Lying could be a $10,000 mistake!

Jackque & Larry~ Yep, like Sherry (#1) said. It's our livlihood, as well as the right thing to do.

Karen~ Thanks! I'll check out your blog entry! How dangerous that lying can be. If they lie on a mortgage ap, they are probably also lying to the insurer. When they have a loss, they might find themselves not covered!

Anita~ First off, "a little extra time" needs defined.  Second, many school districts will allow students who move during the school term to finish up a school year without changing buildings--again, the amount of time makes a difference in such a ruling. Third, you can request an extension from Fannie Mae, if you are a bona fide owner occupant.

Larry~I'm glad you stopped by my blog, but I have to correct some of your points.

I've sold properties held by all three and never in my real estate career have I witnessed such violations of buyer's legal rights than transaction of properties held by these three sellers.

First, your assumptive statement about buyer's rights over looks a vital concept in contract law. The buyer has NO RIGHTS in a transaction until the seller grants them. In other words, the seller has 100% of the rights in the transaction from the start. The seller has ABSOLUTE control over the disposition of the property, so the seller does have the legal right to establish parameters of the sale IN ALL REGARDS. The only exception to that are anti-discrimination statutes.

At what point do sellers cede some legal rights to their property ownership? When they sign a contract, the sellers grant specific rights to another party. The first contract is the listing contract. That contract, however, does not actually grant rights to potential buyers. It grants specific rights to the real estate agency and/or the cooperative/s in which that company participates (MLS is an example of that). A bidder STILL does not have RIGHTS, via that listing agreement. The seller can set parameters for the sale and can refuse ANY contract for ANY reason, other than discriminatory practices as defined by federal law.

In a traditional sale, for instance, a buyer can legally refuse to sell to specific persons, for any reason (ANY REASON), other than those federal, and sometimes state, laws. Fannie Mae has an extensive Master Listing Agreement with its brokers. The standard state listing contract is one small part of the overall picture. All sellers have the right to exclusions in their listing agreements and throughout the listing period.

For owners of a property to assert their property rights concerning the disposition of that property absolutely does not constitute "dubious trade practices," as you charge. It's contract law, pure and simple. The owner of a property owns that property 100% until they sign a contract. Basic stuff.

In regard to your last point, I made NO MENTION of parental co-purchase. You pulled that out of the blue. Your charge that I am placing my license in jeopardy for a discriminatory practice is entirely unfounded and highly unprofessional. If you are a licensee, which you seem to be, you are on dangerous ethical grounds. Be careful what kind of charges you level against another licensee and study up on what actually constitutes prosecutable discrimination.

You are correct when you say that there are some circumstances in which a parent can co-purchase with a child and fulfill the occupancy status as currently defined. That is current practice, but the determination is not a matter of discrimination against a protected class.

NOTE: I am not an authorized spokesperson for Fannie, Freddie, HUD, or any federal agency; and I am not a lawyer. I am, however, a listing broker for some of them; and it is in THAT context only that I posted the blog and the responses.

For the record, I am reposting the entire contents of the comment that precipitated my response:

Larry, you make another very good point, even if inadvertently. Selling REO properties can be very challenging for many agents. You certainly have the right to pass on participating. Buyers who are interested in REO listings should probably seek an agent who has a tolerance for, and an understanding of, the process.

Larry~Thank you so much for checking back in! You made a good point about the possibility of parental co-purchase, and that added to the discussion. It has to be done in the specific way that the seller will approve (purchasing with not purchasing for), but the co-purchase can qualify as an owner occupant even during the protected period.

Samuel~You referenced my comment #4. "Buying it for my son" is not the same as "Buying it with my son." The first is not a co-purchase and would be classed as an investment purchase under current rules. Of course, I explain the difference to any would-be purchaser. In fact, I have a property under contract at this very minute which is a parental co-purchase, but both names are on the contract and both will be on the deed. As I said, that is permitted under current rules, though that has not always been the case.

Parents who want to purchase in their names and then have children (or some other family member, for that matter) occupy are the ones who do not qualify for owner occupant status. Of course, the parents who add the adult child's name to the documents are not even considering lying about occupancy.

You are way off base when you say that I am steering and that any of this amounts to discrimination under the Fair Housing statutes. More than once in my response to Larry, I mentioned that sellers cannot ignore federal anti-discrimination statutes. Giving owner occupants preferential treatment (and defining owner occupant as someone who is actually going to LIVE in the home) does not violate Fair Housing statutes. Steering has a specific meaning that is nowhere close to anything in this discussion.

As Larry went on to say, it IS my blog. Because my intent is to inform and educate, I choose not to leave misinformation uncorrected. I, therefore, set the record straight when a comment has bad information. If that seems rude, so be it.

To explain the rules as they currently exist is not bullying or being contrarian. Defending myself when wrongly attacked is not, either. It's OK for you to call me contrarian, bully, and even rude, if you want to do so. It is not OK for you to muddy my blog with misinformation. I'll correct that every time.

Thanks for stopping by.

For the record, here is Samuel's comment in full:

Josh~Sorry, I just saw your questions. If you purchased a Fannie Mae property, the Owner Occupancy form states the rules (and they are also in my blog entry above). You agreed to MOVE IN within 60 days of closing, making it your PRIMARY RESIDENCE, and you said that you intend to live there for a year. That does not mean staying there occasionally or renting it to a friend.

You would be best protected by moving in even though your rental agreement is not up. Perhaps you can allow your friend to stay in the rented property.

The 90 day rule refers to selling and/or mortgaging the property. The 90 day limitation applies to investors, not to owner occupants. If you purchased as an owner occupant, that section of the addendum should not have been checked (and, thus, does not apply).