Pre-screen your rental inquiries to save time and effort

Prescreening defined:  eliminate time wasters!  Improve your odds of closing a “deal” with an applicant.  This means getting them to apply, get approved, pay the funds, and move in!

 Know your 10 second commercial:  Mine is “we screen for credit, criminal, eviction, employment, and landlord verification.  The screening fee is $40.00 per adult over the age of 18.  All parties that will be on the agreement apply.”

 After you have given your commercial you can explore the caller’s reaction.  “Do you have credit, criminal, eviction, employment, or landlord issues you would like to make us aware of prior to renting?  Will any of these screening areas be a problem for you?”  Have a conversation.  Be aware that tenants will tell a story.  The screening facts matter. 

 Don’t try to define your criteria or establish if a caller can pass it.  Offer to provide it in writing and invite all callers to apply.  Treat all parties the same.  “We provide screening criteria and lead based paint disclosure and photos prior to booking an appointment to show.  Do you have email?”

 “Have you driven by the property yet?”  Explore if they are familiar with the area.

 Next you can move on to your property rules.  Questions such as the following are helpful.

 “Do you have pets of any sort? – reiterate your pet policy.  Ours is “we do not accept any aggressive breeds.  Pet visit at your home may be required prior to approval of a pet.”

 “What date are you interested in moving?” – reiterate your move in policy.  Ours is “we do not hold homes more than seven days once an applicant is approved.  Upon approval you will have 48 hours to pay an execution deposit and sign an execution agreement.  These are certified funds.”

 “Do you have any “musts” for a property that we should know about before showing you the house?”

 “This house has __________________ heat.”  “The tenant pays for all utilities except ___________________.”

 “This house is (small) or (duplex) or has a (garage) that is used primarily for storage.”

 “We are showing the property at ___________________________.  Would you like to be present at that appointment?  What is a good cell # for you? _______________________”

 We require a confirmation phone call prior to our dispatching to the appointment.  Please call to confirm when you are on your way to the home or cancel at ________________.  We don’t go to the house without a confirmation call.

If you would like help buying or selling a home in Oregon and Washington please give me a call!

Kathryn King 503-997-9035, kathryn@kjkproperties.com

HUD HIGHLIGHTS March 2010 e-Briefs from Oregon and Washington

HUD HIGHLIGHTS

March 2010

HUD e-Briefs from Alaska, Idaho, Oregon & Washington

Mary McBride, Region X Regional Director        206/220-5356       Leland Jones, Editor

ON THE JOB

  It was standing room at HUD Seattle on Tuesday morning, March 2^nd, as Mary McBride officially assumed her new duties as HUD’s Regional Director for Region X serving Alaska, Idaho, Oregon and Washington.   The oath of office was administered by Deputy Secretary Ron Sims who said Mary is “knows how to build and sustain working partnerships that get things done.”  Mary, who comes to HUD from U.S. Senator Patty Murray’s staff and who previously served as Washington State Director for USDA Rural Development said “Given the importance of HUD to the daily lives and long-term futures of communities big and small, it is an honor to serve as HUD’s Regional Director for the Northwest, especially in an Administration so committed to sustainability, accountability and creativity in putting Federal resources to work,” As Regional Director, she’ll be HUD’s liaison to mayors, city managers, elected state and local officials, congressional delegations, stakeholders and customers and be responsible for overseeing the delivery of HUD programs and services to communities, as well as evaluating their efficiency and effectiveness.

FARE WELL

HUD Deputy Regional Director Martha Dilts, based at HUD Seattle, and HUD Boise Field Office Director William Jolley both have announced that they will retire from the Department on March 31^st.  Martha, who’s been with HUD for more than 11 years, plans to travel and, then explore “new ways to stay involved” in the community.  Bill who’s headed HUD Boise for two years plans to return to Georgia to rejoin his family.

BRIEF BRIEFS

RuralCAP, Alaska Legal Services and Consumer Credit Counseling tap Recovery Act funds to launch housinghelpnowalaska.org campaign “to help Alaskans who are struggling to manage mortgages, rent, loans, credit card debt, and at risk of losing their home”. . .Housing Authority of Portland cuts ribbon on the redeveloped 48-unit, 5-story James C. Hawthorne building to house its Bridgeview which serves individuals who are or are at risk of becoming homeless. . .Calling it “just the right thing to do,” Pam Tietz,  executive director of Clallam County housing authority, tells Peninsula Daily News her authority “plans to consolidate” with “less robust” Jefferson County to provide more housing and programs to residents who may presently be underserved. . . Agriculture Secretary Vilsack announces $749,000 Recovery Act grant to improve broadband infrastructure in Sandy. . .After a decade of “hard work at work worth doing,” Krag Johnsen bids farewell as chief operating officer of the Denali Commission, noting that “over $1 billion in Denali Commission funding for infrastructure, training and economic development has been put to work while I have been here”. . .Oregon Housing & Community Services’ Victor Merced reports that, “so far” it’s used Recovery Act funds to weatherize more than 300 homes with an estimated energy savings of 7,240 million British Thermal Units. . Meanwhile, Energy Department reports through February 16^th, Idaho ranks 5^th and Washington State ranks 9^th in percentage of planned units weatherized. .. . .Kitsap County housing authority names Tony Caldwell, formerly with Monterey County, California authority, as its new executive director. . .Wilsonville Spokesman says city’s Villebois development has been cited as a “community of the year” by National Association of Homebuilders. . .SeaMar Community Health Center finalizes plans to celebrate completion of 25-unit Cesar Chavez Village town home development in South Park neighborhood of Seattle on March 31^st, the anniversary of Mr. Chavez’s birth. . .Preservation Idaho taking nominations for 33^rd annual Orchids & Onions Awards until March 15^th. . .Hoping to save some 29,000 kilowatt hours of energy a year, St. Vincent de Paul of Lane County starts its first solar retrofit, starting to inst 16 solar panels on roof of Mary Skinner Apartments in Eugene.

QUOTE TO NOTE

“If you asked Stanley Tom, the Tribal Administrator of Newtok, Alaska, where the ground beneath residents’ feet is literally melting because of the effects of climate change, he would tell you sustainability is about survival itself — not only about preserving jobs and homes, but the lives of residents. And that’s why they’re taking historic steps to physically move the boundaries of their town to safer ground.  Whether it’s revitalizing a town center, connecting affordable housing to transportation and jobs, linking cities and suburbs to one another, or taking extraordinary measures to make the places we live more resilient to climate change, every one of these communities has a different interpretation of what sustainability means to them — driven not by what Washington says, but by local needs, local markets and local demands. And fundamentally, each of these communities is thinking about the same thing:  The future — how they can meet the needs of today without compromising the futures of their children and grandchildren. That is sustainability.” – Secretary Donovan announcing new Office of Sustainability at New Partners for Smart Growth Conference in Seattle, February 4^th.

HUD WANTS TO KNOW

In February speeches in Portland and Seattle in early February, Secretary Donovan announced creation of a new HUD Office of Sustainable Housing & Communities to “to tie the quality and location of housing to broader opportunities such as access to good jobs, quality schools, and safe streets.”  Under the direction of Shelley Poticha, one of the Office’s first tasks will be distribution of some $100 million appropriated by Congress for regional integrated planning grants. Now, the Secretary would like to hear your feedback, by March 12^th, on the how’s, what’s and why’s of the new Office and the grant program.  To view the proposals, visit http://portal.hud.gov/jamwiki/en/StartingPoints;jsessionid=5203605341DAA84ACE625DA3D97BE739 where you’ll find all the details.  But please remember that we’d like to hear from you by March 12^th.

GOT VIEWS?

Want to share your views on or experiences with sustainability directly with Deputy Secretary Sims and Shelley Poticha?  Then join them – remotely – from 10 to 11 a.m. Pacific on March 9^th or on March 11^th for a nationwide sustainable housing and communities Webcast from HUD Headquarters.  It’s part of a nationwide “listening tour” HUD’s conducting to “learn how” the new Sustainable Communities Planning Grant “can best be used to spur local innovations” that will “help communities grown more sustainably.”  You’ll be able to submit questions or comments by e-mail.  For more, visit www.hud.gov/webcasts/index.cfm 

BRIEF BRIEFS TOO

March 15^th is deadline to apply for $4.8 billion in USDA Rural Utilities and National Telecommunications & Information Administration broadband grants. . .Idaho Department of Commerce hosting Rural Forums March 24^th in Jerome, March 31^st in Fruitland, April 6^th in Rexburg, April 7^th in Pocatello and April 10^th in Bayview to share the latest in community and economic development news and tools with local government and community leaders. . .Tri-City Herald says Gospel Union Mission has purchased 2 four-plexes in Kennewick to transitional housing for the homeless. . .Idaho Mountain Express reports that Hailey City Council has voted to sign a 99-year lease with ARCH to build 24-unit senior housing complex. . .Lee Moore elected chair of Housing Authority of Portland board. . .Spokesman Review says Millwood City Council has voted to endorse Spokane County’s regional 10-year plan end homelessness. . .Portland’s efforts to promote “water independence” in its buildings wins Beyond GREEN citation from national Sustainable Buildings Industry Council. . . Applications being accepted until April 15^th for free house painting in 26^th annual Paint Tacoma-Pierce Beautiful drive. . .Citing the economic downturn, with regret Oregon Housing & Community Services has decided to delay the statewide housing conference it had planned for this year until 2011. . . Ketchum Community Development tells AP it’s raised more than half the funds it needs to build a town square in downtown Ketchum. . .KDRV-TV says Salvation Army breaks ground for 12-unit Hope House in Medford for homeless families. . .Paul G. Allen Family Foundation announces grants to Umpqua Community Development in Roseburg to support its foreclosure prevention programs, Hacienda Community Development in Portland to expand its Micro Mercantes micro-enterprise program and White Center Community Development in Seattle to start a green jobs initiative. . .Multnomah County, says Oregonian, launches 30 Families in 30 Days program speed process of helping homeless families find permanent housing. . .Vancouver Columbian says “construction crews will soon begin work” on Affordable Community Environment will break ground shortly on $10 million, 48-unit McAllister Village affordable housing development in Fruit Valley neighborhood. . .”I know I’ve helped thousands of people,” Bob More tells Coos Bay World on the day before retiring after 24 years “helping families keep roofs over their head” for Oregon Coast Community Action. . .Walla Walla Union Bulletin says Blue Mountain Action Council and other nonprofits recently completed training by Federal Deposit Insurance Corporation on how to help clients manage their personal finances. . .Affordable Housing Finance magazine seeking nominations for Readers Choice Awards for projects completed in 2009 or 2010. . .Washington Department of Commerce awards EPA Recovery Act funds to South East Effective Development for lean-up of former Chubby & Tubby site in Rainier Valley to allow development of 68 units of affordable housing.

SMART INVESTMENT

Give credit where credit is due.  Even in the middle of a downturn, the Washington Housing Trust Fund remains fully committed to its mission of promoting homeownership.  It’s just announced the award of $2.5 million to Columbia Nonprofit Housing, the Columbia Valley Housing Association,  Habitat for Humanity of Island County. Habitat South Puget Sound, Habitat Tri County, the Homestead Community Land Trust, the Kulshan Community Land Trust, Home for Islanders, Parkview Services Rural Resources Community Action  and the Thurston County Housing Authority to provide some 90 affordable homeownership opportunities.  About half the funds are going to down payment assistance, a third to self-help projects and the balance to community land trusts.  The Fund  focused its resources on projects that are in a position to have the new owners will be in their homes by the end of 2010.

SMART WORK(S)

Congratulations to Community Frameworks of Spokane and Bremerton – again!  It’s one of just four organizations nationwide – the Housing Assistance Council, Tierra del Sol of New Mexico and Habitat for Humanity International are the other three – to win HUD Self Help Opportunity Program (SHOP) grants this year.  With the $5.1 million its won and the “elbow grease” of its volunteers, Community Frameworks expects to build 290 homeownership units in Idaho, Montana, Oregon and Washington.  This is at least the seventh time Community Frameworks has won a SHOP grant.  Since 1996, Community Frameworks used “sweat equity” to build more than 2,100 homes in the Northwest.

SMART BET

You may or may not like gambling.  But it’s hard to argue with how its proceeds are used.  Oregon Housing & Community Services, for example, has allocated some $11.3 million in lottery-backed bond proceeds to preserve 519 affordable units in 13 affordable apartment complexes in Ashland, Beaverton, Klamath Falls, Lincoln City, Madras, Medford Monmouth, Mt. Angel, Prineville, Redmond, Willamina and Wilsonville. It’s estimated that, if not preserved, the units would cost an estimated $104 million to replace. The allocation also will insure that Oregon continues to receive the Federal rent subsidies associated with the complexes.

BRIEF BRIEFS THREE

USDA says it’s holding public forum in Washington on May 14^th to “solicit feedback from the public on whether the current method of delivering the self-help program is the most efficient and cost effective” means of doing so. . .Low Income Housing Institute celebrates grant opening of 15-unit, two-bedroom Nova Townhomes for first-time buyers. . .Senators Merkley and Wyden announce $749,000 Recovery Act grant to bring broadband to rural parts of Clackamas County . . .Tacoma Housing Authority says it hopes to secure LEED Platinum rating for Salishan 7, the final phase of the area’s redevelopment sparked by a 2000 HUD HOPE VI grant. . .Idaho Housing & Finance Association’s Home Partnership Foundation awards 13 emergency response grants totaling $69,600 to homeless providers across state. . . Daily Mirror says Womens Bay wins $475,000 HUD grant to expand fire station to include emergency shelter for residents in the event of disasters like the 2009 mudslide that cut-off town from City of Kodiak. . .Community Frameworks in Washington and University of Idaho win USDA Rural Development grants to promote rural economic development. . .Housing Works in Redmond plans to provide rental assistance to an additional 160 eligible Oregon households. . .March 5^th is deadline to submit nominations of outstanding achievement in historic preservation to Washington Department of Archaeology & Historic Preservation. . .Central City Concern sets March 10^th date for grand opening of Madrona Studio Central, a former hotel that’s been renovated to provide 176 units of affordable housing. . .Tlingit-Haida Regional Housing Authority says it will use Recovery Act funds for independent living center for seniors in village of Saxman. . .ROOTS shelter for homeless young people in Seattle’s University District, says Seattle Times, wins $7.7 million Raynier Foundation grant “aimed at filling gaps in existing services”. . .Juneau Homeless Coalition holds first-ever Project Homeless Connect and already is telling Juneau Empire “this is going to be an annual event”.

.

WORTH KNOWING

First, let’s state the obvious – Alaska can get pretty darn cold.  Now, the not-so-obvious -  piles of insulation alone won’t keep an Alaska home habitable in the middle of a deep, dark winter.  Too much insulation, after all, can trap moisture and too much moisture means mold and even rotting wood.  That’s why the Cold Climate Housing Research Center of Fairbanks has put a mobile lab on the road.  Inside, reports KTUU-TV, there are “nine different walls, some outfitted with exterior insulation, some with thick insulation, others with a thin sheet and one without any insulation.”  Each wall is monitored with sensors to test their reaction to changes in temperature and humidity.  “We have a lot of concern about the way people are doing their retrofits,” explained the Center’s Collin Craven.  “We know for sure that if you install insulation correctly, you’ll reduce how much heat you lose.”  But what’s not as well known in Alaska is how different types of insulation “protect the wall from getting too wet.”  By summer’s end, the Center should have all the data it needs and, by next spring, the “answers to homeowners” about how “they get the energy efficiency, lower fuel bills that they want” without “reducing the lifespan of their house.”

WORTH NOTING

March 22^nd is deadline for comments on proposed new HUD multifamily closing documents published January 21^st at http://edocket.access.gpo.gov/2010/pdf/2010-957.pdf

DITTO

March 5^th is the deadline to submit comments on HUD’s proposed implementation of the Secure and Fair Enforcement Mortgage Licensing (SAFE) Act of 2008 at www.hud.gov/offices/hsg/ramh/safe/safeprule.pdf

DIT-TWO

Find out more about how HUD’s loss mitigation programs work to protect FHA-insured homeowners at-risk of foreclosure in a one-hour Webinar at 11 a.m. Pacific on March 18^th Webinar.  Register at https://www2.gotomeeting.com/register/893489867

DIT-THREE

Bed bugs putting the bite on you and your residents?  Learn what HUD multifamily properties are doing to combat infestations in a one of two Thursday, March 4^th HUD Webcasts.  The first runs from 10 to 11 a.m. Pacific – register at https://www2.gotomeeting.com/register/842157923 – and the second from 11:30 to 12:30 p.m. Pacific – register at https://www2.gotomeeting.com/register/378511331

FUNDING-MENTALS

March 12^th is date of Oregon Housing & Community Services training via the Internet on its 2010 Consolidated Funding Cycle. . .March 19^th is deadline for National Drug Control Policy’s drug free communities grant. . .March 31^st is deadline for capital grant element of Department of Veterans Affairs homeless provider & per diem grant program. . March 31^st is deadline to submit letters of inquiry for Home Depot’s Awards of Excellence for Affordable Housing Built Responsibly and for Sustainable Community Development. . .April 1^st is deadline to submit letters-of-intent for Weyerhauser Family Foundation grants for children affected by domestic violence. . .December 31^st, 2010 is deadline for USDA’s Rural Housing Service Section 538 loan guarantees for Rural Rental Housing. . .

COMING UP

Visit HUD Spokane hosts Fair Housing Training, March 3^rd, Spokane.  Visit www.hud.gov/apps/calendar/event.cfm?state=wa&record=9958&scheduleID=9719&calendarID=52

Federal Reserve Bank Loss Mitigation & Making Home Affordable Workshop, March 10^th, Portland.  Visit www.hud.gov/apps/calendar/event.cfm?state=or&record=10240&scheduleID=9993&calendarID=41

Annual conference of Idaho Association of Mortgage Brokers, March 10^th & 11^th, Boise.  Visit www.hud.gov/apps/calendar/event.cfm?state=id&record=10195&scheduleID=9948&calendarID=16

Pacific Northwest Farmworkers Summit, March 11^th & 12^th, Portland.  Visit www.ohdc.org/summit.html.

Denver Homeownership Center hosts FHA Hot Topics Webinar, March 16^th.  Registration required at March http://hwvauwt847.hud.gov/emarc/index.cfm?fuseaction=emar.addRegisterEvent&eventId=392&update=N

U.S. Treasury’s Community Development Finance Initiatives Fund hosts How to Certify Your Group as CDFI teleconference, March 18^th.  Visit www.cdfifund.gov

HUD Seattle hosts HUD Environmental Training Workshops, March 22^nd to 25^th, Seattle.  Visit www.hud.gov/apps/calendar/event.cfm?state=wa&record=10239&scheduleID=9992&calendarID=52

HUD Seattle hosts Federal Labor Standards Workshop, March 22^nd, Seattle.  Visit www.hud.gov/apps/calendar/event.cfm?state=wa&record=10272&scheduleID=10025&calendarID=52

HUD Anchorage hosts Federal Labor Standards Workshop for contractors, March 24^th, Anchorage. Visit www.hud.gov/apps/calendar/event.cfm?state=ak&record=10273&scheduleID=10026&calendarID=5 

Denver Homeownership Center hosts Webinar on Underwriting the FHA Appraisal, March 24^th.  Registration required at http://www.hud.gov/emarc/index.cfm?fuseaction=emar.addRegisterEvent&eventId=391&update=N

Central Oregon Community Colleges hosts Homeownership Preservation Workshop, March 27^th, Bend.  Visit www.freddiemac.com/avoidforeclosure/pdf/Bend_Borrower_Seminar_Flyer_03-27-10.pdf

HUD Seattle hosts Federal Labor Standards Workshop for city, county & state government agencies, March 29^th, Seattle.  Visit www.hud.gov/apps/calendar/event.cfm?state=wa&record=10274&scheduleID=10027&calendarID=52

HUD Portland hosts Federal Labor Standards Workshop for public, Indian and tribal housing authorities, March 30^th, Portland.  Visit www.hud.gov/apps/calendar/event.cfm?state=or&record=10275&scheduleID=10028&calendarID=41

National American Indian Housing Council presents Combating Prescription Drug Abuse in Tribal Housing, March 30^th & 31^st, Anchorage.  Visit http://www.naihc.net/leadershipinstitute/index.asp?bid=3699

Denver Homeownership Center hosts FHA Lending & Insuring Refresher, March 30^th.  Registration required at http://hwvauwt847.hud.gov/emarc/index.cfm?fuseaction=emar.addRegisterEvent&eventId=394&update=N

HUD Portland hosts Federal Labor Standards Workshop for city, county and state governments, March 31^st, Portland.  Visit www.hud.gov/apps/calendar/event.cfm?state=or&record=10276&scheduleID=10029&calendarID=41

HUD Portland hosts Federal Labor Standards Workshop for contractors, April 1^st, Portland.  Visit www.hud.gov/apps/calendar/event.cfm?state=or&record=10278&scheduleID=10031&calendarID=41

Oregon departments of business development and environmental quality host Oregon Brownfields Conference, April 6^th & 7^th, Salem.  Visit  www.hud.gov/apps/calendar/event.cfm?state=or&record=10260&scheduleID=10013&calendarID=41

HUD Portland hosts Basic Fair Housing Workshop, April 7^th, Portland.  Visit  www.hud.gov/apps/calendar/event.cfm?state=or&record=10279&scheduleID=10032&calendarID=41

Governor Otter hosts Small Business Summit, April 13^th, Boise.  Visit http://gov.idaho.gov/mediacenter/press/pr2010/prjan10/pr_007.html

Washington Association of REALTORS holds Spring Business Conference, April 14^th to 16^th, Che Elum.  Visit   http://warealtor.org/

2010 Spokane Fair Housing Conference, April 16^th, Spokane. Visit www.hud.gov/apps/calendar/event.cfm?state=wa&record=10188&scheduleID=9941&calendarID=52 

U.S. Treasury’s Community Development Finance Initiatives Fund hosts How to Certify Your Group as CDFI teleconference, April 15^th.  Visit http://www.cdfifund.gov

Idaho Affordable Housing Management Association holds annual conference, April 19^th to 22^nd, Garden City.  Visit www.idahoahma.org

Washington Affordable Housing Management Association holds annual conference, April 20^th to 21^st, Wenatchee.  Visit http://www.ahma-wa.org/

Fair Housing Council of Oregon conducts “Fasten Your Seat Belt-It’s Been a Bumpy Ride” bus tour “exploring Portland’s hidden history of housing discrimination,” April 23^rd, Portland. Contact Diane Hess, dhess@fhco.org, 503/412-6000, extension 108.

Pacific Northwest Regional Council of NAHRO holds annual conference, April 25^th to 28^th, Salem.  Visit http://www.pnrcnahro.org/

Alaska Rural Energy Conference, April 27^th to 29^th, Fairbanks.  Visit http://www.uaf.edu/acep/rec/

2010 Northwest Regional Community Land Trust Conference, April 28^th to 30th, Portland.  Visit http://www.hud.gov/apps/calendar/event.cfm?state=wa&record=10274&scheduleID=10027&calendarID=52

4^th Biennial Alaska Rural Health Conference, April 28^th to 30^th, Anchorage.  Visit  http://www.arhc2010.com/

HUD Seattle hosts Basic Fair Housing Workshop, April 28^th, Seattle.  Visit http://www.hud.gov/apps/calendar/event.cfm?state=wa&record=10017&scheduleID=9778&calendarID=52

HUD Seattle hosts Advanced Fair Housing Workshop, April 28^th, Seattle.  Visit http://www.hud.gov/apps/calendar/event.cfm?state=wa&record=10022&scheduleID=9783&calendarID=52

Annual conference of Washington State Coalition for the Homeless, May 12^th to 14^th Spokane. Visit www.endhomelessnesswa.org

Annual conference of Oregon Affordable Housing Management Association, May 12^th to 14^th, Eugene.  Visit www.hud.gov/apps/calendar/event.cfm?state=or&record=10182&scheduleID=9935&calendarID=41

Grassroots & Groundwork Conference, May 12^th and 13^th, Portland.  Visit www.hud.gov/apps/calendar/event.cfm?state=or&record=10261&scheduleID=10014&calendarID=41

U.S. Treasury’s Community Development Finance Initiatives Fund hosts How to Certify Your Group as CDFI teleconference, May 20^th.  Visit http://www.cdfifund.gov

* * * *

Short Sales explained by Oregon Association of Realtors

Short Sale Single Offer Clause

Q.  Can a buyer have a provision in their offer on a short sale that says the seller cannot submit other offers to the lender until the lender has decided on the buyer’s offer?  What happens if the seller gets three such offers, each with the same clause?

A.  Sure the buyer can have such a clause.  The question is what will happen if they do?  Short sales are seriously misunderstood and difficult transactions.  There is tremendous ambiguity and uncertainty for both the seller and the buyer in a short sale.  The seller wants to avoid foreclosure and may not care much about price.  The buyer wants a deal.  Neither needs the uncertainty associated with an ongoing bidding war conducted by serial offers being presented to some distant, unresponsive, disinterested, overworked employee of a troubled lending institution.  The clause you reference is just the kind of thing you’d expect a buyer seeking to reduce uncertainty would come up with in such a dysfunctional market.

Whether a seller can or should accept an offer with such a clause depends on the situation.  In a short sale, offers are going to be contingent on the seller getting the lender’s consent sufficient to clear title.  That means two agreements.  One is the real estate deal between buyer and seller.  The other is the agreement between the lender and the seller regarding the seller’s debt to the lender.  Making the real estate deal contingent on the seller/lender agreement doesn’t make the lender a party to the real estate deal itself.  The seller therefore retains the right to accept or reject any offer on any terms.  Retaining a right doesn’t, however, mean the seller can do whatever they please.

Whether a particular seller should (normative question) accept an offer with such a clause depends first on the seller’s position.  If there is a chance the lender will demand a personal note for the deficiency, or the seller’s taxes will vary with the deficiency, the seller may have no reason to accept such an offer.  On the other hand, if time is short and the size of the deficiency doesn’t matter that much to the seller, they may like the idea of one offer.  It is, in the first instance, their call. The concern, of course, is that accepting such an offer may somehow defraud the lender or involve the agents in misrepresentation.  Everyone is, and ought to be, a little paranoid about lender fraud after it brought down the whole real estate market.

Fraud and misrepresentation by silence require hiding material information.  A seller negotiating with a lender regarding the seller’s debt to the lender owes the lender the duties of good faith and fair dealing. They cannot hide information from the lender that would be material to the lender’s decision regarding the debt.  Here, that means they could not deliberately hide subsequent better offers without the lender’s knowledge.  In this case, however, that is not a problem.  If the seller accepts the offer, the single offer submission term will be contained in the offer forwarded for the lender’s approval.  If the lender doesn’t like that approach all they have to do is say no.   Of course, that may take a month or two and by that time the seller may be foreclosed, but that just takes us back to the normative question of “should” the seller accept such an offer.

The “two agreement” nature of short sales means the seller must consider both their own needs and their duty of good faith and fair dealing to the lender.  Their own “needs” means answering a context-specific normative “should” question.  Once the seller has that answer, the issue becomes their obligation to deal honestly and fairly with the lender.  That can be done just by submitting the offer with the “one offer clause.”  It could be done by working with the lender ahead of time to determine how to handle such things.  That can be done by phone and confirmed by email.  Remember, on the seller/lender side we are talking about disclosure of material facts relevant to the seller’s debt to the lender.  All that means is not hiding important things from the lender.  The single offer presentation clause is actually an easy one because the disclosure issue is taken care of by the provision being presented to the lender in the offer.  It is secret procedures like unilaterally deciding to take backup offers and submit them serially to the lender without the lender’s knowledge that may cause real problems.

Alright, so what about the multiple offers all with the same single offer presentation clause?  It’s the same thing.  First the seller deals with the offers as offers.  A seller with multiple simultaneous offers will normally reject all offers and ask each buyer to make their last best offer.  It doesn’t matter if the buyers come back with last best offers that all contain the single offer presentation clause.  At that point, the seller will (assuming it is in their interest to accept any offer with such a clause) simply accept the best offer and forward it; just like they would had they received only one offer.  It is just an application of how to deal with multiple offers coupled with how to deal with short sale negotiations.  For more information, you should read the new “Dealing with Multiple Offers in Short Sale” section of the Oregon REALTORS® Risk Management Toolkit.  Contact me at kathryn@kjkproperties.com if you’d like a copy.

September Market News

September Market News