The Holy Grail of real estate today, is a relationship with a Bank that has a lot of REO properties, properties the Bank wants to unload as quickly, and as profitably, as possible. But, just like an ancient curse surrounding the Holy Grail, an REO listing has its down side too. At Hanson Law Firm, we guide brokers and agents through the mine field that an REO listing can represent.
There are several pitfalls, related to disclosure obligations. A BPO can be required by the Bank, but is it an obligation to give it to any prospective buyer? What about the other disclosures? No Bank has to fill out a TDS, but what if the Bank knows of other material facts that impact value?
In some instances a Bank asks the broker/agent to “clean out” a property after a foreclosure. One man’s junk is another man’s treasure. And all displaced borrower/owners feel that everything left behind after a foreclosure is “treasure.” How does a broker/agent protect themselves from claims of ‘theft” or “conversion?”
Consider the broker who is acting as a coordinator for handyman services, painters and/or carpet layers—people hired to spruce up the property to get it ready for re-sale. Is the broker acting as a general contractor – without a license?
Consider the circumstance where the broker/agent is told to leave a tenant in place – or where there was a pre-existing lease agreement with a tenant on “investor” property. Is the broker/agent now a property manager? Was that covered in the listing agreement?
How does a broker/agent deal with the MLS and listing agreements that have flexible compensation—something a Bank might require in order to give the broker the listing it he first place.
The list of hazards goes on and on. And, be clear, this is the new real estate market. For at least the next five years.
At Hanson Law Firm, our team of attorneys has also sold residential real estate for a living. The core team have been licensed 30 years—each. The “junior” guy has 15 years in grade. We know this business. We know how to cover your assets. We know how to help you get safe listings, close deals—and avoid trouble.
