based on thousands of custom mortgage quotes submitted daily to anonymous borrowers on the Zillow Mortgages site and reflect the most recent changes in the market.

Metropolitan Area Zillow Home
Value Index,
May 2019
ZHVI
Month-
over-
Month
Change
ZHVI Year-
over-Year
Change
Zillow Rent
Index, May
2019
ZRI
Year-
over-
Year
Change
Inventory
Year-over-
Year
Change
United States $226,800 -0.1% 5.4% $1,479 2.7% -0.5%
New York, NY $442,800 -0.2% 3.8% $2,413 1.5% 5.1%
Los Angeles-Long Beach-Anaheim, CA $649,700 -0.2% 1.1% $2,835 3.1% 16.2%
Chicago, IL $225,700 -0.3% 2.6% $1,703 4.0% 5.8%
Dallas-Fort Worth, TX $242,600 -0.5% 6.3% $1,651 3.5% 11.0%
Philadelphia, PA $232,400 -0.4% 2.4% $1,611 2.7% -10.9%
Houston, TX $205,200 -0.2% 3.7% $1,586 2.3% 4.4%
Washington, DC $407,500 -0.2% 2.2% $2,179 2.3% -24.8%
Miami-Fort Lauderdale, FL $282,500 -0.5% 4.0% $1,934 3.8% 5.3%
Atlanta, GA $219,200 -0.4% 8.3% $1,462 5.0% 11.1%
Boston, MA $464,200 -0.6% 3.2% $2,415 2.4% 13.4%
San Francisco, CA $944,200 -0.4% 0.6% $3,458 1.8% 21.4%
Detroit, MI $162,300 -0.2% 6.1% $1,229 2.8% 14.7%
Riverside, CA $370,800 0.0% 4.4% $2,004 5.8% 2.7%
Phoenix, AZ $266,900 0.0% 5.5% $1,464 7.2% 0.9%
Seattle, WA $490,300 -0.5% 1.2% $2,245 3.0% 23.9%
Minneapolis-St Paul, MN $271,200 -0.1% 4.8% $1,706 4.3% 1.5%
San Diego, CA $591,000 0.0% 1.2% $2,660 4.6% 11.5%
St. Louis, MO $166,900 0.1% 3.8% $1,163 2.1% -12.8%
Tampa, FL $214,500 -0.3% 5.6% $1,454 4.9% 7.2%
Baltimore, MD $267,500 -0.3% 1.4% $1,751 0.7% -12.2%
Denver, CO $408,000 -0.3% 3.2% $2,126 3.7% 25.0%
Pittsburgh, PA $142,800 -0.5% 2.0% $1,105 2.4% -13.2%
Portland, OR $396,800 -0.3% 2.5% $1,883 2.6% 4.0%
Charlotte, NC $209,000 0.0% 8.1% $1,352 4.6% 8.9%
Sacramento, CA $411,800 -0.1% 3.6% $1,927 4.6% -0.4%
San Antonio, TX $194,000 -0.1% 5.1% $1,381 3.4% 17.5%
Orlando, FL $240,100 -0.2% 7.2% $1,543 6.8% 6.5%
Cincinnati, OH $170,100 -0.4% 6.9% $1,305 2.3% -5.4%
Cleveland, OH $145,800 -0.5% 4.1% $1,171 2.7% -3.6%
Kansas City, MO $191,900 -0.4% 6.4% $1,303 2.9% -27.8%
Las Vegas, NV $279,300 -0.4% 7.5% $1,418 8.9% 41.8%
Columbus, OH $192,300 -0.3% 6.8% $1,374 3.1% -3.1%
Indianapolis, IN $166,300 -0.3% 9.8% $1,239 3.5% N/A
San Jose, CA $1,176,200 -1.4% -5.7% $3,583 2.4% 40.6%
Austin, TX $311,200 -0.1% 5.3% $1,724 2.6% -4.3%

Source: Zillow press release

 

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OnlineEd blog postings are the opinion of the author and not intended as legal or other professional advice. Be sure to consult the appropriate party when professional advice is needed.

For more information about OnlineEd and their education for real estate brokers, principal brokers, property managers, and mortgage brokers visit www.OnlineEd.com.

All information contained in this posting is deemed correct as of the date of publication, but is not guaranteed by the author and may have been obtained from third-party sources. Due to the fluid nature of the subject matter, regulations, requirements and laws, prices and all other information may or may not be correct in the future and should be verified if cited, shared or otherwise republished.

OnlineEd® is a registered Trademark

Categories: Real Estate