A very important piece of disclosure to a buyer is if the HOA is involved in a pending litigation. What is it and how does it impact a buyer?
Simply said, the HOA is being sued or is suing someone on behalf of the HOA community.
There are two common suits that HOA’s are involved in.
One is towards a contractor who allegedly performed less than stellar work on the property and now there is damage as a result. The HOA attempts to get the contractor to pay to fix the problem.
The second one is against the HOA. An example would be someone is injured on the property, or employees suing.
For example, an HOA attempts to sue a contractor for a large decorative community pond that is failing allegedly well before its life expectancy. This suit settled in favor of the contractor and as a result, the HOA attached a “special assessment” to each homeowner to pay for attorney’s fees AND to pay for the ponds to be fixed. The cost can range upwards to several thousands of dollars per owner over a course of several months to years. Of course, if insurance was involved and paid out a settlement, then most likely those premium will go up as well.
A prospective buyer should be advised of this potential cost if a settlement has not been reached. This prepares them for the possibility of increased HOA dues.
A buyer’s lender wants to know this information as well. A pending special assessment could tip the ratios resulting in an inability to qualify for a loan.
Where to find this information? Most HOA’s are pretty upfront about this and will provide documentation when docs are ordered directly from the HOA. Also check out the HOA Demand (sometimes HOA’s will only release this to an escrow officer), to see if there is any pending litigation or special assessments coming up. I like to have the buyer sign this to ensure full disclosure.
Another area to look for clues about this in in the Real Estate Transfer Disclosure the seller completes. There is a question about known lawsuits against or by the seller or common areas. If the answer is yes, then there should be documentation fully explaining the situation.
Looking for a new TC team to help you with your transactions? The amazing Coordinators at EscrowCoord.com are all experienced and certified so you receive the very best service. Call Diana today!
“No big deal, I just want to add my grandma to title when we close so in case I die…”
A wonderful gesture and good practice for many of us.
In the old days, the escrow officer would simply prepare the grant deed and other paperwork adding the second party to the, well…party!
Ah, but things have changed now. We worry about add-on buyers who have never looked at the purchase contract, disclosure and reports. Suddenly, after close they become the decision makers for the property and are not happy with the condition it was sold in and go after the seller and agents for non-disclosure. Could it happen? Anything is possible! Where is the compelling evidence that the additional buyer was being added for title purposes only? Did you write an addendum clarifying this?
The California Association has created an Assignment of Agreement Addendum that clearly states add-on buyers must sign the contracts, disclosures a reports (no signing a blanket statement that they have received all documents).
How will this impact you?
First, a second round of signature requests must take place, additional auditing and if your broker has a document platform like Skyslope, re-submitting docs into the system. A tremendous amount of time is used to complete this seemingly simple request especially if the disclosure package is large!
Second, even with the second buyer signing all documents, there may be risk that the add-on buyer could go after you.
Third, some lenders may not allow an additional buyer be added to the party. You’ll need to check before implementing.
What’s the easiest method to add another party to title? Complete it AFTER close of escrow. The escrow officer can help set it up for the buyer.
Looking for an experienced Transaction Coordinator that can help with your transactions? We know our stuff! Contact Diana Turnbloom today!
SFGate wrote a lovely article regarding a Special Project we are working on. We are excited to be part of the Kim Cole and Wardenclyffe team and coordinating this new construction project!
Are you looking for a Transaction Coordinator for your new development, commercial or residential income property project? EscrowCoord.com can help! Call Diana today!
For many small boutique brokerages, the broker may know what’s needed for files, but has never created a list for others to follow. Here’s a super easy method of building out a Doc Sheet for Single Family, Townhouse or Condominium resale transaction
Start by separating out minimum must-have items needed to write an offer and a listing agreement. This includes any in-house required documents that should be signed at this time.
Next, move onto the “wildcard” documents that are needed for transactions such as probate, short sale, REO, representative capacity signature disclosure and trust advisories.
Now, we’re ready for disclosures. This should be separated out for listing side and buyer side and should include the minimum needed plus any in-house required documents.
Finally, create a list of “wildcard” disclosures that are not included above such as City or County advisories, 1031 Exchange, Parking and Storage, Tenant Estoppal, HOA docs etc.
And that’s how you build out a requirement list!
At EscrowCoord.com we help set up docs sheets for brokers AND work on transaction files for your office. Contact Diana today to find out how we can save you time and effort!
Best Practices for Real Estate Auditors Equals Happiness for Everyone!
Having set up systems and tested effectiveness for real estate brokerage auditors, I’ve learned the perfect balance between under and over auditing files.
In an earlier post, I shared the importance of hiring an experienced auditor or TC that can manage high volumes of transactions.
Here, I’ll share why over/under auditing can create chaos and confusion for agents and TC’s.
When an auditor waits until 1 or 2 days prior to close (or worse AFTER close) to audit files, there’s not enough time for the team to locate requested docs and get them signed. This is especially problematic for the busy TC or agent working on multiple files with a tight schedule. Don’t under-audit!
A good auditor knows that auditing DURING the transaction allows team members time to gather requested docs prior to close.
But what happens when an auditor over-audits (audits every few days)? They don’t allow time for the other team members to gather prior requested items! The TC or agent is forced to review the same requests multiple times wasting time. With extremely high volume months, the over-zealous auditor will not keep up with demand. I’ve seen this happen to multiple auditors…when files are closed without an audit, it’s a disaster.
So what’s the sweet spot number for file auditing? 3-4 times MAX. Stick to it and you’ll have a 99% completed file at close and be able to audit high volumes of files.
Complete audit #1 when the property is first listed. Audit #2 occurs with contract acceptance (to determine if there are missing terms and additional items that are required for the file) and Audit #3 is finished 3 days prior to close. Complete Audit #4 on day of close and you’re done!
Here’s some final tips:
Don’t harass staff! If they’ve attempted to get a signature or a document and the client/agent declines or there is no response, either let it go or have the broker/manager get involved directly.
Be sure to communicate why you are rejecting a document. Understanding what you want will fast track correcting it.
Be consistent with document requirements. It’s challenging to get the right docs when it’s a moving target with every transaction. Create a cheat sheet of requirements that all parties have copies of to keep things fair.
At EscrowCoord.com we perform a minimum of 4 audits on all files to ensure final closing files are complete. To find out more about our outstanding TC services, contact Diana Turnbloom today!
A warm welcome to this outstanding Pacific Union team locate in Sonoma. We look forward to assisting Maurice, Matt and Stephany with their pending sales!
Several of our larger accounts have hired a company Auditor to audit paperwork on behalf of the broker. I’d like to share some insights into this relatively new role in the real estate industry.
California BRE states that all files must be audited by either the broker or a licensed individual who is assigned to perform the task. Due to increased and more complicated paperwork requirements, many large brokerage operations are opting to create an auditing position just to complete these tasks.
The auditor works with agents and TC’s performing audits on transaction files to ensure broker/BRE compliance.
They may also responsible for updating agent/TC’s on any changes or additions for file requirements, ensuring everyone has the latest version of in-house documents as well as answering general questions.
There are several systems that must be set up in order for an Auditor to effectively perform duties and work well with staff.
1. Auditor Requirements. In addition to having a current real estate license in good standing, the auditor should have experience working on multiple files and performing audits. When interviewing, look at experienced TC’s first as a top candidate. They should be able to manage high volumes of transactions and have closed a minimum of 200 transactions. This ensures they have enough knowledge to independently determine if additional disclosures are needed on any given file.
2. Broker document requirements (Broker Doc Sheet) is essential for the Auditor to understand what is needed for files. If one has not been established, then a round table meeting to hash out the requirements should be completed ASAP.
3. File management. Ideally, for an Auditor to work at multiple sites, all files should be virtual. Using a document management program like Skyslope helps place all files in one location where they can be accessed by all. Skyslope also allows back and forth communication between the Auditor and TC/agent.
Consider these tips prior to creating an auditing position for your company.
Need help setting up your Transaction Coordination department? Call Diana Turnbloom today to help with systems and staffing.
One of our larger brokerages asked for feedback on how to better process their files. I always appreciate offices who check in with us to see the how policy and procedure that is often created at the top levels of management work for those of us in the “trenches” of the business.
Feedback when used effectively creates positive changes in systems, a better flow of information, files processed in a timely manner and happier agents and TC’s!
A big concern for most companies is how to keep their eye on paperwork and ensure the agents are using the right forms for each transaction.
There are two simple solutions which I’ll discuss individually below:
ZipForms Broker Edition- A must-have if you want document management control. Here is what this little gem allows you to do:
All agents use the broker account to download docs using a sub-account that cannot be seen by anyone else than the broker and administrative staff.
The broker can create multiple templates for listings, pending sales and disclosure packages. In-house documents can be uploaded into the templates and swapped out anytime updating is needed. This saves everyone a TON of time!
Instead of sending out updated in-house documents or new disclosure requirements to agents hoping and praying they’ll get them completed and signed, everything is ready to go for the agent/TC in ZipForms Broker Edition.
TC’s love it because it’s a single access account with docs they need for all agents. Agents love it because there is no confusing document updates they have to remember to include for signature.
DocuSign Real Estate PLUS Broker Edition-This handy program allows you 100% access to agent’s files. Anything that runs through the platform can be seen and accessed. Bonus to your agents, you pay for their DocuSign! Each agent has a private login account that they use. TC’s love the single access account. Auditor’s love it because they can access any documents that are run through the system. If the document did not get into the final closing file, it very well may be in DocuSign.
Both of these products are well worth the price to give you piece of mind and ensure you know what’s going on with files and BRE compliance.
An important note! Products are only as good as how you set them up. You can have a great product but because of the way it’s been structured, it’s difficult for agents and staff to navigate or understand. Knowing how your staff works enables you to build a system that flows well and makes sense. Be sure to consider this or you’ll be inundated with complaints, no one will use it or worse, you’ll have to hire someone to work it because no one else understands your logic! Gahh!
Are you looking to upgrade systems in your office but don’t know where to begin? Diana Turnbloom is an expert at bridging real estate technology with real estate people. Her approach and ability to explain and simplify processes for companies enables individuals from the top management to assistants, office managers and Coordinators to save time and streamline steps. Call Diana today!
EscrowCoord.com has had an amazing 2017 with increased transaction closings every month and new record closing months! To fulfill our commitment to outstanding TC services, we have added on 2 new Coordinators; Sarah Kellar, who heads up our Presale Department and Esther Goldberg-Contreras, a pending sale specialist. Both have strong real estate backgrounds, are knowledgeable and professional. I'm thrilled these amazing women have joined our team! If you are an Independent Coordinator looking for better systems, team support and life balance, call Diana today!
Are you taking good care of your real estate team? Successful, sustainable top producing agents make the big wheel they turn seem effortless. Why? Because they take care to provide their team with resources to make everyone’s work day more efficient and personal lives more balanced.
Long term retention is a good indicator of overall contentment of your assistants, coordinators and team agents.
Here are some questions to consider to determine the health of your team:
Do you allow your team time off to recharge?
Working your team 24/7 guarantees burnout. People need time to be with their families and take care of personal matters. Remember, it’s important for you to recharge as well so you can be an effective leader. If you’re still not convinced, ask yourself this…who gets paid the most at the end of the day? If it’s you, then you’re on the hook to work weekends and holidays unless you want to pay staff extra to be on call.
Do you have great systems to help your team complete tasks quickly?
Systems provide consistent service to your clients and help train new staff. If you don’t have a system, ask one of your team members to create a policy procedure manual (and pay them for it). Systems also include well-functioning equipment to help process activities efficiently. Expecting your assistant to use a fax machine or old/slow computer/printer is frustrating to them and slows down processing. Invest in good equipment.
Are you paying enough to retain staff?
You may luck out by hiring a “newbie” at a reduced salary that ends up being a phenomenal assistant and stays with you for years, but for the rest of us, we get what we pay for. If you want a successful practice, surround yourself with great team members who reduce training time and improve transaction processing. Yes, you may have to pay a little more for it, but in the long run, you will have a better pool of applicants that are willing to work with you long term and not jump ship as soon as another agent lures them away with a bigger paycheck.
Are you creating an environment for your team that encourages goals, responsibility, autonomy and open-mindedness?
Supporting your team should be your number one goal (yes-your real estate clients should come second). When people feel cared for and listened to, they are more likely to stay. An interesting article about this can be found at Inc. 50000.
The transaction team at EscrowCoord.com have worked together for years and are the best in the industry. We work hard together, love our clients and have fun too! If you are an experienced Coordinator looking to join a great team of professionals, contact Diana today.
If you’re an agent looking to develop a super-star team, contact Diana and find out how we provide outstanding customer services to you and your clients.
We are proud to announce that our veteran Transaction Coordinator Tammy who has worked at EscrowCoord.com since 2013 just closed her 800th file! A wealth of experience and knowledge is gleaned from this type of experience and we appreciate her team leadership and friendship.
A warm welcome to Mark Biggins, Broker who is using our outstanding services to Coordinate a beautiful new construction condominium complex in Morgan Hill. We are excited to help with this project!
We recently received a listing agreement from an agent where the seller was an LLC (Limited Liability Company). There was some confusion with the agent on how and who should sign documents so I thought I would share some tips and tricks. The below applies for Corporate owned properties as well.
1-Always obtain a copy of the LLC documents from the seller to determine who has the authority to sign. Usually this is a manager/CEO who others (if there are other parties in the LLC) may have given permission to sign/make decisions. Occasional, all parties to the Corp or LLC must sign. Confirm this before preparing any document for signature.
2-The name of the person who has authority should be used to sign the documents (not the name of the LLC). If you are not using an addendum to clarify who the signer is, then you will also need to identify their position and the name of the LLC/Corp. Example: Bob Smith, Manager, ABC Holding, LLC. …a lot of text to add to contracts, so it’s much easier to clarify on a separate addenda or disclosure (see number 3).
3-A Representative Capacity Signature Disclosure or Addendum should be used to clarify who the signer is in relationship to the LLC.
4-Be sure to deliver the LLC to your escrow/title officer for review and approval. If you are unfamiliar with identifying the correct signer, the officer is a great resource person and will be happy to help!
The Coordinators at EscrowCoord.com are experts at LLC/Corp sales plus many more! Contact Diana today to find out how we can help create hassle-free transactions!
Did you know that California home resale buyers and sellers must negotiate a home warranty or waive it?
Our California Association of REALTORS, Penninsula Regional Data Service and San Francisco contracts make it super easy to do this by providing a handy section to negotiate or waive it right on the contract!
Home warranties benefit both the home buyer and seller in a pending sale transaction. After close, it provides the buyer with piece of mind knowing that if any issues such as plumbing or electrical come up after close of escrow, for a small deductible, it will be fixed or replaced (First American Home Warranty has a $75 service fee).
Some home warranty plans cover larger ticket items like roof, appliances, and air conditioning.
For the seller, phone calls from the buyer demanding repairs be made after close are dramatically reduced since the buyer can simply call the home warranty company instead.
Note that once the buyer has removed the physical inspection contingency and/or escrow has closed, typically the seller is no longer obligated to complete any additional repair/replacement requests.
Unless the circumstances are unusual (house is a tear-down or total remodel), it’s a good idea to order a home warranty for the buyer.
There is no customary payee. Seller, buyer or even agents can pay for it. Some brokerages require a home warranty because it reduces their Error and Omissions insurance premium.
Your TC’s at EscrowCoord.com always check this very important part of the contract to confirm if a home warranty has been negotiated or waived. We make sure YOU’RE covered! Call Diana Turnbloom today at 925-305-9625 to find out how we compliment your real estate team of experts!
I just had a question come up on a purchase contract regarding how to count the days for a contingency removal. I knew the answer depended upon which contract was being used, but decided to do some further research into the 3 most common contracts used in the Bay Area ( CAR-California Association of REALTORS, SF-San Francisco and PRDS-Peninsula Regional Data Service purchase agreement). There are some interesting differences between the deposit/increased deposit and contingency removals I’m happy to clarify for you here!
All three contracts allow a user to negotiate contingency removals/closing dates and deposits by a set amount of days from acceptance.
When reading the specific language on the three contracts, all describe the count as “days.”
The difference between them is that the CAR contract defines what “days” mean. Specifically, if the count falls on a weekend or holiday, it’s then moved to next business day (Yay for agents who don't want to work on Christmas!).
Since the San Francisco and PRDS contracts don’t offer a definition of days, they are counted as regular calendar days (including weekends and holidays). With these contracts, a contingency removal might then be due on a Saturday, Sunday, New Year’s or Fourth of July.
Let’s see how the logic works for the deposit and increased deposit.
All three contacts define the original deposit as “business days.” This means we don’t count (or we skip) weekend days or holidays. An example of this is if we have contract acceptance on a Thursday and the following Monday is a holiday. Day one is counted as Friday, day two is Tuesday, and day three is Wednesday.
The increased deposit changes slightly:
CAR contracts...since the increased deposit is defined as days, we then count the calendar days, and if it falls on a weekend or holiday, move it to next business day.
For the PRDS contact, since a specific date must be identified by the buyer/agent, the definition of days can vary.
The San Francisco contract defines the count for additional deposit as days. It may then be due on weekends or holidays. The tricky part is that escrow offices may not be open on weekends or holidays so a buyer would technically need to deliver the deposit prior to the weekend/holiday to fulfill the contractual obligation.
Below is a cheat sheet summary I pulled together for my team.
I had a lot of fun on this mini-project of defining “days” for each contract!
The Transaction Coordinators at EscrowCoord.com understand the importance of correctly calculating out time frames to ensure contractual obligations are met. We carefully monitor important milestones and keep you notified. Call Diana today at 925-305-9625 to find out how we can enhance your real estate practice!
California has rolled out a new law this year that all plumbing fixture in single family/townhouse/condo residences built on or prior to January 1st 1994 must be water conserving for any remodels or new construction.
At this time, it’s not a point of sale requirement. However, some counties and cities may have adopted a rule that all fixtures must be water conserving at close of escrow. Still others like San Francisco require an inspection.
Be sure to check your local Association of REALTORS, or county/city websites to determine if your next transaction will require these types of fixtures. There are some exceptions like historical buildings and inaccessible plumbing! Discuss with your clients the potential costs of replacement.
Some of the county/city disclosures have the water conserving plumbing fixture language. But many more do not. Best practice is to incorporate the CAR Water Conserving Plumbing Fixture and Carbon Monoxide into your disclosure requirements.
Your Transaction Team at EscrowCoord.com is ready to help you prepare disclosures and more! Contact Diana today to find out how we can provide outstanding TC services for you and your client.
We are thrilled to have Pamela join our team of Coordinators. She has extensive knowledge in Transaction Management having worked as a Coordinator since 2011. She is doing a great job servicing our agents. We welcome her to our group!
My company closes hundreds of transactions a year and we have never experienced a wire fraud incident. However, a conversation with one of my title company reps offered a real life horror story and got me thinking a little more carefully about it.
In May 2015, NAR issued a warning about wire fraud to its members.
Criminals are hacking into agent and escrow officer’s email accounts and posing as an employee of the title company or you instructing the buyer/seller to wire funds into a different escrow account. Once this money is sent, it’s difficult to locate it. Worse, the hackers insert a phone number to call them to verify the wire information is legit! Note that free email like Yahoo and Gmail and easiest to hack.
There is also the question of who is responsible when this happens…The agent because their email was hacked or the escrow company because they sent sensitive information to the agent?
To avoid this situation, some title companies are now using secured emails (require a username and password) to send out sensitive information to team members. This usually includes wiring instructions, estimated and final settlement statements and even deposit receipts which may include escrow numbers, escrow officer information and buyer’s names.
There are now wire fraud disclosures incorporated into many of the local and statewide disclosures.
Best practices is to alert your client when escrow is first opened to be careful with wire transfers. They should ONLY call the escrow officer that was initially assigned to the transaction to confirm the instructions prior to wiring.
Let them know that delivering a cashier’s check to the title office is the safest method of assuring the money gets into the right hands.
Do not forward sensitive information to other team members.
Finally, consider switching your free email account to a more secured domain to reduce potential hacks.