Richard Foster ABR/M, CREN, CRS, GRI, RRG, SFR

How many times have you been representing a buyer, completed the inspections and found serious issues. Next, the deal falls apart because the seller refuses to deal with the repairs. So, the next thing you know, the property is back on the market, no biggie right?

Well… Did you ever wonder if the selling agent bothered to make sure this negative information on the property was disclosed to other buyers? Then comes the question, can you do anything about it if it was not passed on? Do you, as the buyers agent have the authority do make sure another buyer is not harmed due to a failure to disclose known damages?

Ethically?

As REALTORS, we have a duty to disclose all issues that we know about a property, I know I always do 100% of the time. Even when the sell does not want this information disclosed we are bound by our REALTOR code of ethics to make sure this happens. But how many listing agents actually make sure a report that has been provided to them from the first transaction, makes it to the next buyer?

Legally?

In the State of Nevada, I am required to disclose everything I know about a property. When as a listing agent I am given a copy of an inspection report, I now have “CONSTRUCTIVE NOTICE” and it can now be proven that not only did the owner know and now must disclose but so do I. In fact in the State of Nevada failure for a seller to disclose can result in “treble damages” (that is three times, PLUS the cost of the repairs). Failure for me as a licensee to disclose can cost me my licenece, a $10,000 fine, and a law suite that I will lose.

The HITCH – How does the next buyer find out?

If I am a buyer’s agent on the first transaction, that discovered the issue, and I provided that report and information to the seller’s agent… How do we know that was passed on to the next buyer? If I call the next buyer’s agent, I could be charged with interfering with the agency of another Broker and lose my license. If I wait for the transaction to close and then go to the buyer to ask if anyone disclosed the information, I have now allowed the buyer to be harmed and it will take time to resolve the issue.

The Answer?

Be ethical, disclose everything you know. I have had a number of deals with a number of issues, and by disclosing up front they never killed my deals a second time. Disclose it in the MLS, post the report (if allowed) in your MLS. When an offer or call comes in, talk to the other agent about the issue. Yeah, I know, OMG, an agent that picks up a phone and address an issue, how novel. Do what you can to address it up front.

How to fix this if you are that first buyer’s agent??? That depends on your local laws, talk to your legal counsel, BEFORE you do anything and make sure you are in compliance… Yeah, get them lawyers involved on the front end, and hopefully stop problems in the end.

Bottom line is, DISCLOSE, DISCLOSE, DISCLOSE… Make our profession a better one.

OK, what ever happened to the "good old days" of a loan guarantee or commitment? It used to be you went to a lender, provided all (and I mean ALL) your documentation (tax returns, bank statements, pay stubs, references, etc.). The lender investigated your background, credit, verified your bank accounts / employment, and even called your references to ensure they where real. Then the lender gave you a loan commitment up to a given purchase price with the requirement of a given down payment. You knew EXACTLY what was required and what your loan terms were from the gun.

Since the internet, buyers started to "SHOP" loans, go to 5, 10, 20 different brokers... Due to this fact the brokers had to change the way they did business and low ball the loans to hook ya in. Then things would change, hence the new GFE.

But lenders brought this on themselves to by changing the loan rules on the fly. How many times have your clients been just days or hours from loan docs and SURPRISE, you have some need for additional paperwork or POOF, the loan you had was just flat gone and the only way to close the loan was to agree to a different package all together and of course it cost the buyer more.

I say that HUD has the right idea, but the wrong rules. We need to go back to a simple loan commitment. Do all the work up front. The buyer should come to a lender, supply ALL documentations, the lender should do all the back end work, and then issue a commitment to loan that they have to stick to for say 90 days regardless of any changes. Then the buyer can find the home, do the contract, put down the money, do the inspections, sign the docs, and CLOSE THE LOAN...

SIMPLE...

But it will take the basic rules to change from in favor of the lender to the consumer. But alas, this will not happen because the lenders have all the power. We lose our homes due to decreased income and the COE's buy a new $10,000,000 house because the government spent billions to ensure they made a profit and got their bonuses.

Just my 2 cents, and that is just about all I have to my name.

I am selling some extra Electronic Supra lockboxes. The blue colored "Ibox".

It does not matter if you are not in my area, the boxes function the same everywhere. If you are not a member of the Greater Las Vegas Area REALTORS Association though, you will need to get your lockbox "programmed" by your local Realtor(R) association prior to using them. If you are a member of GLVAR, you will also need to sign off on a lockbox transfer form that I can email to you.

0 Please call me at 702.837.6686 (9:00 AM to 7:00 PM west coast time please) to set-up the transaction.
 

What is wrong with this picture???

What is to follow here is a pure RANT... It is meant to stir the pot, to get us talking, to share ideas... People, give your two cents, just don't write me with flame mail, I know where the delete key is...

This is the UNITED STATES OF AMERICA... This is our nation... This is a Nation of the people, by the people, and for the people... Where did we go wrong that we forgot the words of the Gettysburg Address??? Now America is a nation of corporate greed, by the Wall Street and Foreign investors, and for every unscrupulous nutcase that can put on a golden parachute.

I was an investor in the 80's and 90's... I lost my ass after 9-11 and had to file bankruptcy... I lost EVERYTHING... I am not proud of it, but it is that facts of my life and what I had to do, no one bailed me out... I just got my credit back to high 600's all these years later... Now... My income is down almost 70% and I am fighting to pay my bills and save my own home... What does it say when the politicians want to take care of Wall Street and ignore the common people on Main Street???

I AM PISSED OFF...

• WHAT ABOUT MY FAMILY???

• WHO CARES ABOUT THEM???

• WHO IS GOING TO SAVE THEIR HOME???

NO ONE!!!

So what do we do??? Here is a copy of the note I sent my Nevada State Senator Reed (yes the Majority Leader)

**** Start Message ****

With all due respect, STOP BAILING OUT WALL STREET and focus on MAIN STREET... Where is the help for the average American in this bill??? I am a REALTOR and my income is down 70% from when I purchased my house. I am facing foreclosure in the near future if I don't get some HELP... All the posturing is not helping me and my family. I can not qualify for a loan and do not want to lose my house...

HELP ME FIRST... Then consider bailing out the fat cats who caused this... If this bill does not include help for me and my clients I will make it my mission in life to make sure everyone who votes for it does not get my vote in the future and I will do all I can to stop others from voting for them too...

We need you to stay in our homes and you need us to stay in office…

**** End Message ****

We need to take back our country,

• We need to rebuild our crumbling roads and bridges...

• We need to create new jobs here and stop sending them over seas...

• We need to invest in new forms of energy...

• We need to get the heck out of OTHER PEOPLES BUSINESS...

• We need to focus on AMERICA...

What do you think $700,000,000,000 can pay for (yes that is how many zeros is in 700 BILLION)? What is we took the over $10,000,000,000 (10 BILLION) a month from the war and spent it on AMERICA???

PEOPLE... YELL... SCREAM... HIT... JUMP... FIGHT... PUNCH... Heck lay down in the middle of the street and wave your legs and arms in the air... It is time for a change... I say vote EVERYONE out of office, every last one (Republican, Democrat, Independent, Green Party, etc, etc, etc...)Send a clear message to future politicians... Speak up for us and our needs or get out!!!

OK, I will climb down off my soap box now... I welcome your comments now...

I really want to hear from you all regarding this post, please give me your two cents...

Ok, so... Who is at fault for this mess??? There are multiple winners in my book...

1. Wall Street - For buying loans that did not make any fiscal math... Ok, it did because the loan was originated, then sold, them sold again, then sold again... Until the loan reached the end servicer who used peoples pension funds and 401K funds to purchase the discounted loans at rock bottom prices.
2. The Actual Lenders - Our favorite villain the people that made all the loans that had no qualifications, no standards, and teaser rates to die for. They did not care what happened as long as they could sell the loans to Fannie Mae, Freddie Mac, or some other greedy investor.
3. The Loan Agents - These people are EVIL in my humble opinion. The goal of these wonderful people were to drive there own commissions higher and higher. The Lenders were offering big bonuses for every high risk loan they originated. That's right the actual loan agents were given more money in their pockets if they gave their clients BAD SERVICE and put them in high risk loans because they couple be sold for more money and more times.
4. The Builders - Sold to anyone that would pay their high prices and increase the stock holder profits. Almost no builders gave a half of a seconds thought about the fact they were selling to investors and no one was moving into the areas to create active vital neighborhoods.
5. Home Investors - The sharks were in the pool and tossing chum in the water as fast as they could... It did not mater as long as they could flip the house for a fast profit, and that drove up the prices past the real level and now homes can not be sold for what they were purchased at.
6. The Clients Themselves - There was so much greed that the home buyers were ready to take anything to get a taste of the American dream... Well they got the American nightmare...

You notice anything missing here??? That's right the REALTORS are just as much to blame if not most. How many agents bothered to take the time and talk to their clients and explain these loans and what they meant? How many agents told their clients that the home was priced well above the buyers ability to pay? How many agents told their clients that the home prices had been climbing and climbing and climbing and that what ever goes up, MUST come down???

I can take great pride in the fact that out of all the transactions I did in the last five years that I only had one client... Count it ONE (1) client lose a home to foreclosure... This is because I took the time and stood by my ethics and disclosed EVERYTHING... The one client that did lose the home purchased a home for $200,000 higher then they said they originally wanted and took an INSANE loan, both issues I told them not to do and they did anyhow.

I say look back at this mess and ask yourself, how much of this is YOUR FAULT??? And then change that in the future...