Author Archives: Jim Reppond

Bye-Bye STI

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NWMLS treesThe NWMLS has announced that as of June 24th 2008, they will no longer use the term. Active STI. It will become Pending Inspection and two new statuses will be created, Pending Feasibility and Pending BU Requested.

For those who are members and have access to the database, all three statuses will appear in the pending section of the Hotsheet. Pending Inspection will be used when the property has a signed Purchase and Sale Agreement and has an inspection scheduled. Pending Feasibility will be used for listings where a purchase and sale agreement is signed pending a feasibility study. Pending BU Requested will be used when the seller would like to receive back up offers.

Once the inspection or feasibility study is completed the listing must be changed. The listing would be set to Active, if the inspection or feasibility study were not waived and the sale fails, or Pending, if waived.

The most significant change is that properties with a Pending Inspection status (formally STI) will not be visible on the public websites. All pending statuses shall be considered off-market and will be treated as follows:

  • They will not accrue market time.
  • They will be included in the Pending section of the NWMLS monthly published statistics.
  • They will not be included in the NWMLS Standard IDX feed and cannot be displayed on a web site.

I’m sort of surprised that Pending BU Requested will not be in the IDX feed and can not be shown on public websites. This goes counter to what Sellers want. That is, continued exposure to the market. Perhaps this will change with time too if the NWMLS receives feedback about it.

Our New Responsible Mortgage Lending law

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Just when you thought you had seen the most stupid law from our legislature regarding real estate omitting common sense, here comes another! House Bill 2770 aims to make what was a federal offense a state class-B felony. While it is aimed at mortgage brokers, it has wide sweeping implications to real estate agents, buyers, sellers, home inspectors, contractors, and just about anyone else who has even a limited financial interest in a real estate transaction involving a mortgage.

cross my fingersThis law provides that a residential mortgage loan may not be made unless a disclosure summary of all material terms is placed on a separate sheet of paper and has been provided by a financial institution to the borrower and that a financial institution may not make or facilitate the origination of a residential mortgage loan that includes a prepayment penalty or that imposes negative amortization under certain circumstances. And here’s the catch-all clincher: The law says that certain acts and omissions by any person in connection with making, brokering, or obtaining a residential mortgage loan are unlawful.

While part of the law attacks important issues like negative amortization and pre-payment penalties, it’s the broad definition regarding the disclosure of material facts relating to a property that causes me the greatest concern.

Example: Buyer purchases a home “subject to inspection

NWMLS to Allow Brokerages to share more Data

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The Northwest Multiple Listing Service has announced policy changes that will allow brokerages to display more information on their websites. This means that if brokerages choose to, people will be able to see the length of time a property has been on the market, referred to as days-on-market (DOM), as well as cumulative-days-on-market (CDOM), along with the listing price adjustment history. The NWMLS will only allow the DOM to be shown if the CDOM is also displayed in order to insure that consumers are not mislead.

Another change for brokerages is that they now have access to three download feeds instead of just two. This could be significant for brokerages that want more options and vendors to choose from to manage their data feeds for property searches, which they make available to agents and the public.

Famous Real Estate Agent Found Dead

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Linda Stein, a New York real estate known as “broker to the stars,” was found dead, apparently bludgeoned to death in her Manhattan apartment.

[photopress:Linda_Stein.jpg,thumb,alignright]Her body was found on Tuesday by her daughter but the cause of death was not confirmed until an autopsy Wednesday. Linda lived by herself. The building featured heavy security and there was no sign of forced entry or robbery. Reports say that all people entering the building use the elevator and there is an elevator operator. Officials have not announced any motives or suspects in the case.

Linda was the ex-wife of Seymour Stein, former president of Sire Records, which was the launching pad for the Ramones, Talking Heads and Madonna.

Before real estate Stein was a pivotal figure in the early New York punk scene, co-managing the Ramones with Danny Fields, and was a friend to David Bowie, Talking Heads, The B-52s and Madonna as wife of Sire Records founder Seymour Stein.

Her career continued into the world of expensive real estate, as she brokered property deals for stars like Sting, Billy Joel, Harrison Ford, Rolling Stone editor Jann Wenner, LaToya Jackson, Sylvester Stallone and Andrew Lloyd Webber, amongst others.

For many local Seattle-area agents this brings up painful memories of Windermere agent Michael Emert who was murdered in January 2001 in a Woodinville home listed for sale. Mr. Emert was showing the home or previewing it for a buyer at the time of his murder. Mr. Emert’s body was found by the seller, who is represented by another real estate firm and was a stranger to Mr. Emert. Police believe that Mr. Emert’s late-model Cadillac SUV was taken by the perpetrator and later abandoned in Kirkland. As far as I know this murder was never solved. But it caused a major change in many agents behavior when meeting prospective clients and help inspire SKAR‘s (Seattle-King County Association of Realtors) “Safety Week

NWMLS Form Changes

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I attended a Forms Update Training Class put on by the NWMLS recently and learned about a bunch of changes that are coming down the pike on October 15, 2007. And while I posted some class notes and sample Purchase and Sale Agreement documents over on my site, I thought I’d summarize things below.

Highlights

  • Coldwell Banker Bain (and I assume others) will drop the usage of their “own” optional clauses forms which will make co-op transactions smoother and easier for all agents.
  • Lots of discussion was given to the Washington State Supreme Court decision Alejandre v. Bull, which was the impetus for many of these changes. I won’t bore you with the details here. But they ruled “economic loss rule” prohibits the Buyer from suing the Seller for negligent misrepresentation regarding the condition of real property when the parties relationship is governed by a contract. The courts want to see the allocation of risk of economic loss in the Purchase and Sale Agreements – Hence the changes.

Purchase and Sale Agreement

  • Legal description must be attached as Exhibit A
  • No more counter-offer expiration date (use the counter-offer form)
  • Paragraph 9 – Buyer to waive or not waive the right to remedy in Form 17
  • Homeowners Policy is new default in P&S
  • Closing date and Possession date same – or use NWMLS forms 65A or 65B
  • New provisions address charges and assessments against the property
  • Page 5, item x: 10 day contingency for buyer to verify all information provided by Seller or Listing Agent.

Form 17

These have been in effect since July, but for clarification sake were covered in the updates class. There are several changes here, but the “Environmental Section” is the main one. Buyer can still waive the right to receive unless one of the items in the Environmental Section is checked yes. In that case, the form can not be waived.

As a side note, foreclosure properties are no longer exempt. No one has a clue why the legislature took that one out.

Financing Contingency

  • Buyer must seek Sellers consent to change lender or loan type after loan application period lapses (usually 5 days)

Inspection Contingency

  • Adds changes for “Environmental” Changes of Form 17
  • Advises Buyers to do septic inspection (NWMLS Form 22S)
  • Neighborhood Review Contingency is back

Optional Clauses Contingency

  • Utilities broadened to include others
  • Selling Office Commission moved to NWMLS Form 41C
  • Seller to produced HOA documents if available