01-09-07

My fellow agents,

Today I would like to show our fellow agents how we, as a professional specialist, have tried to complicate a simple real estate transaction under the influence of legal profession.

Our ancestors did their real estate transaction in a simple and costless way.  Twenty years ago, we used a two page California state board form to write up a normal offer (as opposed to a distressed sale).  The form has grown to 4 pages, 6 pages, and now it has 8 pages.  Are we smart or dumb enough to let attorneys to limit our creativity?  You will be the judge.

In 2001, I bought a property without an agent involved.  It took five minutes for the seller and me to write up a purchase agreement for the $210,000 property.  I did it in a piece of blank paper on the counter of my flower shop.  The purchase gave me a profit of $300,000 in two years plus one day.  I will talk about it later. 

Now I would like to ask you guys what you feel about the practice of our profession:

1. How many pages of a purchase contract do we need to buy a single residence, a very simple transaction (not a complicated billions commercial complex)?

2. How many pages of the purchase offer form do we really need to fill in to present an All Cash offer to buy a REO property in its "present" condition under "sold as is, where it is" terms? 

Have any idea? 

I believe you couldn't believe it.  We need at least 28 pages to do that?  I will show you what I have been dealt with a seasoned C-21 agent today in buying a REO property owned by Countrywide.  I almost gave up at this moment since I don't have to buy and a banker has to sell.  Why you treat a customer who is wiling to help like that, Countrywide or Mr. Banker?

Here are our email exchanges:

1. My email to listing agent:

Dear B****:  

Thank you for sending me 28 page offer form. For a regular REO transaction of a property with less than $300,000.00, are you sure that we have to fill in those 28 pages? Don't you think that is very absurd for a small deal in which an ALL CASH offer with "Sold As is, where is" is involved?  

I believe we can do it in an offer contract with just one page. It shall be very simple, why we have to use two forms: CA purchase contract and Countrywide form and make it so complicated by double work in repeating statements of everything, including purchase price and contingency (there is no contingency in my straight offer). 

We can write up an offer in a few sentences in just one page as follows:

This is a purchase offer made by Buyer ET to purchase from Seller Countrywide Financial the subject property located at 3***** S**** St., *****, CA 91*** (Los Angeles Assessor Parcel # ****-0*8-0*4):  

1. Purchase price shall be US$ -------------and this is an All Cash offer with no financial contingency.  

2. This sale is a "Sold As Is, Where Is" transaction and Buyer knows that Seller is exempted from disclosures by the laws. No inspection contingency exists as to all the physical conditions of the property. Buyer agrees to do his own due diligence on physical condition of the property at Buyer's expenses.  

3. Seller shall buy a marketable title insurance for Buyer. Buyer may terminate the purchase contract and escrow in 3 days after his receipt of the title report. In the event, this contract shall be deemed void and null.  

4. Escrow shall be open by Buyer's deposit of $15,000 in 2 days after the offer is accepted and closed by an escrow company in San Gabriel valley area within 21 days after the offer is accepted. Escrow fees shall be equally shared by both parties. All other fee or expenses, including county or condo transfer fee, charged by all public and private authorities shall be paid by Seller. If any dispute of fee arises, Buyer and Seller agree, in advance, to authorize the escrow officer settle it by most popular local normal custom.  

5. Commission: No agent involved in the transaction, except C-21 **** who acts as an agent of both parties and shall be paid by Seller a commission as set in its listing agreement.  

6. Seller's liability is limited to $5,000 if the escrow is unable to close. Buyer shall have a full refund of his deposit if the escrow is not closed and Buyer has no faulty.  

7. The transfer of title and the occupancy of the property shall be occurred at the same time by the surrender of keys and garage openers. The property shall be delivered in the present "clean and vacant" condition as it is when the offer is made and accepted.      

To avoid spend a lot of time for me to write and scan all 28 pages and email them to you, I have condensed them in a very brief contract, by the sequence of 33 clauses of California form and attached it here. If you approve it, I will use the condensed form and send you a written offer shortly.  

Ed

2. Response from the agent:

Hello Ed,  

Thank  you for your suggestion to simplified the offer.    

However, all 28 pages are required by Countrywide (seller) and CAR.  

Please let me know the price that you wish to offer on this property.    

Thank you,  

B**** K****

Century 21 **** Realty

Direct : ***-***-****

In the past three years, I have seen some real estate websites who make things very simple.  Those operators have taken the advantage of Internet and have made a hefty profit, roughly millions dollars every month at least.  They don't have the fiduciary duty legally put upon agents since they are operating as a marketing company, not a licensed RE brokerage.  They are taking our business away by making doing business with them a simple joy.  I have done and enjoyed doing business with them many times with simplicity.

How can we basically make a potential buyer so uneasy and stick to our traditional ways to compete with those RE marketing or so-called "lead" websites in their rising markets and shrink our territory?

Let me know what your response are?  Thanks