Duane Gomer is a well-known Real Estate Educator and distributes a nice newsletter for the real estate industry. Just thought Id pass along some excerpts of Duane’s newsletter for your review. (You can see Duane’s contact information at the end of this article if you’d like to subscribe to his free newsletter.)
You can download a PDF version of it here: Duane-Gomer-Newsletter-20150416
FROM DUANE GOMER:
THE CalBRE STATUS SHEET
I strongly recommend that Associates check their Status Sheet regularly. You might find some Agency error, and people checking the files would think that you had been disciplined in the past.
One point about the files: For licensees who have had their license a long time, the date of licensing will say, “Unofficial-taken from secondary records,” and many times they are wrong. How can this be? I have been told that records in the deep past were lost, so they have tried the best they can.
My date for obtaining the Broker License on my status sheet is 3/13/76. That has to be wrong because I started my own company around Labor Day in 1963, and I had my gotten my license many months before that.
Also, when you check a company and it lists how many licensees are under that license, the number includes only Sales Associates. Broker Associates are not listed under their companies.
Finally, I do not understand why licensees do not print out their license status and show it to new clients. The clients would see that you are really official, and no one else is doing it so you would look good. If everyone started doing this, it would eliminate a lot of the problems of the public being cheated by unlicensed individuals. A large percentage of Real Estate Fraud comes from this area.
Let’s make our industry more professional and more respected. We used to be ahead of only car dealers. Now, we are ahead of Congress, Telemarketers, Loan Modifiers and others.
IMPORTANT Q/A FROM STEVE DURINGER, MY ALWAYS NUMBER ONE EVICTION ATTORNEY (Former student many years ago)
Steve is a recognized authority on Real Estate Matters, especially on Evictions and Collections. Fortunately, I have not had many Evictions in the past years, but when I did I went to Duringer Group. The last one some time ago was a Hall of Fame Deadbeat, who knew the rules. It was a time of high vacancy so I lowered the standards a little, but increased the Security Deposit to the Max, so there was no financial damage. The tenant answered the Complaint, and discussed the “not everyone was served” defense. Steve’s Associate moved quickly and got the Move-out order. Due to the problems with the tenant the Sheriff came by when we were taking the property back. It was a mess, but everything was done fast.
For years I have read the Newsletter that Steve sends out monthly. If you want good PM advice, go to his website and subscribe to his Newsletter and read back issues. The site is www.duringerlaw.com. a sample question from the most recent offering is included here.
I am one of three on-sight managers for a large complex. Recently, I had a couple enter the manager’s office and request an application to rent a unit. I had several vacancies, but the prospective tenants looked as if they had not bathed in a week. Also, as they drove up to the manager’s office, their Ford Fairmont looked like it was on its last leg, and filled the parking lot with smoke. I imagined that the car would break down as soon as they moved into the unit. Needless to say, the other residents would be up in arms if I let these two characters into the complex. Was I correct in refusing to give them an application to rent?
No. Provided you have a unit available for rental, you should provide an application to any adult requesting one. Upon receipt of a completed application, and your required tenant-screening fee, you should qualify them as you would any other applicant. Often times, fair housing ‘testers’ pose as physically unappealing or objectionable individuals intentionally to test your response. Subjectively dismissing them out of hand based upon their appearance would give rise to a fair housing complaint based upon arbitrary discrimination. The next time you meet, the ‘down and outers’ will most certainly be well dressed and articulate.
IMPORTANT SOURCE OF GREAT ARTICLES AND IT IS FREE, FREE, FREE
Each work day I get a list of articles from Realty Times. These are from writers from many areas of expertise with a wide range of useful and interesting information at no cost. To subscribe, simply go to www.realtytimes.com and click on the Subscribe to Header. Each morning you will get a list, and you can choose what you want to read. Also, the Web site has a long list of previous articles by topic.
For example: A friend of mine, Bob Hunt of the San Clemente Hunts, has just written an article on a recent ruling on an Arbitration Case. Very interesting. BTW, Bob was an Orange County Register Contributing Columnist for many years, a long-time expert on CAR Forms, successful Real Estater with his wife Nancy, author of an excellent ethics book, an ex-Marine, and a fisherman. A Renaissance man and a friend.
His most recent article is entitled, “Arbitration Award Upheld”, which discusses a case where an Arbitrator’s decision was questioned. The courts ruled in favor of the Arbitrator. This was a case between Real Estate Brokers concerning commissions, but the theory could apply to any type of case, such as consumer-consumer, consumer-brokers, lender-escrow, etc. No spoiler here, read his article on my Blog at http://bit.ly/1ct0BVE .
Remember, on the CAR Residential Purchase Agreement there is a question, “Do you agree to Arbitration?” Should you? Would you? This is a question that all Buyers and Sellers should know before they start looking to buy, list, sell, lease or rent. Get some professional advice now. Real Estate Licensees should not be giving advice on this topic unless they are qualified to do so, such as being an attorney.
BTW, in my last real estate transaction, I checked off “Agree to Arbitration” and so did the seller. Before I do this again, I want to get some different opinions. I do remember Bob Bruss, the famous RE Columnist, always telling me, “Do not give up your day in Court.”
Another interesting factor: In a Residential Lease or Rental, Arbitration is not an option. Why? State Regulations state that this is not legal. Questions on this, go to www.DCA.ca.gov.
Want to read the entire Bob Hunt article? Go to my Blog at http://bit.ly/1ct0BVE and you will find this plus many other Bob Hunt articles.
SAVE TIME AND MONEY AND WORRY IN REAL ESTATE NEGOTIATION
Never have understood the offer writing procedures of Real Estate Home Sellers. First, the Residential Purchase is now ten pages. Many senior-senior citizens will quickly tell you, “When I started in the field, the Purchase Agreement was only one page, and most of that was blank lines.” Yes, that is true, as I was there.
The Agreement is now 10 pages, and there are so many accompanying addendums the process of filling out an offer and reading it closely, takes so much time. Then, if it is printed out, we are killing so many trees.
Now, back when I was a probie and selling apartment houses, we didn’t even do the one page form. We did a Letter of Intent. Simply, quick, stated most of the important facts, and if all the parties agreed, then we would proceed to “Contract.”
Some buyers make several offers before finding nirvana, and some sellers receive numerous offers before getting serious. What are the important facts? Price, down payment, loan information, length of escrow, possession, and so forth.
Let’s say that I have listed a home at $350,000 (well-priced) and I have a $200,000 existing loan. Another Broker has a buyer who just completed one of the One Day Seminars To Buy Property For Nothing Down And Get Money Back Out Of Escrow. The neophyte offers $195,000 with Nothing Down. Okay, so I am being facetious. Let’s say that on the first day of a listing, I get an offer of $280,000. I believe that I probably wouldn’t even take the time to counter that offer. The Outside Broker had to fill out everything.
Next along comes a nice couple with an Agent who is experienced and is a CRS meaning that they are experienced and successful. They make out a Letter of Intent, which is about one page long. The offer is $335,000 with $80,000 down, a 30 day escrow with possession and Earnest Money would be $15,000. Also, they want the three bedrooms painted, and the back landscape improved and a termite report with all corrective work done.
I counter offer using a CAR Counter Offer Form and say that I will accept $345,000 with a 60 day escrow and agree to the other three items. They counter at $342,500 and accept the 60 Day Escrow request. At this time the offer is prepared with all those terms and all the conditions.
Over the 50 years that I have observed CAR, I have never seen a Letter of Intent produced by them. This, I just do not understand. I have found one. It is prepared by Fred Crane, and long-time people will remember him as the winning Attorney in the “Wellenkamp” from the late 70’s. To read it, click here http://www.firsttuesday.us/course/Downloads/186.pdf
Notice the phrase: Owner and prospective Buyer agree this letter is not an offer to enter into a written purchase agreement to sell the property, it is not a written purchase agreement to acquire the property, and it is not the grant of an option to buy the property.
The last two rental homes that I purchased in Orange County, I used a Letter of Intent with me as buyer and Broker (still have old license number 257862) it worked smoothly, and the selling Brokers were Coldwell-Banker. Saved me a lot of time. I even had another term that stated the sellers would cooperate with a 1031 Exchange.
BTW, the Agents should fill out the Agency Disclosures at the time the LOI is prepared, because “You have more than a causal relationship” when you are preparing a Letter of Intent.
2nd BTW, when I would present an offer, I would not take a check; I would take a personal note signed by the buyer. The real money came with the RPA. Thinking of trading one rental for two rentals as equities have increased, and I assure you that I will be submitting Letters of Intent. See you at closing.
COULD YOU PASS THE STATE REAL EXAM?
The California Real Estate Reference has some sample questions to illustrate what the exam covers.
Q and A Analysis
The following analyses illustrate the proper approach to exam questions:
Question: Under no circumstances may a broker:
(a) receive a commission from both buyer and seller
(b) appoint a subagent
(c) misrepresent material facts
(d) sell the principal’s property to a relative.
(a) is incorrect. A broker may receive a commission from both parties provided both buyer and seller have knowledge of the arrangement.
(b) is incorrect. A broker may get prior consent from the principal to appoint other brokers as subagents to cooperate in selling the property.
(c) is correct. A material misrepresentation is a violation of law.
(d) is incorrect. The broker may sell to any purchaser provided the principal has full knowledge.
Question: A valid bill of sale must contain:
(a) a date
(b) an acknowledgment
(c) the seller’s signature
(d) a verification.
(a) is incorrect. Although a date is advisable, it is not required.
(b) is incorrect. The law does not require an acknowledgment.
(c) is correct. A bill of sale is an instrument which has been executed (signed) and delivered to convey title to personal property.
(d) is incorrect. Verification means to confirm the correctness of an instrument by an affidavit or oath. Verification may be desirable but not required.
Question: A valid deed must contain all of the following, except:
(a) the signature of the grantor
(b) a granting clause
(c) an adequate description of the property
(d) an acknowledgment of the grantor’s signature.
(a) is a correct statement. The grantor is the person who conveys title to another and without the grantor’s signature title will not pass.
(b) is a correct statement. The granting clause is necessary to evidence the intent of the grantor. CHAPTER TWO 30
(c) is a correct statement. The property being transferred must be described so the grantor knows exactly what property is being conveyed to the grantee.
(d) is the incorrect statement. An acknowledgment is necessary for recordation but is not required to make the deed valid.
Also, you can check another 50 questions in this Reference Book. Just click this link http://www.dre.ca.gov/files/pdf/refbook/ref02.pdf scroll down. You will understand why you need a Professional Crash Course License Preview like The One from Duane Gomer Education.
ALERT TO MORTGAGE LOAN ORIGINATORS AND FUTURE MORTGAGE LOAN ORIGINATORS
Some time ago the Federal Agency handling the tests for MLO’s changed the format so that prospects could take a UST exam (Uniform State Test). In other words, one test instead of the separate State and National test that present California MLO’s completed. Anyone applying for an endorsement to become an MLO in California will still be taking both tests.
Forty States have now converted to the new UST. California is obviously one of the ten holding out. Why? I do not know.
Action may be coming. On March 4th a NOTICE OF RULEMAKING ACTION was distributed by the Department of Business Oversight concerning this topic and Senate Bill 1459.
The DBO is requesting comments on this Notice with a deadline of May 4th, 2015. To read the Notice connect to this link: http://www.dbo.ca.gov/Licensees/Residential_Mortgage/pdf/06-14%20Notice%20(OAL%20Revised).pdf
Then, make your comments. FYI, I think it is an excellent idea. More applicants should pass the exam and MLO’s would not have to pass exams for the other 40 states. Time to move, so comment.
INFORMATION FROM THE 2015 NAR HOME BUYERS AND SELLER GENERATIONAL TRENDS (3/11/2015)
For the second consecutive year this study found that the largest group of recent buyers was the millennial generation, those 34 and younger, who composed 32 percent of all buyers. Generation X, 35 to 49, was closely behind with 27 percent.
Regardless of age, the buyers used a variety of resources in searching for a home with Internet (88%) and Agents (87). Millennials were the most likely to use an agent, applications, and search engines. General X buyers were the most likely to use an open house.
Millennials also used agents to purchase their home at a higher share (90%) than all other generations. Generation X was the largest share of the sellers at 27%. Sellers moved a median distance of 20 miles with boomers and the Silent Generation moving further distances and downsizing to a smaller home (can anyone say Grandchildren). I was disappointed to know that I am in the Silent Generation (69-89). I thought that I was of the Greatest Generation.
60% of the sellers found an agent through a referral by a friend, relative, neighbor or used an agent from a previous transaction. 83% are likely to use the agent again or recommend them to others. (BTW, another NAR Survey stated that a much lower percentage of clients used the same agent again, because the agent did not keep in touch).
Lots more information in the report at http://www.realtor.org/news-releases/2015 See you at the closing.
OVERALL MONEY WASTERS ACCORDING TO AN AARP INFORMAL POLL
Now, we all know that AARP would never lead you astray unless they were selling you some AARP product. This poll asked, “What do you see as big money wasters in your household budgets?”
There were in no particular orders: Women’s Hand Bags, Season Tickets, Kid’s Toys (especially anything with batteries), Specialized Kitchen Appliances (ice cream makers, lemon juicer), and finally Used Books.
I agree with them on all but the Used Books. (I have no comment at all on Women’s Hand Bags and Shoes). I love my one year old Grisham Books from RSM Library for $4.00. The poll takers say that they constantly buy used books at yard sales, etc. and never read them. Is that your point?
I have enough books now that I would never have to buy another the rest of my life if I read 12 hours a day, but that does not mean that I will not read the next one I see. Or even worse, I have already read it and don’t remember. However, there will always be the electric moment when I find the real “memory maker” for $2.00. Yes, I know that this is a problem from never having enough books when I was young.
What are the big money wasters in your life? Mine, hand-held tape recorders, etc., and I am truly addicted to eating lunch at an outstanding restaurant.
SIMPLE REAL ESTATE MATH QUESTION FOR THE MATH PEOPLE
Last week I had an extremely high amount of comments on a math question that were just numbers on a page. Let’s do a math question today based on real estate and a different sort of listing called a net listing.
On a net listing the seller says that they want to realize a certain amount on the sale, and the agent keeps everything above that amount. Our example: Nancy Lee wants to sell her property and realize $400,000 and have enough extra money to pay closing costs of $10,000. If the agent Elijah Santini wants to receive a 7% commission on the selling price, what should the listing price be? Work it and then check your answer below.
First, let’s discuss the Net Listing. Are they used very often in the Real Estate Market? No. Are there many problems? Yes. Many. There always seems to be an argument, and most Brokers do not allow their Agents to take these listings. Many times the property sells for a large amount over the listed price making the Agent happy and the Seller not so happy claiming the net price was too low. If the property sells for just a few dollars over the net price, the seller is fine, but the Agent is not happy as they worked many hours for little money. These are law suits waiting to happen.
The answer to the problem is: The net price of $410,000 would be 100% minus 7% or 93%. $410,000 divided by 93% equals $440,860 leaving the Agent a commission of 7% times $440,860 or $30,860.
TRIVIA TIME: CATEGORY – 60’s & 70’s Music
Read the lyrics and then answer three questions about each song.
Name of the song, who wrote it and who had the most “famous” recording.
- I recall the yellow cotton dress, foaming like a wave, on the ground beneath your knees, the birds like tender babies in your hands, and the old men playing Chinese checkers by the trees.
- Did you write the book of love, and do you have faith in God above, if the Bible tells you so? Now do you believe in rock and roll? Can music save your mortal soul? And can you teach me how to dance real slow?
- One day up near Salinas, Lord, I let him slip away, he’s lookin’ for that home, and I hope he finds it, but I’d trade all of my tomorrows, for a single yesterday, to be holding Bobby’s body next to mine.
- MacArthur Park, Jimmy Webb, writer, Richard Harris #1 artist although Donna Summer’s is the best. 2. American Pie, Don McLean, writer Don McLean, singer.
- Me and Bobby McGee, written by Kris Kristofferson and Fred Foster, originally performed by Roger Miller, most famous recording by Janis Joplin.
Song 1 – In what city was the MacArthur Park?
Song 2 – Whose wife was the “widowed bride” in the song?
Song 3 – Where was the couple busted flat?
Song 1 – LA at Wilshire and Alvarado. Webb wrote the song 45 years ago and he went to the Park daily and actually saw cakes melting the rain. This was when he went there to watch his ex-girlfriend get married and hid in a shed and it rained.
Song 2 – Buddy Holly’s
Song 3 – Baton Rouge
Final query: Which song is the longest in its original version and how long?
American Pie is 8 minutes, 33 seconds, Mac Arthur Park is 7 minutes, 20 seconds, and Me and Bobby McGee is 4 minutes and 2 seconds. American Pie is the only song that I have ever done Karaoke, and I didn’t realize how long it is until about 4 minutes into it.
Other songs written by McLean include Vincent, (Starry, Starry Night – about Van Gough) and I Love you So (great by Elvis), Crying (written by Roy Orbison and McLean made it a big hit), Killing Me Softly With His Song was written about him by Lori Lieberman and Roberta Flack made it a number 1 hit.
INCREASING PRODUCTIVITY IN YOUR OFFICE?
Periodically, my General Manager and IT Person have mentioned that it would be a good move to purchase monitors so each staff member had two monitors. I listened, but my reasoning centered on 9 times the cost of a monitor, and I would not know what people would do with two monitors.
One bright and shiny Monday morning last week I walked into the office and on every desk was two monitors. I do have senior moments, and I do give Gail a lot of leeway, but I didn’t remember “really” discussing the purchase.
Gail’s husband works at a large progressive company in the Tech Field. His company had a new program to replace their recently purchased monitors, and we received enough for one more for everyone. Outstanding and the price was so right. Thank you to Gail’s Husband!
A couple of days ago I asked the staff individually what they thought of having two monitors. Their answers included outstanding, more efficient, more productive, faster, less waiting time, can have more apps open, appreciated, and so now I am a big supporter of office staff having two monitors. I have to get a second one for my home desk, but I still don’t know what I would do with it.