Just got this email from CAR. Glad our industry is keeping an eye on things.
UNDISCLOSED SHORT SALE PAYMENTS MAY BE ILLEGAL
Undisclosed payments in short sale transactions, especially those paid Read more...
Just got this email from CAR. Glad our industry is keeping an eye on things.
UNDISCLOSED SHORT SALE PAYMENTS MAY BE ILLEGAL
Undisclosed payments in short sale transactions, especially those paid outside of escrow, may violate the law, including RESPA, laws against loan fraud, and licensing laws. Short sale agents have increasingly reported to C.A.R. about requests for agents and their clients to pay junior lienholders and others, oftentimes outside of escrow.
One common scenario is when a short sale seller's senior lender authorizes a payment of $3,000, for example, to extinguish a junior lien, but the junior lender demands that the buyer pays an additional $9,000 outside of escrow. Not only would it be risky for a buyer to pay outside of escrow, but concealing this additional payment from a federally-insured senior lender may constitute loan fraud, which is a crime punishable by 30 years imprisonment plus a $1 million fine (18 U.S.C. section 1014). Furthermore, omitting from the HUD-1 Statement any charges paid at settlement by either a buyer or seller may violate the Real Estate Settlement Procedures Act (RESPA) (Appendix A to 24 C.F.R. Part 3500). Depending on the specific circumstances, carrying out these payment requests may also violate other laws and regulations, and an agent's participation in the scheme may be subject to license revocation by the Bureau of Real Estate or other disciplinary action.
Agents and their clients are encouraged to file any complaints regarding fraudulent activities to the proper authorities, including the following agencies:
Attorney General's Office
California Department of Justice
800-952-5225 Phone
http://ag.ca.gov/consumers/mailform.htm
Department of Housing and Urban Development (HUD)
HUD Office of Inspector General Hotline (GFI)
800-347-3735 Phone
http://www.hud.gov/offices/oig/hotline
Federal Bureau of Investigation (FBI)
202-324-3000 Phone
https://tips.fbi.gov
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I was reading the Los Angeles Times this morning and came across an interesting article entitled “How to keep your job during layoffs”The article advises that the following be done:1. Anticipate what Read more...
I was reading the Los Angeles Times this morning and came across an interesting article entitled “How to keep your job during layoffs”The article advises that the following be done:1. Anticipate what your company needs.2. Keep up your skills.3. Stay positiveI started to think that the above also applies to life as a real estate salesperson.Anticipating what your company needs is important to stay relevant as an employee. How does this apply to life as a real estate agent? What about anticipating what your clients need? This is very important. What if a new listing comes on near one of your listings that is less than yours? Price reduction anyone? What about a new listing that comes on the market for one of your buyers? Staying relevant and timely is important no matter what you do.Keeping up your skills is also important. When was the last time you took a class or went to a seminar? Many local associations give free classes for short sales and REO properties these days. Take advantage of these and keep learning. My mom always used to say ‘In order to earn more you have to LEARN more.’Finally, staying positive always helps no matter what you are doing. Click here for one of my favorite videos about this.
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A recent article I read in the Wall Street Journal talks about a common problem homeowners face when attempting to refinance their homes.Today, bankrate.com shows an average 30 year mortgage rate of 5.03%. Read more...
A recent article I read in the Wall Street Journal talks about a common problem homeowners face when attempting to refinance their homes.Today, bankrate.com shows an average 30 year mortgage rate of 5.03%. Pretty killer deal, right? This is likely much lower than the current rate on your home loan and you may be tempted to refinance.The issue that at least a quarter of all homeowners will have in attempting to refinance is a lack of equity due to declining home values. This isn't such a big surprise - everyone knows real estate values have dropped and many owe more on their homes than they are worth.But what I liked about this article is that it shed light on the fact that if people were actually able to refinance it would have a positive impact on the economy. The following is the chain of logic I had while I was reading this article.If people can refinance their home, it becomes more affordable.If more people can afford their homes, there are less foreclosures.If there are less foreclosures property values will stabilize.If property values stabilize, this could stabilize other facets of our economy.If other facets of our economy stabilize, our country may recover faster.This is kind of a chicken-and-the-egg scenario. You can't refinance because your home value has dropped, but if banks refinanced borrowers this may stabilize home values.Of course, the problem of declining home values isn't something that appeared out of thin air. It's a purge of the gluttony that the real estate industry partook in from 2003-2006. The Wall Street Journal article closed by reporting that the Obama administration is looking into whether or not FHA can help refinance homeowners that don't meet the traditional loan-to-value requirements necessary to refinance.
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One of the nice things about being in real estate is we are generally treated as independent contractors for tax purposes and work hour requirements.
Legally, of course, the California Bureau of Real Read more...
One of the nice things about being in real estate is we are generally treated as independent contractors for tax purposes and work hour requirements.
Legally, of course, the California Bureau of Real Estate always treats us as employees of the broker. From 30,000 feet this means that the broker must reasonably supervise any salespeople working for the broker and the broker is generally responsible for a wrong done by the salesperson while the salesperson is acting under the scope and course of employment.
However, for tax purposes and work hour requirements - what I am attempting to talk about in this article - salespersons can be treated as independent contractors not employees. This generally means:
1. Salespersons are independently licensed.
2. Compensation is based on sales made, not hours worked.
3. There is a written contract that states that the salesperson will be treated as an employee for tax purposes.
Recently, due to the California budget crisis, there was a proposal to have real estate brokers withhold 3% from commissions paid to salespeople.
Yesterday, we got word from CAR that this is not going to be the case.
Real estate agents that are taxed as independent contractors get to keep all the commissions due them and the brokers are not required to withhold this 3%!
The world is once again in balance!
PS: Check out our YouTube video of this here
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One of the nice things about being in real estate in that we are generally treated as independent contractors for tax purposes and work hour requirements. Notice I said
Of course, legally, the California Read more...
One of the nice things about being in real estate in that we are generally treated as independent contractors for tax purposes and work hour requirements. Notice I said
Of course, legally, the California Bureau of Real Estate always treats us as employees of the broker. From 30,000 feet this means that the broker must reasonably supervise any salespeople working for the broker and the broker is generally responsible for a wrong done by the salesperson while the salesperson is acting under the scope and course of employment.
However, for tax purposes and work hour requirements, salespersons can be treated as independent contractors. This generally means:
1. Salespersons are independently licensed.
2. Compensation is based on sales made, not hours worked.
3. There is a written contract that states that the salesperson will be treated as an employee for tax purposes.
Recently, due to the California budget crisis, there was a proposal to have real estate brokers withhold 3% from sales commissions.
Yesterday, we got word that
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I just got this email from our Government Affairs Director. Subject: IMPORTANT Message from NAR President Charles McMillan From: NAR_xxxxx_xxxxxxxx@realtors.org Date: Tue, 27 Oct 2009 12:24:19 -0400 TO: Read more...
I just got this email from our Government Affairs Director. Subject: IMPORTANT Message from NAR President Charles McMillan From: NAR_xxxxx_xxxxxxxx@realtors.org Date: Tue, 27 Oct 2009 12:24:19 -0400 TO: State and Local Association Presidents, Executive Officers, Government Affairs Directors, Communications Directors FROM: NAR President Charles McMillan, NAR Government Affairs Senior Vice President Jerry Giovaniello DATE: 27 October 2009 RE: Tax Credit Extension and Expansion The United States Senate is expected to vote, later today, on a bill to extend Unemployment Insurance benefits. This bill will contain the Dodd - Lieberman - Isakson Amendment to Extend and Expand the $8,000 First Time Homebuyer Tax Credit. The Extended and Expanded Tax Credit will contain the following provisions: Amount: $8,000 Eligibility: ALL HOME BUYERS (Step-up buyers will have to have lived in their current home for SEVEN* years to be eligible) Income Limits: $125,000 for single filers/$225,000 for joint filers Time Frame: December 1, 2009 to April 30, 2010 plus 60 Day extension if binding contract is in place by April 30, 2010 *The 7 year ownership requirement is designed to lower the "score" or cost of the tax credit. This is still open to change. The Congressional Budget Office is going to "score" the cost of 3 year and 5 year requirements. We are continuing to push for step-up buyers to be required be in their current home for three year period. NAR will be monitoring the progress and any potential changes to the bill. NAR will send out a notice when the legislation is voted on tonight--regardless of how late into the night or early into the morning the debate continues.********************Let's keep our fingers crossed that this passes! Would definitely help!
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I received an email from a student today asking if I thought he should work on a team as he starts his real estate career. This is an individual decision and is one that should not be taken lightly.One Read more...
I received an email from a student today asking if I thought he should work on a team as he starts his real estate career. This is an individual decision and is one that should not be taken lightly.One of our instructors, Chris Montague, started in the business and worked on a team with a top producer. He says that he learned sales skills and discipline that he would not have learned if he started on his own. I have uploaded his mentor Robert Adams' interview with us to YouTube. You can check it out hereI am blogging about this because I suspect that some of you may be considering working on a team as well. Before you make this decision, I would recommend reading this article that does a good job of pointing out the pros and cons of the team model.
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Owning a home is a big piece of the puzzle known as the American Dream. Despite this, there is a group of people who believe that owning a home is a bad decision no matter what the market is doing or Read more...
Owning a home is a big piece of the puzzle known as the American Dream. Despite this, there is a group of people who believe that owning a home is a bad decision no matter what the market is doing or no matter who you are.I had an agent that I used to work with that was consistently making over $300,000 per year and - rumor had it - didn't own a single piece of real estate. Not even his principal residence.People that maintain this position typically point to the fact that renters don't have to make repairs to a home and are free to move whenever they want. They also note that the responsibilty for paying for utilities, property taxes and insurance rests with the owner not the tenant.All this would be fine except for one fundamental point - control. When I first got into the real estate business my broker gave me an article about a woman that had been living in Newport Beach for years. Her rent started at $400.00 per month or thereabout. Over the years she found herself in a position where her rent had jumped up so much that she could no longer afford to live there. She was forced to move out of an area that she had planted roots in for much of her life. The irony of this story is that if she would have just bought the property - my recollection about this story is that she was in a position to do so at some point during her tenancy - it would have been completely paid off. Life changing decisions like "Should I rent or buy?" should not be taken lightly. I get that. I also understand that there is no one size fits all solution to anything.I just think it's tragic when we get in our own way.
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Jeff Davi is the current Real Estate Commissioner for the California Bureau of Real Estate. He is a licensed real estate broker and a graduate of St. Mary's College in Moraga.
The Real Estate Commissioner Read more...
Jeff Davi is the current Real Estate Commissioner for the California Bureau of Real Estate. He is a licensed real estate broker and a graduate of St. Mary's College in Moraga.
The Real Estate Commissioner is the head of the Bureau of Real Estate.
The DRE adds "Commissioner Davi previously served as a Director for the California Association of Realtors and President of the Monterey County Association of Realtors. He also served as president of the Economic Development Corporation of Monterey County, was co-founder of the Affordable Housing Steering Council of Monterey County and was on the founding board of directors of the Monterey County Visitor and Convention Bureau."
He was appointed on October 6, 2004.
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As part of our new website I had the good fortune of interviewing three groups of people recently. The first group was comprised of current Adhi students.The second group was a group of students who had Read more...
As part of our new website I had the good fortune of interviewing three groups of people recently. The first group was comprised of current Adhi students.The second group was a group of students who had taken classes with Adhi Schools and passed thie state exam within the last one to six weeks.The last group was comprised of industry veterans. A common theme in nearly all the interviews was that people taking the classes and in the real estate industry want to take control of their own destiny and put their future in their own hands.Stay tuned for the videos.
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