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Choose your topic Purchasing a Home where an NOD has been filed
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| Posted 5-1-2008 | |||||
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TOP From The Desk Of Laura Lee Anthony Good news!! (Two important messages below, save this information)
1. Due to The Court of Appeals holding that the bond requirement was "unconstitutionally vague" there have been some major changes in how we represent investor buyers of home that are in default. You now may represent such buyers (instead of until now we had to exit as agents, just accept "referral fees" from the listing agents, and not assist our clients with filling out the purchase agreement, etc.)
Remember what criteria triggers our using the NODPA (must meet all 4 or no NODPA is needed);
1. If the property being sold is residential one-to-four units; 2. The owner currently occupies the property; 3. A Notice of Default (NOD) has been recorded against the property; and 4. The buyer does not intend to occupy the property (i.e. buyer is an investor)
If the property goes NOD while in escrow (and you had used a regular purchase agreement) you do not have to re-write the offer. (As of this date this is the case.)
The NODPA will now include the DPL (new requirement - Declaration and Proof of Real Estate License - DPL, which is now the statutory requirement to declare and prove our "licensed status" in order to no longer have to obtain a surety bond - former requirement which no one could obtain)
2. Short Sales;
Please review the important information below to 1. Help facilitate short sales, 2. Protection of a buyer's deposit in the event the home goes to foreclosure sale and the seller leaves the area without releasing the buyer's deposit, 3. How to help protect our commissions when an REO company tries to alter/cut our fees when Troop/Troop listing/sale.
There are a number of concerns in SS/s that give rise to changing up / refining documentation agents draft on such transactions;
Unless specifically instructed otherwise by the lender, OPEN escrow on Short Sales!!
1- COMMISSIONS. if the listing and selling agents are different individuals … but both work for TROOP, PLEASE increase the chance of not seeing commissions chopped …. By completing e ITEM 27 of the PURCHASE AGREEMENT with ‘TRE - <AGENT NAME + DRE ID###> - and attach a DRE print out of the licensee ID (get it here: http://www2.dre.ca.gov/PublicASP/pplinfo.asp) – some may consider it an extra step and I agree – AN IMPORTANT EXTRA STEP!!!
2- SSA. Use SSA as opposed to ‘Purchase Agreement Addendum’ – the SSA better describes the SS process and expectations of the principals – also, it commits the buyer to a 30+ day wait while the SS submittal is made by the Seller – the total time frame takes about 40-60 days.
3- COUNTER-OFFER. Add the following language to your transactions;
Item 2.B. - Buyer shall deposit with Escrow Holder an increased deposit in the amount of three percent (3%) of the Purchase Price within three (3) days after Acceptance.(Seller's lender looks to this deposit as a gauge of Buyer's commitment to consummate transaction. (This is used if you began the transaction with a small deposit))
4. This is the additional paragraph when representing a Short Sale buyer that you would write on an addendum to the RPA and the SSA to obtain a return of the buyer’s deposit in the event the property has gone to sale and the seller has left the area without signing cancellation instruction so that the deposit doesn’t sit in Escrow for years!
" If Escrow Holder is not in physical receipt of a written acceptance of the terms of this sale from the Lender(s) of record of this sale within _____ days from the date of these instructions, and if Escrow Holder has not received written instructions to the contrary, Escrow Holder is herewith instructed to release the deposit of the Buyer in the amount of $____________ back to the Buyer, WITHOUT ANY FURTHER INSTRUCTIONS FROM THE PARTIES HERETO and to thereafter prepare cancellation instructions for this escrow." (Be sure the date in the first blank matches what you used on the SSA)
If you have any questions on any of this email, please call or email me.
Thanks and have a super weekend!
Laura Lee
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