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Thoughts on Disclosure Regarding Real Estate Agency Relationship
Realtors should present the disclosure regarding real estate agency relationship as soon as practical.
Most California Realtors ask a buyer to sign the Disclosure Regarding Real Estate Agency Relationship when the buyer signs a purchase offer, but my philosophy lies more in accordance with the intent of the disclosure and we get it signed before showing property. On page two of the disclosure, in compliance with California Civil Code 2079.13 (k) and (i), in the fine print that nobody reads, it states: The selling agent shall provide the disclosure form to the seller as soon as practicable prior to presenting the seller with an offer to purchase . . .
If we are showing homes to a buyer, that’s a good time to get it signed, before we walk out the door. It establishes disclosure, although it does not confirm agency relationships. Agency relationships are confirmed in the purchase offer itself. Yet, we have a property manager with a real estate license in Sacramento who disagrees and has refused to enter sales in MLS under the selling agent’s name. This agent prefers instead to enter all the names of all the agents who have ever signed a Disclosure Regarding Real Estate Agency Relationship with this buyer.
MetroList has not yet enforced its own rules on one of my recent sales that say a listing broker needs to enter correct information from the selling broker. MLS Rules 10.1: Final sales shall be defined as recorded transfer of property. Final sales with the correct cooperating broker information and the correct sales information shall be entered into the MLS by the listing broker within three (3) business days of the final closing date.
The purpose of a Disclosure Regarding Real Estate Agency Relationship is to inform sellers and buyers that agents work in various capacities. An agent can represent the seller, the buyer, or both parties, under dual agency. It’s a disclosure, not an agreement. On the Realtor’s side, presenting the agency to buyers determines whether a) they trust, and b) they read. Further, it states: Throughout your real property transaction you may receive more than one disclosure form, depending upon the number of agents assisting in the transaction. The law requires each agent with whom you have more than a casual relationship to present you with this disclosure form.
Real estate law is such that ten agents could show a buyer property, yet only one agent is the selling agent noted on page 10 of the California Residential Purchase Agreement. Still, for no particular reason that I can see, we have a rogue Realtor who has refused to record the sole selling agent into MLS. That’s his story and he’s sticking to it. He says more than one agent signed an agency disclosure so he’s reporting all of those agents as the selling agents to MLS, regardless of the selling broker’s instructions. This strikes me as an odd situation that MetroList clerks appear reluctant to fix.
While I’m on a roll, I have a beef with the way the Agency Disclosure appears in ZIPForms. I have asked the California Association of Realtors (CAR) to consider changing the first field in its listing package in ZIPForms, but no representative from CAR has responded. I can’t be the only California Realtor to have noticed that when the template for the RLA loads into ZIPForms, the first document, the Disclosure Regarding Real Estate Agency Relationship, has such a teeny tiny field that it’s emphatically too small to read the seller’s name. It’s not my 20 / 20 vision.
Just goes to show that the end user might not have been considered when the fields were designed. They ought to test these things in the field with real people who use it, real Realtors. The fields change from blue to green with black lettering, which is also not easy on the eyes. Even if they just switched the order of the documents and made the Seller Representation of More Than One Buyer or Seller the first to load, it would help; that name field font is much larger.
One typo in the seller’s name on the Disclosure Regarding Real Estate Agency Relationship carries throughout the listing paperwork. It’s a PITA, but that’s the life of a Sacramento Realtor. Don’t get me started on agents who argue about how many agency disclosures a seller is required to sign . . .
Everything is Awesome in Sacramento Real Estate!
Everything is Awesome from the Lego Movie is worse than It’s a Small World at Disneyland — because at least with the latter it gave you hope for the world, some redemption for humanity — but both of those songs once they get stuck in your head end up on robo-tape, playing over and over. It’s a catchy tune, too. On the surface the lyrics are simple yet the song is super snarky, which is what makes it hilarious.
I would not be surprised if in Corporate America somewhere, some meeting planner decides that the song Everything is Awesome would make a great theme song for an annual convention. After all, everybody wants to be cool when they’re part of the team, right? If you step in shit, you just wear brown shoes, right? Ridiculous optimism rules the planet, doesn’t it? Who doesn’t love a glass is half full?
Perhaps the California Association of REALTORS will choose Everything is Awesome for its One Cool Thing campaign?
Actually, the best part of the Lego Movie was when Unikitty loses it and explodes in violent anger. Oh, sorry, that was a spoiler alert. My bad.
My husband said the Lego Movie was too smart for its own good, and I suppose there is an element of truth in that statement. I guess little kids really liked the movie but I suspect they came away with a much different story. Like Everything is Awesome and people are Special, which is not that much different than believing in the Easter Bunny or Santa Claus, so what’s the harm?
Well, I don’t know about you but I was pretty crushed when I discovered there was no Santa Claus, and no Tooth Fairy, either. I resisted the notion, gravitating toward the belief that my parents harbored some nefarious reason for deliberately shattering my illusions that Everything is Awesome!
On the other hand, I have learned throughout my 40 years in real estate how to do Everything is Awesome pretty well. That attitude, goofy as it may seem, helps me to sell Sacramento real estate. I do try to find the silver linings in situations because given the alternative who wants to slosh through mud every day? I try to perk up my listings to make them more attractive to buyers, which often includes parking an expensive foreign sports car right down the street and taking a photo for the “street view” in the listing.
An out-of-area client emailed this morning after I sent him the link to his new listing online. He mentioned that the last photograph in my series of photos seemed to be of a different property. I explained that was the view across the street, where everybody parks their Porsches. He wrote back to say maybe the area has gotten better since he last visited. See, it works!
Where Have All the Sacramento Short Sales Gone?
My topic today — where have all the Sacramento short sales gone — brings up a few musical notes rattling around in my brain. Do you remember The Jayhawks and the tune Blue? It starts out: where have all my friends gone, they’ve all disappeared. Turned around maybe one day, you’re all that is here. That’s the song that a lonely Sacramento short sale agent who had not developed any other business is probably singing right now.
I received a chart a few days ago from the California Association of Realtors, which I have inserted above. It clearly shows the direction of foreclosures known as REOs, the short sales in Sacramento and the traditional equity sales. The dark blue on the bottom is regular homes in Sacramento for sale. It’s just about squeezed out the short sales and foreclosures, which is excellent news for our real estate market. Short sales are in red and the light blue on top is foreclosure homes.
It seems like only a few years ago that short sales dominated the market, and I went back to check. Sure enough, if you look at the time frame from November of 2010 through January of 2012, you will see that 36% of the market was short sales. Even more dramatic, 45% of the pending sales were short sales, and 32% of all closed sales were short sales.
The reasons why short sales no longer dominate the market in Sacramento are simple. We’ve had a huge uptick in appreciation. Our median sales prices rose about 45% across the board from the beginning of 2012 (which was the official Year of the Short Sale) to the summer 2013, when price increases leveled off. On top of this, most people who had ever thought about doing a short sale have already closed a short sale. These were the people who bought or refinanced from 2004 to 2009.
Today, those short sale numbers for Sacramento County in January 2014 are . . . are you ready for this? We closed 100 short sales. One hundred short sales. Is this like 100 bottles of beer on the wall? I could sing that song, too. They breakdown like this:
- Active short sales comprise 10% of the market January 2014
- Pending short sales comprise 16% of the market January 2014
- Closed short sales are 11% January 2014
I pulled those statistics from Trendgraphix reports. Fortunately, although I managed to accrue quite a specialty in short sales and even wrote a book about short sales in 2009, I still sold regular traditional real estate, and I’ve sold even more regular homes last year. I sell in the range of 8 to 10 homes a month, in case you’re wondering, so I see a wide spread of activity across our four-county area and move a lot of inventory.
Can’t say I’m sorry to see short sales disappear. They aren’t really my friend or anybody’s friend. They’re a regular pain in the neck but a necessary component of real estate for some sellers. If you’re thinking about doing a short sale, it’s not too late as there are so many good rules about short sales for sellers today that were not in place 8 years ago. It’s not the stigma it used to be, and most sellers pay no tax and have no liability because they are lucky enough to live in California. Our rules are different than other states. I can help. Nobody has sold more short sales than I have over the past 8 years in this region.
If you want more information, call Elizabeth Weintraub at 916.233.6759.
Image: California Association of Realtors
50 Shades of Grey and the Real Estate Purchase Contract
Our California residential purchase agreement is not an iron-clad purchase contract.
Sacramento real estate agents primarily use purchase contracts developed by C.A.R. as agreements to buy a home in Sacramento. It seems that with every new case law, generally originated by some disgruntled buyer, the contracts are revised. There are also obvious revisions because the language is often confusing. In an attempt to be clear and speak with a human voice, lawyers can sometimes royally mess up legal contracts because they lose sight of their audience and get all hung up on courts and judges.
For this reason, no purchase contract is typically not without a way to sue somebody over something. There is no black-and-white language in a purchase contract, regardless of what a person might be led to believe. A person can read one paragraph that defines a situation, seems to set the boundaries, and then a second paragraph can bring that first paragraph into question. By the time you reach paragraph 27, the 14th paragraph might appear ambiguous. It’s one of the reasons we have an 8-page California Residential Purchase Agreement and Joint Escrow Instructions (revised April 2013), coupled with its sister, the two-page Buyer’s Inspection Advisory (revised October 2002).
I look at that and I think what? C.A.R. could not come up with one single revision for the Buyer’s Inspection Advisory over the past 12 years? Here, C.A.R., have another glass of grappa. Also, when I started in real estate (you kids get offa my lawn), we had a choice between a one-page or a two-page contract. In fact, at one point, I created my own purchase contracts and professionally printed printed my brokerage’s purchase contracts in 3-part NCR — which at that time seemed like a brilliant move but was probably one of the dumber things I have done in my life. Hey, I was in my early 20s, so I had an excuse for my ignorance, not to mention, the 1970s was like one long LSD adventure.
I am astonished that buyers today sign this paperwork without engaging in a minor heart attack. It would almost be better in some ways if an agent just put blinders over a buyer’s eyes, stuck a pen in her hand and directed her to draw squiggles as her signature. Don’t read, just sign, would be the message. Yet, we encourage our buyers to read the real estate purchase contract and they don’t understand a darn thing in it.
Don’t even get me started on ZIPforms and why there is no field for the ZIP Code, of all things. I have brought this matter up to ZIPforms, but it has not been changed. Nobody else probably cares but I realize it’s a problem because of short sales. The bank negotiators do not like the fact there are no ZIP codes carried forth from page to page. Why don’t the C.A.R. lawyers spend time looking at this situation and fixing it? They should also fix the listing agreement fields so subsequent addendums match.
Bottom line, if a buyer or seller wants to challenge a portion of the purchase contract, a smart lawyer will find a way to do it. There is nothing black-and-white about our legal system. It’s more like 50 Shades of Grey . . . in more ways than one. But don’t ask your Sacramento real estate agent to define the real estate purchase contract because we don’t practice law.
