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When is Disclosure too Little, too Much or Just Right?
Real estate agents walk a fine line regarding disclosure in meeting their fiduciary responsibility to their clients. The question is when is disclosure too little, too much or just right? The truth is that there are no absolute answers, just common sense practices that an agent can follow to best serve their client and protect themselves.
We recently took a look at the C.L.U.E. report which has been available for approximately the last 8 or 9 years. Re-Insider finds this report to be a great example of the variety of information that can find its way into today’s real estate transactions.
The first question that should always be looked at when vetting disclosure information is, is there a legal requirement in the California Civil Code for a particular disclosure of information? If there is, for example the NHDS or TDS in most residential transfers, then it has to be in the disclosure information to the buyer.
But what about non legally required reports, C.L.U.E. being a good example? In the case of C.L.U.E. reports being provided, this grew simply from CAR adding a question to their SSD form which was then incorporated into the SPQ on page one. This is a form that has grown over the years to 10 questions in which a seller is advised, by CAR, to disclose to a prospective buyer of their residential property. The question on the CAR SPQ regarding insurance claims is simply “Insurance claims affecting the property in the last five years”— answer to be given as simply yes or no.
So how did the additional information contained in a C.L.U.E. report, not requested or required, come into use and does it potentially pose a liability to the agent? The quick answer to the first question for coming into use is money. What was once a simple yes or no answer from the seller is now a $19 + report that companies make money selling into the transaction.
As far as the question of liability to the agent, if the additional information in the C.L.U.E. report has a mistake in it, as happens from time to time and causes some of the problems discussed in the previous article, then who takes responsibility? The most common response from agents is the company that sold the report to me of course. But as it turns out this is not necessarily the case.
Why you ask? The C.L.U.E. report comes with no guarantee or indemnification from LexisNexus, the company that produces the report. The resellers, usually disclosure companies, all have a third party exclusion in their limits of liability that state they are not responsible for mistakes in information provided to them from outside sources.
This can leave the real estate agent or brokerage financially responsible for the C.L.U.E. report if there is a problem. The message in this for agents, using C.L.U.E. reports in this case, is to look at your disclosure procedures with an eye towards not only meeting your fiduciary duties to your clients, but managing your own risk. With that in mind, with the case of C.L.U.E. reports the best answer may be to use the CAR SSD form.
What do you think of this situation? Are you in favor of regulating disclosure companies?
RE Insider read more here:
http://re-insider.com/2014/07/23/when-is-disclosure-too-little-too-much-or-just-right/
Million-dollar home sales hit seven-year high in California
LA TIMES | by Tim Logan
The number of homes that sold for $1 million or more in California hit a seven-year high in the second quarter, and sales north of $2 million reached a new record.
That’s according to new figures from San Diego-based DataQuick, which tracks local housing markets in the state. They found million-dollar-plus sales grew at a 9.1% clip statewide compared with last year, while sales overall fell 7.4%.
Several factors are driving the high-end liftoff, market-watchers say…
READ MORE HERE…
14 Sneaky Mistakes that can decrease your Homes Value
https://shine.yahoo.com/at-home/14-sneaky-mistakes-decrease-homes-value-162300296.html
1. Choosing a crazy exterior color
“Curb appeal is huge, don’t pick a paint color that isn’t common in your neighborhood or doesn’t fit the style of your home.” -Pam Baldwin Foarde of Al Filippone Associates/William Raveis
2. Landscaping without a plan
“Planting trees too close to the house or driveway – without considering how big they’re going to get – creates major problems later. Roots can cause breaks in the pavement that might raise your homeowners insurance or make it hard for you get a policy until the problem is fixed. Before you plant anything, think about how it will look in twenty years.” -Chris Winn of Kellar Williams/Advantage Group
3. Ignoring your entryway
“Having a front door lock that doesn’t work properly or hardware that looks old and pitted makes buyers uneasy and puts them on high alert for what else has been let go in the house.” -Donna Marie Baldwin
of Coldwell Banker
Continue Here… https://shine.yahoo.com/at-home/14-sneaky-mistakes-decrease-homes-value-162300296.html
Southern California median home price jumped to $400,000
Home prices in Southern California are at their highest level in six years, according to new data, though those gains may be taking a bite out of sales volume.
The median price of a house sold in Southern California rose from $383,000 in February to $400,000 in March, the market’s highest level since February 2008, according to San Diego-based DataQuick, which tracks real estate data.
The figure is up 15.8% from the same month last year and is the first noticeable increase since the torrid run-up in prices last spring and summer.
At the same time, the number of sales fell on an annual basis for the sixth straight month as investors and cash buyers pull out in the face of higher prices, and more traditional home buyers hesitate to jump in. There were 17,638 homes sold in DataQuick’s six-county Southern California’ region, down 14.3% from last March and the second-lowest total for the month — the start of the key spring home-buying season — in nearly two decades.
“Southland home buying got off to a very slow start this year,” said DataQuick analyst Andrew LePage. “We see multiple reasons for this: The inventory of homes for sale remains thin in many markets. Investor purchases have fallen. The jump in home prices and mortgage rates over the past year has priced some people out of the market, while other would-be buyers struggle with credit hurdles. Also, some potential move-up buyers are holding back while they weigh whether to abandon a phenomenally low interest rate on their current mortgage in order to buy a different home.”
The data also show how the recovery is being felt differently at different segments of the market.
While prices have climbed fast on lower-priced homes, the number of sales has fallen sharply, suggesting a lack of homes for sale and buyers who can afford them. Sales of homes for less than $500,000 dropped 26.4% from this time last year…
Continue HERE…
Condo Prices Up in L.A.
The price per square foot of a new condo downtown climbed 6% in March from February to $656, according to a new report from the Mark Co., which tracks downtown real estate.
The number of condos for sale, meanwhile, fell sharply as buyers snapped up units at downtown’s lone new condo building: the Barker Block on Hewitt Street.
At month’s end, Mark said, there were only 27 new units for sale downtown, and the inventory of existing condos for sale would burn off in less than three months — half of what’s considered a healthy supply. Prices for condo resales slipped in March but remain 23% higher than a year earlier, at $534 per square foot.
“There is a dearth of condos,” said Alan Mark, the Mark Co.’s president. “People are not even selling existing condos because there’s no place for them to buy.”
The tight for-sale market contrasts sharply with a boom in apartment building.
After the housing market tanked in 2008, some downtown projects that had originally been designed as for-sale switched over to become rentals. And big institutional investors, desiring a safe, stable return, shifted their money into high-end apartments, helping to fuel a building boom that has 5,000 rental units now under construction, and 3,000 more units approved by the city.
That surge in rental supply may lead some apartment owners to flip their buildings back to condos, but Mark said he doesn’t see that happening yet. The numbers don’t quite pencil out, and the wounds from the downturn are still too fresh.
“There are definitely people circling, trying to figure out does it work and do they have the wherewithal to put 200 or 300 units on the market for sale,” he said. “Some developers still feel the scars of the recession.”
As for new construction, that could happen — there’s one 38-story condo tower in early development on 9th Street north of Staples Center — but it’s going to take a while.
“To build any building that’s sizable, it’s 18 months to two-and-a-half years to deliver,” Mark said. “You just don’t see this thing changing soon.”
Keller Williams LA Harbor Market Share: March Update
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