I just read a thread where NAR announced some new price tracking tool.  As I read the comments a beta tester said that agents will eventually have to pay for it.

Why does the National Association of Realtors need money?

Why does NAR give our listings to Realtor.com anyway?

Why does Realtor.com charge Realtors anything?  Should it be the venue for the intellectual property created by Realtors?. 

As a member of NAR I would like to know how this financial arrangement works.

If someone says it was a conract entered into years ago, I would like to explain whether its true that right after NAR officials negotiated the contract they went to work for parent company of Realtor.com?

The entire internet is being driven by the content and date collected arranged and promoted by the work of local real estate agents. 

We are the ones getting the listing.  As agents we have intellectual property in our work product and our pictures.

I think we should start charging Realtor.com, zillow and all these other vendors. 

I have a vision of listing agents forming together to control their own intellectual property in a cooperative manner and charging these intellectual property scrapers for access to info they use to derive millions in profits. 

At the very least every display of our listings should have a link back to our clients main web site.  If a consumer wishes to get added information from the source, they should be able get it.

Lenders seem to stepping up their collections efforts after short sales. 

Question / Comments: I just completed a short sale on my house in Corona, CA and Citibank is the second on the house is coming after me even though the house is sold and I am insolvent. What should I do?
Info Request:  Short Sale

Answer:

The first thing I would do is go over all the documents and communications involved in your transaction and recreate the terms of the deal. 

There is a chance you were released from the remaining loan balance in writing.

Some lenders provide clear releases of liablity from the remaining loan balance.

Some lenders clearly state you will be liabile for the remaining loans.

Some lenders ignore the subject

Some lenders provide misleading releases

And some lenders  provide a multitude of different types of releases and you have to read them all.

----

Also based on the terms of the transaction and what actually happened, you might be able to argue the lender has no right to collect after releasing its lien.  This is a complicated argument and I would review the case law and compare and contrast your facts with the cases.   

---

Finally you might want to talk to an attorney to discuss all your options.  I have always wondered who advises people to close on short sales if they do not have a law license.

I have a whole section on California short sale law at UpsideDownRealEstate.com

here was a very interesting blog by Larry Bergstrom. 

He gave a thoughtful answer to a very familiar question.

I really liked the fact he brought up the agency concerns.

http://activerain.com/blogsview/1315653/-did-you-set-the-price-or-did-the-seller-

Are our Real Estate Agency Rules outdated?

Why are we supposed to avoid telling agents and or the public price is negotiable.  (unless our sellers specifically say price is not negotiable)

Whether we are trying to stimulate a new offer or trying to negotiate an improved offer, we are working on behalf of the seller.  How could trying to bring in an offer or bring a current offer higher not be to our sellers advantage.  We are not signing deals for our sellers.

My thought is that unless we are also working with a specific buyer and a specific buying opportunity we should be at liberty to say, sure the current listing price may be high for some buyers, but our price is negotiable. 

Since we already know most Realtors are always negotiating price why don't we insist that agency rules conform to real estate reality. 

(I exclude a situation in which the listing Realtor is also represents the buyer. )

Carlsbad Real Estate

Short Sale guidelines from Bank of America

This is a summary from and “internal memo” sent to me.

1. multiple appraisals may be conducted because investors or third party insurance may require current appraisals

2. B of A will pay sellers traditional closing costs like real estate commissions, appraisals taxes etc.

3. B of A will postpone foreclosure dates but the earlier you start the Short Sale process the better.

4. The closer the buyers offer is to the appraised value the more likely a short sale is to be approved.

5. B of A will not consider short sales from borrowers who are current unless imminent hardship is demonstrated.

6. Tax implications should be reviewed by an attorney or accountant.

7. Transaction must be arm's length

8. Promissory notes or cash contributions from seller may be required

9. BofA will usually require the borrower or agent to negotiate junior liens and the junior lien may delay the short sale.

Bank of America Short Sale Info

Non Recourse Loans (see CCP 580b)

Short Sales and Taxation by the State of California has become a little less risky.

In July of 2009 the California wrote this in one of their tax newsletters

"The most common situations when a foreclosure or a short sale does not result in cancellation of debt (COD) income involve a non-recourse loan. A non-recourse loan means the lender’s only remedy in case of default is to repossess the property the lender cannot pursue you personally in case of default. A purchase money loan (that is, a loan taken to “purchase” your home) is generally considered to be a non-recourse loan in California. Refinances, second mortgages, and “cash out” loans are generally recourse loans."

http://www.ftb.ca.gov/professionals/taxnews/2009/July/Article_9.shtml

This was a very important clarification of their position.  There had been a debate regarding how the FTB would treat short sales of non recourse loans.  In fact in the early part of 2009 the California Franchise Tax board was telling people on the phone  they would have to pay taxes on the 1099 income.

I know this is a fact because one of sellers with an approved short sales opted to take a foreclosure rather than risk the tax burden to California.  ( I suggested they call because they were asking very good questions about the applicablity of IRS tax law to California.) 

for more info on

Taxation of Short Sales in California

We completed a short sale for a client here in North County San Diego.

Now they have another short sale to do in San Luis Obispo and they asked if I I would over see it. 

I suppose this means that I would have to take a referall fee to oversee what is happening on the file.

The property is supposed to worth between 250 and 300 thousand. 

Send me an email or give me a call if you are interested.

The more experience you have the better.

But if you have none, I could do the negotiating and do a co - listing or take a larger referral fee.

I am flexible.

short sale info

It took 14 months but last week we got an approval from BofA.  The initial approval carried the usual Bank of America language.... BofA and its investors reserve the right to pursue the deficiency - Standard Bank of America short sale language 

I called up our negotiator and left a message in my nicest tone: 

1. Thank you for the approval- I appreciate your effort and attention.

2. As you know this is a CCP 580 b protected loan.  I said, we already negotiated away the second lien and loan on with a short pay and therefore the other thing left is to close this short sale with one loan or accept a foreclosure. 

I sort of begged her to not make me tell my client that a foreclosure is the only safe way to avoid exposure to 150 grand plus taxes to CA.  

3.  I stated that in the past BofA told me they will not pursue a client who has purchase money loans.  I nicely said that if I could get the lanaguage then I might also be able to protect my seller from the CA tax board.  I said please do not let all our hard work go to waste.

4.  2 days ago we got an email with the language we needed. 

As and added bonus I will be able to use this langauge going forward on many of my Bank of America Short sales in California

For more on San Diego short sales and California anti deficiency law

Sometimes you get a little lucky during negotiations -  even with Bank of America.

http://activerain.com/blogsview/1248323/an-open-rant-to-short-sale-listing-agents-in-south-florida-a-select-few-you-may-recognize-yourself-here-

is a link to an interesting rant about listing agents.

I thought I would give a little response on behalf of listing agents. 

1.  Please stop calling us for information which is disclosed for all agents to read on the MLS listing.  Do buyer's agents have so much time on their hands they do not mind asking silly questions?  As a listing agents you know the lenders are already wasting an larger amount of our time.   Have some consideration.  If the status of the short sale is marked on the MLS as  - offer submitted - , why not believe the status.  If you have a cash buyer ready to go - send me an email, we will call you if our current buyer drops out.

2. Please stop submitting offers with terms you know will be countered by the lenders.  If your buyer really wants someone else to pay for the 400 dollar warranty, consider having the buyer pay for it or pay for it yourself. (seriously).  By putting that request in your offer you are making the banks negotiator do extra  work on your client's offer.   (which is a good reason to move it to the bottom of the file.)

3.  Please stop picking the escrow agent - we have to work with escrow to get huds in to the bank... put some thought into how the process works.  (at least here in California)

4. If you agree to use our escrow agent over the phone - please honor your word when it comes time to move through escrow.

5. If we say your offer is in a backup position (or on the short sale bench) do not put us on one of your drip emails that asks for updates every week.

6. Please make sure your buyers are really qualified to close on the property.  We are seeing pre-approvals which are useless.  Now we have to ask for the DU.  

Those are just a few - but here is the big one... 

STOP LYING ABOUT YOUR CLIENTS ABILITY and INTENTION TO CLOSE ON THIS PARTICULAR PROPERTY.

DO NOT TELL listing agents that if we get the approval your buyer will close,  (If your buyer is out making multiple offers and planning to close on the first offer he or she gets accepted.   

 short sales in orange county and short sales in san diego

Question - Does the state of California tax the "short" money?  Or does it forgive like the IRS?

Response -

good question.  CA mortgage debt forgiveness act expired on Jan 1 2009. 
Whether you owe taxes on the loan forgiveness depends on multiple factors.

Such as whether the loans are CCP 580 b loans
whether you do a short sale or a foreclosure (perhaps)
whether you are insolvent

and other factors. 

I would go to the Franchise Tax Board webiste or hire an attorney experienced in loan workouts.

Short sale taxation

John,

Some of the articles on your blog hit awfully close to home for us. We have been seeking a Short Sale and finally have approval from the HELOC holder (Chase). We are disinclined to accept it because it does not address the deficiency. We are pushing our negotiator (The San Jose office of Intero Real Estate has 2 people that specialize in negotiating short sales although, so far, they have been nothing more than coordinators) to get the deficiency negotiated prior to our acceptance of the bank's terms. We wonder if we would be better off if we stopped making payments to the HELOC holder and continue paying to the mortgage holder (we are not in default to either, yet). They would get a little less than half of the $577K balance if they foreclosed leaving a deficiency over $300K.

Here's a little background.

 1. We are in the process of a short sale in California. Mortgage $323K. HELOC $577K. We have not missed any payments, yet, and have the option of continuing to pay.

 2. We recognize that our credit score is going to take a hit but are interested in minimizing that as much as possible - everything else being equal.

 3. Our purchase money mortgage is not at risk ($323K). Our HELOC with WaMu/Chase ($577K) is at risk and the deficiency is over $300K.

 4. We have a buyer and they have been approved by Chase but Chase hasn't yet given anything on the deficiency.

Is it reasonable to expect Chase to forgive the entire deficiency or at least a large portion and negotiate a payment plan for the remaining deficiency? Are we right to get this done before accepting their terms on the short sale (about the only leverage we're going to get)?

Would we encourage Chase to forgive all or a portion by stopping payments to them and therefore threatening a foreclosure situation?

NOTE: we understand that if we let our mortgage holder foreclose, Chase (2nd position - non-purchase money) can pursue all avenues available to recover their money (recourse). We suspect that if Chase were to foreclose, since California is a one action state, they would be limited to whatever they could get from a sale of the property (I believe the property is the only security they have - does that sound right?). Therefore, one possible course of action would be to keep paying on the mortgage (the smaller amount) and stop making payments on the HELOC.

HELP

If your heloc was taken out after the purchase - your are correct - that loan is most likely a recourse loan.
I have negotiate five or six short sales with chase recently and if you have assets or a salary
(and perhaps even if you do not) you can expect that chase is going to request that you make a financial
"contribution" towards your short sale.

They may even offer you one contribution for a release from the deficiency and a smaller amount to just
release their lien.

Thats when the negotiations begin.  You should be prepare all your leverage.
Yes, you might consider getting current with the first and forcing the second to foreclose (hopefully non - judicially).  Then perhaps you would even start the short sale again and hope to be assigned to a different negotiator. 

Negotiations with lenders are dynamic, hopefully you are working with someone who can show short sale approval letters from chase in which they have agreed to release the deficiency in writing.

Be prepared for a professional but tough negotiation.

orange county short sale information

san diego mls