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.
I recently did some consulting for a Top Producing agent who was looking for advice to work better with her team.
In this particular case, the agent felt the need to take care of everything herself to ensure the client was getting the best services but underutilizing the team.
Unfortunately, just like a Bell Curve, it works well for a set number of transactions, but as the transactions/clients increase, the ability to service all of those clients, drops. The result is unhappy clients, an exhausted agent and a developing reputation as a sloppy or unavailable agent (see Yelp).
Many agents working with teams are challenged to find the “sweet spot” of delegation. The extreme are either unwilling to give up any tasks, or dump the farm onto a team member that is ill-equipped and poorly paid to manage it (see Bell Curve description above).
Here are a few tips to consider:
1-Identify who is the Rain-Maker of the team. This is the person who is bringing in the most money to the organization. The goal of the team is to keep Rain-Maker producing at their highest and best level WITHOUT BURNING OUT!
2-The Rain-Maker must delegate non-agent duties to other team members so there is adequate time to work on listing presentations, presenting offers and leading the team.
3-Have enough staff to cover the non-agent duties. Ideally, hire a Listing Coordinator, Transaction Coordinator, Marketing Coordinator and Buyer’s Agent. These 4 team members should be able to adequately cover activities and free up Rain-Maker’s time. Burdening one team member with multiple duties, long hours and overwhelming responsibility results in high staff turnaround and wasted time training new individuals. If you don’t feel you have enough work to employ someone full-time, look into virtual services that work for multiple agents/offices and are only paid per transaction.
4-Clearly identify the duties of each team member, so there is no duplication or gaps in service.
5-Identify the “Mother Mary” of the operation. This is one of the team members who can make executive decisions and solve problems for the rest of the team while Rain-Maker is unavailable. This keeps the work-flow moving and reduces team frustration.
6-Direct all calls and emails away from the Rain-Maker to appropriate team members. The decision to direct a call to Rain-Maker should be made ONLY after determining if another team member is unable to help first.
7-Each team member MUST take time off to rest. The Real Estate World can be a crazy, busy, intense life-style. Without adequate time off to regroup and rest, YOU WILL BURN OUT or worse, your level of service will plummet into the black hole of “bad reputation.”
Diana Turnbloom offers Transaction Coordination and real estate consulting services to improve or set up office systems. EscrowCoord.com offers outstanding virtual Transaction Coordination services for all producing level agents. For more information, contact Diana at 925-305-9625 or email firstname.lastname@example.org
We are proud to be part of Sarah Wikstrom's real estate team and look forward to many future successful closed transactions!
We are proud to announce the birth of our newest little Transaction Coordinator, Sloan Michelle Avery, care of Kate Avery. Weighing in at 7 lbs 10 oz, both mom and baby are doing great!
Recently, I had a lively debate with one of my very sharp brokers (my hubby) regarding the removal of the inspection contingency on the CAR-CR form.
His argument was, if the inspection contingency is removed but the disclosures, reports, HOA docs, title report are not, then the buyer COULD cancel the contract if these documents do not meet approval and retain their deposit. He is correct but there is another angle to it.
As one of the original authors of the Contingency Removal form, I do understand the intent and how it’s to be used.
When the contract committee first created the architecture of the contract, we began with only the loan and contingency removal. However, a few of the agents on the team acknowledged that they frequently will remove other items (which are part of the contract) separately as well.
For example, say the buyer is unable to provide the loan contingency in a timely manner to the seller. So in good faith, the buyer instead removes the appraisal contingency, showing the seller that the loan is at least moving in the right direction.
Note that a loan contingency can never be removed BEFORE the appraisal contingency (if it's a contractual obligation) since the property must appraise out before a lender will issue loan approval.
We use this same logic when removing the inspection contingency. If there is a delay removing it, the buyer can option to remove other contingencies such as reports and disclosures to help show they ARE interested in moving forward.
In order for a buyer to remove a physical inspection contingency, it makes sense that in addition to performing inspections of the property, they should also review reports and disclosures provided by the seller to ascertain if additional inspections are warranted such as a termite report from the seller that calls for further inspections.
So, removal of the inspection contingency but withholding removing reports and disclosures, for example, doesn’t make sense from a contract perspective. Can a buyer “undo” the inspection contingency removal and cancel the contract in the event the seller provides a report after the fact? I suppose, but why muddy the waters that involve deposits and liquidated damages?
If you want to game the transaction, go ahead and remove some of the other contingencies like HOA, title report and disclosures/reports before you remove the inspection contingency.
Make sure your buyer has had the opportunity to review and approve all seller required disclosures and reports and be allowed time to perform and review their own investigations prior to removing this important contingency.
We are excited to be working with the Real Estate Team at Loh Realty and Investments in Oakland! Our commercial services are a perfect match for their TC needs!
We'd like to welcome Elizabeth to EscrowCoord.com! Looking forward to assisting her with her pending and pre-sale transactions!
It happens…buyer and seller re-negotiate the sales price or add credits after inspections have been completed.
Just a year ago, we would address these changes on an addendum, send to the escrow office and lender (hopefully before the loan docs have been prepared) and we were good to go!
Now, every change must be approved by the buyer FIRST before loan docs can be ordered. Here is the tricky part. They must be allowed 3 days (Sundays and holidays excluded) from receipt of the Closing Disclosure (CD) to review the change before anything can happen.
This is a result of a new lending law that commenced in October of 2015. “Know Before You Owe” rule helps borrowers understand the loan terms before they sign loan documents.
This cooling off period can have some detrimental effects on the closing date if re-negotiations are occurring close to the closing date.
Buyers and sellers who have an urgent need to close on time require agents to coordinate action items and offer guidance to ensure there are no delays.
Here are some tips to avoid the time crunch:
1-Order inspections the day you go under contact so reports are received early during the transaction
2-Get seller disclosures in the hands of the buyer ASAP
3-Push the lender to order the appraisal ASAP
4-Re-negotiate terms, if needed, as early as possible during the transaction
Finally, ensure your clients understand how the process works so they can make better decisions during any re-negotiating process.
We are proud to team up with Marissa Reyes, Broker for Green Heights Realty in South San Francisco and look forward to helping her build her business!
We are excited to assist Ash Golani, Broker with his pending and pre-sale transactions!
If you’re ready to close out a file and thinking about purging emails related to the transaction, think again!
Emails are the simplest method of documenting what happened during a transaction. For most of us, communication is now performed via email. (Yes, I’m old enough to remember when we used phones and FAX’s!).
Documentation, in the event of a transaction related lawsuit, provides written evidence of activities and events. Although many challenging transactions feel like you’ll never forget what happened, all of us tend to lose the details of the story after time. And you never know when a seemingly easy transaction turns sour a year or two after close.
In the old days, our office required we write down activities completed for a transaction plus phone conversations we had with other team members…a lot of work!
Today, we encourage team members to communicate via email, so documentation is easily completed!
A great example of how email correspondence protects and save time is document requests from the other agent. If the agent fails to provide you with required documents for a file, email requests help show proof of your attempts to obtain them. By resending the same email request, you save time!
EscrowCoord.com uses a system of rules and folders to store incoming and outgoing emails for each pending sale. This can total upwards of 150 emails or more for just one transaction!
After the property closes, emails are converted into a PDF and delivered to our represented agent for safe keeping before they are purged from our email accounts.
Having solid documentation stored in a readable format for many years to come provides an important set of tools you may need to fend off incoming legal problems after close of escrow.
Use emails as your best method of documentation to save you time to work on more money making activities.
Contact Diana at EscrowCoord.com today to find out how we help you with documentation and save time, money and hassle managing your pending sales!
A recent change in the California Association of REALTORS (CAR) Representative Capacity Signature Disclosure and resulting confusion on how it’s to be used prompted me to write about Standard Forms Advisory Committee (SFAC) and how disclosures/contracts are created.
Years ago, l had the privilege of sitting in on a contract committee for the Inspection Contingency Removal contract. The old original was too open ended and required the buyer’s agent to type/write out removals increasing errors in the process.
A roundtable of real estate agents, brokers, attorneys, employees of the California Association of REALTORS and I hashed out an amazing form that is still fundamentally used today in practice.
Sometimes the intent of the parties in that meeting doesn’t always play out well or it’s poorly understood in the field. First rule of altering or creating a new form: DOES IT MAKE SENSE TO THOSE USING/SIGNING IT? An example of this is the somewhat new HOA forms that CAR created to comply with the CAR purchase contract and other civil codes. Although it’s clear they should be completed or an acceptable substitute provided, it’s NOT clear why there is a signature line for the seller to sign that they are confirming the package is complete. This appears unreasonable as many sellers never SEE the package that’s delivered from the HOA directly to the buyer’s agent nor do they know what a “complete” package is.
The latest form change is the Representative Capacity Signature Disclosure which has been split into buyer and seller formats. Here they added an area for the broker to sign. A broker's auditor believed that two forms needed to be generated, one for the broker to sign and a second one for the buyer to sign. Huh?!
When I asked why, the response was “I guess CAR thinks it’s a good idea.”
This appears to be an inefficient method of gathering signatures for one form. Why not create a form so that both the listing agent and buyer can sign just one document?
After a call to CAR with the legal department who directed my suggestions/concerns to SFAC, it was clear to me, this may NOT have been a well thought out disclosure change.
Second Rule of altering or creating forms: ALWAYS ATTEMPT TO REDUCE PAPERWORK SO RISK OF LITIGATION IS REDUCED. The more paperwork to track and audit, the more likely mistakes will occur!
Although CAR’s goal is to provide brokers/agents with contracts and disclosures to protect from litigation, they're NOT always right!
Notify them when new a form is not working well for you. Adjustments will be made according to complaints/suggestions.
Don’t be intimated by contract/disclosure language. If you don’t understand, ask why? It’s your job to know so you can provide an explanation to your client and ensure you both are protected from potential litigation.
A recent issue came up with HOA documents that had expired and changed without the agent’s knowledge during a delayed close of escrow.
Specifically a new pro forma budget with an increase in dues had been generated since the original package had been ordered and delivered to the buyer. Fortunately the increase was small but it brought to mind how challenging it can be to track HOA updates and changes with the governing body.
Creating a system that would remind us to check the HOA docs for any impending expirations/additions/changes (like the insurance certification, budget, financials, HOA certification and new newsletters and annual meetings) proved impossible as we needed to know when meetings take place, if there was a change to the meeting date, if the budget and other documents came out early or late, etc.
Many HOA’s using online services make it difficult to check for updates and may even charge additional fees.
Finally, a delayed closing make it difficult to create a timeline check for possible changes to the documents along the way. You know how delays go-suddenly docs are in title and we are closing the next day!
Our California purchase contracts do not specify how current HOA docs should be (other than the most recent 12 months of minutes). Furthermore, the CAR HOA forms 2 and 3 (which provide a list of documents for the HOA to check) specify that Brokers have not and will not review the documents for completion.
Some agents are now including a statement on their Receipt for Documents cover page:
Buyer(s) is/are aware that Homeowner's Association documents associated with this transaction may expire, be updated or changed by the HOA without agent or seller knowledge. It is the buyer’s responsibility to confirm all information is up-to-date.
Another helpful tip is to remind your seller to forward any correspondence from the HOA to you.