Preparing to Write the Listing Agreement (3 hours)

Transcription

1 Preparing to Write the Listing Agreement (3 hours) Objectives: To educate licensees in the fundamentals of preparing to write and present the exclusive listing agreement. To review essential pre-listing issues and information to gather To understand required disclosures necessary when taking a listing How to prepare a seller s comparable market analysis Course Outline Listing Environment Overview 5 Min Considerations Verify client identity 10 Min Obtain relevant documents 5 Min Trusts and Power of Attorney 5 Min Probate and Bankruptcy 10 Min Liens, Lis Pendens, Judgements, etc. 10 Min SIDs & LIDS, Schools 5 Min B R E A K 10 Minutes HOA Considerations 10 Min MLS and Tax Record Data 10 Min Working with Investors 10 Min What about Tenants? 10 Min The Preliminary Title Report 10 Min B R E A K 10 Minutes Agency Disclosures 10 Min Preparing the Seller s CMA 10 Min SRPD Disclosures / Current Disclosure Issues 15 Min Writing the Contract Putting it Altogether 15 Min

2 Preparing to Write the Listing Contract CE- Forrest L. Barbee, Instructor Verify each individual on title. Match names to those shown on title at the Assessor s site. Make copies of identification cards for each individual on title or for who will sign. Get copies of the relevant pages from trust documents, LLC documents, etc. to verify who can sign for the LLC, Trust, etc. Is there a Durable Power of Attorney in play? If so, provide it to Title/Escrow and ask how they want to proceed. 1

3 Is there a Specific or General Power of Attorney in play? If so, contact Title/Escrow as they will most likely want a Special POA executed just for this transaction. Is there and bankruptcy attorney involved? If so, contact them as you could end up losing this listing anyway. Is this a probate listing? If so, who has the power to sell? Be sure to get copies of their documents before listing. Review the most current Grant, Bargain, and Sale Deed for any Deed Restrictions, such as SNWA water conservation covenant restrictions. Is this Guy on the Other Side of Your Transaction? Go to the Clark County Recorder s site to check for lis pendens, judgments, NODs, tax liens, HOA liens or defaults, and any other recorded liens that will need to be cleared to provide clear title. 2

4 Verify any and all SIDs and LIDs associated with the property. Some properties will have more than one. Double check defaults as these will result in foreclosure quicker than any other default. Verify each HOA and/or CIC that this property may belong to. There could easily be two or even three. Verify the management company, fees, and get a good phone number. Many HOAs have changed management companies several times in the past few years. Verify the schools for the upcoming school year not last year. These change frequently and we now have some schools that are year around again. ccsd.net/schools/zoning/search Verify all MLS data to be input. Never copy from another model match home. For example, KB Homes, Pulte, and others have built homes with identical floor plans that could be 4, 5, or even 6 bedrooms. Measure everything! The disclaimer deemed reliable, but not guaranteed at the bottom of the MLS T-sheet may protect GLVAR, but never the listing agent against bad data. Find out from the HOA if there are rental restrictions when listing a home that could be purchased by an investor. Advise investors to allow their current rental to go to month to month before listing, if possible. Many times hedge funds have purchased using 5% yield business decision models and then offered 2-year leases slightly below current market rents to attract tenants. Therefore, between lower rents and potentially higher market values, a property might not pencil out an acceptable cash flow unless the next investor can raise the rent. 3

5 What about the Preliminary Title Report? If there are tenants, find out who manages the property and obtain a copy of the lease. Beware, if there is a property manager it s possible that they may have an exclusive right to list (or think they do) that the Seller is not aware of! These items in the previous slides may or may not appear in the Preliminary Title Report you will receive later. Review the Preliminary Title Report with your client as soon as you receive it. AGENCY DISCLOSURE FORMS Duties Owed By A Nevada Real Estate Licensee SUPPLEMENTAL LIST OF LICENSEES PARTY TO THE DUTIES OWED BY A NEVADA REAL ESTATE LICENSEE Consent to Act THE LISTING PRESENTATION Preparing the Seller s CMA Traditional Comparables Competition Supply and Demand 4

6 SRPD DISCLOSURES Timeliness of Disclosures Seller s Responsibility Listing Agent Responsibility Buyer s Agent Responsibility Buyer s Responsibility Current Disclosure Issues Affiliated Business Arrangement Disclosure Statement Disclosure of Lead-Based Paint and/or Lead-Based Paint Hazards (dwelling built prior to 1978) Leased versus Owned Water Softener System Leased Solar Panels SNWA Water Conservation Covenant Restrictions Fixtures vs Personal Property Items Deed Restrictions Writing the Contract Other Listing Contract Considerations The Pre-Listing Homework Provides the Details for the Listing Agreement. Writing the Contract Becomes Easy! Elements of a Valid Listing Agreement Terms Personal Property Included and Excluded Multiple Offers Back-up Offers Compensation Title Insurance and HOA Foreclosures Fair Housing FIRPTA Mediation Advertising Issues Estimated Costs and Net Proceeds Form (Cost Sheet) MLS Change Order MLS T Status Authorization (Temp off Market) MLS Withdrawal/Termination Order 5

7 Now Go Out and Take a Listing Today! 6

8 These may or may not appear in the Preliminary Title Report you will receive later. Review the Preliminary Title Report with your client as soon as you receive it. Verify each individual on title. Match names to those shown on title at the Assessor s site. Make copies of identification cards for each individual on title or for who will sign. Get copies of the relevant pages from trust documents, LLC documents, etc. to verify who can sign for the LLC, Trust, etc. Is there a Durable Power of Attorney in play? If so, provide it to Title/Escrow and ask how they want to proceed. Is there a Specific or General Power of Attorney in play? If so, contact Title/Escrow as they will most likely want a Special POA executed just for this transaction. Is there and bankruptcy attorney involved? If so, contact them as you could end up losing this listing anyway. Is this a probate listing? If so, who has the power to sell? Be sure to get copies of their documents before listing. Review the most current Grant, Bargain, and Sale Deed for any Deed Restrictions, such as SNWA water conservation covenant restrictions. Go to the Clark County Recorder s site to check for lis pendens, judgments, NODs, tax liens, HOA liens or defaults, and any other recorded liens that will need to be cleared to provide clear title. Verify any and all SIDs and LIDs associated with the property. Some properties will have more than one. Double check defaults as these will result in foreclosure quicker than any other default. Verify each HOA and/or CIC that this property may belong to. There could easily be two or even three. Verify the management company, fees, and get a good phone number. Many HOAs have changed management companies several times in the past few years. Verify the schools for the upcoming school year not last year. These change frequently and we now have some schools that are year around again. Verify all MLS data to be input. Never copy from another model match home. For example, KB Homes, Pulte, and others have built homes with identical floor plans that could be 4, 5, or even 6 bedrooms. Measure everything! The disclaimer deemed reliable, but not guaranteed at the bottom of the MLS T-sheet may protect GLVAR, but never the listing agent against bad data. Find out from the HOA if there are rental restrictions when listing a home that could be purchased by an investor. Advise investors to allow their current rental to go to month to month before listing, if possible. Many times hedge funds have purchased using 5% yield business decision models and then offered 2-year leases slightly below current market rents to attract tenants. Therefore, between lower rents and potentially higher market values, a property might not pencil out an acceptable cash flow unless the next investor can raise the rent. If there are tenants, find out who manages the property and obtain a copy of the lease. Beware, if there is a property manager it s possible that they may have an exclusive right to list (or think they do) that the Seller is not aware of! Prepared by: Forrest L. Barbee BHHS Nevada Properties 9 September 2016