AUGUST 2002


What’s In This Issue?

·   President's Message

·   RESPA Article

·   Proposed Fed Rule Would Lead to Nationalization of Real Estate

·   Fact Sheet

·   House Stalls Treasury from Finalizing Banks in Real Estate Rule

·   Forms Update

·   New Membership Applications

·   Condolences

 

PRESIDENT'S MESSAGE

 

On Habits That Affect Our Future

If you’re like me the clock on your VCR continues to blink zeros incessantly—not because you lack the intelligence to set it correctly, but because the wrong time on your VCR won’t have an immediate impact on your life one way or another and you probably don’t need your VCR to tell you the correct time anyway.

 

However, not setting the correct time/date on our FAX machine (either at home or at the office) is a habit we definitely cannot afford as real estate professionals.   A wrong date/time stamp on the FAX header could become very costly for all concerned when dealing with matters of contract where time is of the essence.   Within the past several months I’ve received a number of facsimile transmissions to my office where the time date stamp of the sending machine was seriously in error.  When, as REALTORS®, we send/receive various provisions of a contract such as the TDS, counter offer, or contract modification, the time/date stamp of the sending FAX machine may be the only defense in any subsequent dispute.  I urge you to enhance your professional posture by appointing someone in your office to check the time/date of each FAX machine daily (as well as your computer clock) it will put a smile on your attorney’s face one day.

 

In their book, “The Power of Focus,” a book I highly recommend for anyone, but especially REALTORS®, authors Jack Canfield, Mark Hansen, and Les Lewitt point out that “. . . your habits will determine your future.”  Since we are all creatures of habit one must conclude that successful people must have developed “successful habits.”  Or, put another way, successful people have formed the habit of doing what unsuccessful people refuse to do.  Not only do habits determine our future they also determine the “quality of our future.”  I’m sure many people have entered the field of real estate because of the perceived “quality of life.”  So why is it that the statistics on survival are so abysmal? I’ve asked myself this question many times and I’ve been asked the same question by students who are looking at real estate as a potential career.

 

The answer, I’ve decided, has to do with our individual ability to form positive habits early in our career.  The old “immediate vs. deferred gratification” controversy always comes up in any discussion of success.  Those who perceived success as cellphones and Beemers sometimes fail to recognize that real success is about relationships.  After all, we must establish a relationship before any sale can occur.  “Put relationships first.  Without people in our business equation, we don’t have any tasks to do anyway,” says Sharon Drew Morgan in her book “Selling with Integrity: Reinventing sales through collaboration, respect, and serving.”  Service is the goal.  It’s what we do.  We need to define our purpose for being in this business because if our purpose isn’t service, perhaps further evaluation of our career choice is in order.  On the subject of “success,” I know of no finer definition than that of Ralph Waldo Emerson who said,

 

To Laugh often and much;

to win the respect of intelligent people and   affection of children;

to earn the appreciation of honest critics and endure the betrayal of false friends;

to appreciate beauty, to find the best in others;

to leave the world a bit better, whether by a

healthy child, a garden patch or a redeemed

social condition;

to know even one life has breathed easier

because you have lived.

This is to have succeeded.

 

 

Bruce A. Southstone, CRB, CRS, GRI

President 2002

 

 

 

RESPA ARTICLE

During last week’s Orientation Class, two apparently conflicting statements were made regarding the Seller opening an escrow before having entered into a Purchase Contract with a Buyer.  The question is whether the Seller (or the listing agent acting on behalf of the Seller) can require that a certain escrow office be used in a transaction.  The answer is complicated by the fact that most real estate escrows in Northern California are handled by title companies.

 

Under the federal Real Estate Settlement Procedures Act (“RESPA”), a Seller is prohibited from requiring that a certain title insurance company be used in the transaction.  The restriction applies only to the sale of residential real property involving one to four families (including condominium units or units in a cooperative development) where there is a federally related mortgage loan.  Such a loan is defined as a first deed of trust made by an institutional lender that is federally insured (e.g., FDIC) or insured or guaranteed by FHA or VA, or to be sold by FNMA, GNMA or FHLMC, or by a private lender who makes loans in excess of $1,000,000 in a calendar year.  This definition covers a great number of residential loans.

 

Requiring that a certain escrow be used may be tantamount to requiring that a particular title company be used if the escrow and the title insurance are from the same company, as is usually the case in Northern California.  If the loan is a federally related mortgage loan, the Seller may have violated RESPA and be liable to the Buyer in an amount equal to three times the cost of the title insurance.

 

If the Seller wants to have a particular title insurance company used for the escrow and issuance of the title insurance, he/she can only request, not require, that it be used.  If an escrow is opened with a title insurance company before a Purchase Contract is entered into, the Seller and the Listing Agent would have to be careful that this act is not interpreted as the Seller requiring that title insurance company.  Finally, the fact that the Seller and the Buyer may share in the cost of the title insurance premium does not affect this restriction on the Seller’s choosing the particular title insurance company.

 

PROPOSED FED RULE WOULD LEAD TO NATIONALIZATION OF REAL ESTATE

Allowing big banking conglomerates to enter real estate

would lead to the nationalization of the real estate industry and the loss of local businesses and jobs, NAR

President Martin Edwards Jr. told Congress last week. In testimony on H.R. 3424, The Community Choice In Real Estate Act, Edwards told the House Financial Services

Subcommittee on Financial Institutions and Consumer Credit to look at what big banks are doing to consumers now that banks have entered the insurance business,

citing instances where national banks and their federal regulators are trying to preempt state and local consumer protection laws. 

 

H.R. 3424 sponsors Ken Calvert (R-Calif.) and Paul Kanjorski (D-Pa.) testified that Congress should pass the bill.  A panel of opponents to the legislation was sharply questioned by members of the subcommittee about the need for this change, the possible adverse effects on the real estate industry, and regulatory hurdles.  Also testifying in favor of the bill were Robert Bailey, president of the California Association of REALTORS®, Texas REALTOR® Association Chair Mary Frances Burleson, Elisabeth Holland for the International Council of Shopping Centers, and John Taylor for the National Community Reinvestment Coalition. For more on Edwards' testimony, Go To: http://www.realtor.org/publicaffairsweb.nsf/Pages/FedProposed.

 

FACT SHEET

*Calif. median home price -- June ‘02: $324,370

*Calif. affordability index -- May ‘02: 27 percent

*Calif. highest median home price by C.A.R. region -- June ‘02: Santa Barbara South Coast $584,430

*Calif. lowest median home price by C.A.R. region -- June ‘02: High Desert $127,760 (*Source: C.A.R.)

 

Mortgage rates - week ending 7/18:

30-yr. fixed: 6.49%  ·  1-yr. adjustable: 4.5% 

15-yr. fixed: 5.93% (Source: Freddie Mac)

 

HOUSE STALLS TREASURY FROM FINALIZING BANKS IN REAL ESTATE RULE

The U.S. Treasury Dept. would be prohibited from using any of its fiscal year 2003 funds to implement a regulation that would allow banks to engage in Real estate brokerage under a bill passed in the U.S. House last week. This provision of H.R. 5120, the appropriations bill for the U.S Treasury and Post Office, was inserted at the committee level by Rep. Anne M. Northup, R-Ky. If the provision also passes the Senate and is signed by President Bush, the Treasury could implement the rule in October 2003. For more info, CONTACT: Edward Miller, emiller@realtors.org, 202/383-1171.

 

 

FORMS UPDATE

At the Standard Forms Advisory Committee meeting in January 2002, the below forms were identified for revision (or creation) in October 2002.

 

A study group is currently working on these revisions and your input is needed and appreciated.  Please send your comments on these revisions or any C.A.R. Standard Form to carforms@car.org.

 

We thank you for your comments and suggestions.

Revisions:

·                          Buyer's Inspection Advisory (BIA)

·                          Counter Offer (CO)

·                          Homeowner Association Information Request (HOA)

·                          Purchase Agreement Addendum (PAA)

·                          California Residential Purchase Agreement and Joint Escrow Instructions (RPA)

·                          Request for Repair (RR)

·                          Receipt for Reports and Contingency Removal (RRCR)

·                          Sale of Buyer's Property Contingency (SBP)

·                          Residential Listing Agreement (LA) (Minor modification change to administrative fee clause)

·                          Non-Exclusive ("Open") Agency Residential Listing Agreement (NEA) (Minor modification change to administrative fee clause)

·                          Exclusive Agency Listing Agreement (EA) (Minor modification change to administrative fee clause)

·                          Seller Financing Addendum and Disclosure (SFA)

·                          Seller's Affidavit of Non-foreign Status and/or California Residency (AS) (Regulatory change)

·                          Three-day Notice to Pay or Rent or Quit (PRQ) (Proof of service to be added)

The following forms will be conformed to the RPA revision approach where appropriate:

·              Business Purchase Agreement (BPA)

·              Commercial Property Purchase Agreement and Joint Escrow Instructions (CPA)

·              Manufactured Home Purchase Agreement and Joint Escrow Instructions (MHPA)

·              Probate Purchase Agreement and Joint Escrow Instructions (PPA)

·              Residential Income Property Purchase Agreement and Joint Escrow Instructions (RIPA)

·              Vacant Land Purchase Agreement and Joint Escrow Instructions (VLPA)

New Forms:

·              Notice to Perform (NTP)

·              Supplemental Statutory Disclosure (SSD)

NEW MEMBERSHIP APPLICATIONS

The following licensees have applied for membership with the Santa Cruz Association of REALTORS®:

 

New REALTOR® Members

Diana Rugh................. David Lyng & Associates

Gale Pickering…….. Coldwell Banker Jackson & Mann

Steve Thorley……..  Coldwell Banker Jackson & Mann               

Lainy Vanderwey.......... American Dream Realty

Sal Locatelli ......... Network Alliance Real Estate

Mohammad Khalid Network Alliance Real Estate

Lance Howard...... Network Alliance Real Estate

John O’Donnell ................ Bailey Properties, Inc.

Melodie Knapp ................ Bailey Properties, Inc.

Erin O’Brien-Kerr............ Bailey Properties, Inc.

John Keller....................... John Keller, Appraiser

Scott J. Scott..................... Scott Scott Properties

Guy Chanda.................... Mid-Coast Investments

Gerard Lallemand....................... Capitola Realty

Melvalyn Boscacci....... California Homes Realty.

James Grewer..... C21 Showcase REALTORS®.

Terry Cavanagh........... Vanguard REALTORS®

Roxy McDaniel... Century 21 Award Real Estate.

 

Comments about an applicant’s admittance should be submitted in writing to the Santa Cruz Association of REALTORS®, 2525 Main Street, Soquel, CA 95073.

 

New Affiliate Member

Compass Financial Associates, Edward “Denis” Roden

 

CONDOLENCES

We wish to express our deepest sympathy to the family and friends of Wally Wilson who passed away in July of this year. Wally had been an Association member since 1979.

 

 

FREQUENTLY USED PHONE NUMBERS

 

RE Infolink

Local………………..(408) 874-0200

Toll-Free……………(800) 546-5657

Fax …………………(408) 341-8900

FaxLink    ………….(408) 874-0225

 

Supra - SuperKey

Update Key………….(800) 481-3778

Field Support Line…. (800) 842-8269

 

C.A.R.

Main………………..(213) 739-8200

Legal Hotline………(213) 739-8282

 

Department of Real Estate

Sacramento…………(916) 227-0931

Oakland…………….(510) 622-2552

 

WinForms

Registration…………(800) 228-9466

Technical Support…..(586) 293-0642