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

I interrupt the regularly scheduled programming…

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to bring you this video interview by Joel from Inman Connect. While I talk too much and too fast, some of you might find it interesting to hear a bit about the history of RCG as well as some more details on the idea of “linkation“…

Now you can go back to your regularly scheduled programming…

One day every pothole will get its moment in the limelight

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I think the running joke about blogs a couple of years ago was that belly button lint blogging was why most blogs would forever remain niche-y and unread. Today much of the “fantastical” thinking about locally-focussed blogs is that citizen journalists will report on everything (everything!) happening in their neighborhoods. When they look up from their navels, the online future gazers say (actually they blog) that we’ll all be served better local news by a cadre of unpaid neighbors noticing things in front of their houses and doing a little snooping. I tended to sneer at this concept until today, when I read every word of this blog post about a pothole in my neighborhood. Yes. A pothole.

Perhaps citizen journalism does have a place…

Jim Cramer says don't buy now…except for Seattle.

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On the Today show yesterday, Jim Cramer from Mad Money told Meredith Viera “Don’t you dare buy now…you will lose money”.   This enraged Realtor Associations across the country who have blasted back that this is a “buyer’s market” and have demanded to NBC that Cramer correct his statements.

Cramer discusses slumping homes market
Cramer discusses slumping homes market

This morning on CNBC Squak on the Street, Cramer was asked if he would like to correct his statements on the Today Show…his only correction was that Seattle is still a good place to buy homes along with a small sector in…was okay to buy.  Click here to watch his “Seattle correction” from CNBC this morning.

I am a Mortgage Dispenser

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Over the past month, I’ve been combing through my database of my closed clients who have either adjustable rate or balloon mortgages.   I’m sending each and every [photopress:july55ad.jpg,full,alignright]one of them a letter reminding them of the terms of their mortgage.   Regardless of how much time I spend explaining how their mortgage program functions, as soon as someone has moved into their new home and they’re unpacking boxes—they’ve forgotten the fine details to the financing that made buying a home possible! 

The letters restate what is disclosed on the Federal Truth in Lending and their Note, including what their margin and caps are.    It also addresses when their first adjustment will take place and what the worse case rate and payment may be.   Worse case payments are currently not disclosed on the Truth in Lending.   

I began my mortgage career on April 1, 2000.   So far, 20% of my closed transactions have been adjustable or balloon mortgages and 3% of my total closed business would be classified as “subprime

7 Ways to Make an Impact

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Getting people to visit your website and read your blog post is interesting, but the most successful bloggers I see seem to get a kick out of having an impact on the industry. With that in mind, I came up with seven ways to make an impact by blogging:

1. Be more consumer-focused: No one loves an argument about buyer agency more than Ardell DellaLoggia (Here’s her first post on RCG a year-and-half ago to give you some perspective). While she may appear to loose an argument with real estate insiders from time-to-time, she always comes out ahead with consumer by arguing for what she consistently believes is their best interest.

2. Be more principled: Whether it be refusing to accept Brad Inman’s gifts or going out of his way to disclose meager earnings from his site, Greg Swann insists on taking the high ground. Add a prolific personality and the ability to say the right words at the right time, and Greg has clearly earned his reputation as a leader in the RE.net.

3. Be more consistent: Whether your interest is real estate blogs or the architecture of doors; Whether you are Beattles’ person or a Dylan person; Whether you like Odd & Crazy or Odd & Ends, Hanan Levin has been searching out the edges of the internet to return with blogging gold. Despite threats to quit and/or move to New Zealand, he continues to delight with multiple updates every day.

4. Be more fun: Is there a business plan behind traveling the country and playing with photoshop? Who cares. The Sellsius boys have shown us all how to make a huge impact by simply having more fun that the rest of us!

5. Be more credible: Whether taking on short sales, professional status, or subprime lending, Jillayne Schlicke always finds a way to offer the voice of reason by providing an interesting perspective filled with interesting solutions…

6. Be more unexpected: With stories ranging from the real estate happenings of Sanjaya, little towns in Austria with unusual names, and hard-hitting coverage of Redfin, one can never know what you’ll get when you land on a post by Marlow Harris… except that it will be interesting and probably provocative.

7. Be more up-to-date: No one else follows the online real estate industry better than Joel Burslem of the Future of Real Estate Marketing. Whether he is analyzing the new guys like Terabitz or the old guys like Zillow, he never misses and interesting story and consistently does a top-notch job putting developments in perspective.

——————-

If you’ve made it this far, then I might as well tell you the genesis of this article…

After my presentation a few weeks ago in Austin, TX, the folks at KW asked if I’d like to submit an article on blogging for the next issue of the KW newsletter. Rather than succumb to the usual “5 reasons you should blog” type article, I thought I’d try to be a bit more interesting and profile some of the bloggers that have made the largest impact on me.

I still haven’t figured out how I’m going to deal with the links (which obviously don’t translate well to a written article). I think I’ll just add one link for each individual back to their blog, and include some text that says the article is best viewed “blog” format on Rain City Guide with a link back to this article. If someone has a better solution on how to deal with lots of links within a printed article, I’m definitely open to suggestions…

As always, I’d love to get your feedback. Should I re-phrase things? Should I include another blogger who has made a strong impact on you?

And, no surprise, I put off writing this article until almost the last minute (the article is due by the end of the month!), so if you have some suggestions, you’ll need to make them soon in order to get into print! 🙂

Worthy of the public trust?

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[photopress:money_kid.jpg,thumb,alignright]I think this comes under the category of “Out of the mouths of babes”.

I happened upon this description of a real estate agent apparently written by the young man pictured here as a school project for “career day”.  Recently I have been evaluating a large number of agents who are currently with the Company, as well as several asking to join us.  I’ve always been told that my standards are too high.  That my bar is not realistic. 

As I read the young man’s description of what a real estate agent is, or should be, I was stunned by some of the key realities this young man depicted.

“Real estate agents help people buy and sell houses.  They must be able to say approximately how much money a house is worth…Real estate agents work for real estate brokers. Real estate brokers manage real estate offices…They help the seller set the price for the house. To do this, they must know what the house is like. They must also figure out what people would be willing to pay for the house so that it will sell quickly…Good real estate agents also spend time away from the office finding out more about the houses in their town that might one day be up for sale…They should deal honestly with people and have good manners.”

This is just a small excerpt.  I’m thinking of making this young man’s depiction of who we are and what we do required reading for all agents.  More and more I find my standard to be “worthy of the public trust”.  Someone you might hire to help your elderly mother buy a home.  Someone you might seek out if you don’t speak English very well, and need someone who you can trust to have your back. 

More and more I see people using “assistance to savvy buyers” as the benchmark for all that an agent needs to be.  I just don’t see it that way.  A savvy buyer can’t be the benchmark, though options should clearly exist for the savvy buyer.  Lower cost options.  But I think the standard of hiring and retaining agents has to be someone who is worthy of the public trust, because you really can’t forget the people who need an agent most, when setting your standards.

Deceptive Radio Advertising in Mortgage Lending

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Because of the enormous amount of deceptive direct mail, Internet, and email spam advertising currently taking place in mortgage lending, for this blog article, let’s focus on radio advertisements.

Every city I visit, loan originators and brokers complain about deceptive radio ads running continuously, making claims that may or may not be true, slamming the competition, and barely if not at all complying with advertising requirements set forth in the federal Truth-in-Lending Act. When I was in Vancouver WA recently, LOs told me there’s an ad running that says something like this: “If your mortgage broker charges any fees at all, they’re predatory lenders.