Posted by: The Tim

Tim Ellis is the founder of Seattle Bubble. His background in engineering and computer / internet technology, a fondness of data-based analysis of problems, and an addiction to spreadsheets all influence his perspective on the Seattle-area real estate market.

21 responses to “Weekly Twitter Digest (Link Roundup) for 2012-04-07”

  1. Kary L. Krismer

    I call Craig Blackmon’s appeal decision the most interesting boring case decision ever. Much of the case is spent on the relatively boring topic of whether a release was valid. That shouldn’t be boring for agents, however, because it’s an example of the language of the contract not creating the result they think it should (e.g. a buyer can always back out based on an inspection contingency). In this case it was that a seemingly clear release wasn’t valid. But in general, that is rather dull.

    The interesting part was contained in two footnotes!

    2 However, the real estate purchase and sale agreement (REPSA) was not expressly conditioned on the sale of the Grimeses’ house. While Grace included a Financing Addendum” to the REPSA, he failed to append “Form 22B,” the “Buyer’s Sale of Property Contingency Addendum.”

    3 Grace also acted as the Grimeses’ listing agent.

    This is hardly addressed at all in the decision, but those are facts I would call a litigation magnet and cause of action generator. Maybe non-attorneys won’t fully understand the implications of those simple facts, but when I first read those words Thursday night I could see what attracted Craig to the case.

    The result for the consumer was quite good!

    The jury awarded Hanks $195,000 in past economic damages and $170,000 in noneconomic [sic] damages.

    Anyway, great job by Craig.

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  2. Kary L. Krismer

    I see you linked my piece on two agent short sale practices. That’s really more of an agent topic, but when I wrote it I was thinking it could affect sellers too, but didn’t put it in that Trulia category. Then Craig pops up with an insightful comment on how a plaintiff’s attorney might see it affecting buyers! I’ve already amended my forms.

    I thought you might have linked my somewhat out of character Market Shift piece. That’s more consumer orientated (although it did get linked on WR’s Facebook page).

    http://www.trulia.com/blog/kary_l_krismer/2012/04/significant_market_shift

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  3. Kary L. Krismer

    RE: Kary L. Krismer @ 1 – I realized I forgot to link the opinion I was quoting.

    http://www.courts.wa.gov/opinions/?fa=opinions.disp&filename=660713MAJ

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  4. Peter Witting

    Kary, when a penthouse like the one featured in this roundup goes back the bank, who is responsible for paying the monthly HOA fees? They must be several thousand a month for that One Lincoln Tower penthouse.

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  5. David Losh

    You have the two attorney pieces in here that talk about things only attorneys would write about. Real Estate agents should know how to avoid pit falls to begin with.

    Then there is the “hilarious” blogspot of Lennox Scott who is talking about ways to make housing affordable.

    Real Estate is a complicated business, as you point out in other articles about banks, developers, foreclosures, and deliquent mortgages. It’s all getting sorted out, but it will take time.

    I’m going to caution people again that if you are buying, or selling a home to seek out an experienced Real Estate professional, and avoid the side show of internet Real Estate.

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  6. ARDELL

    RE: Kary L. Krismer @ 1

    The 90 day escrow was a tip off. :) Saw that case back in the late 80’s on a “hidden contingency”. Seems we fix everything after a case…and after 20 years forget all about it and start over again.

    How can anything be “new” in selling a house? It isn’t. Too many just didn’t know in the first place and the rest of them forgot.

    Does anyone think a “hidden contingency” case was never done in the history of selling houses until 2012?

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  7. robotslave

    I was expecting to see a link to the article in last Sunday’s NY Times about new rental property investment companies (or business plans, at any rate). It’s interesting in its own right, and I thought it might fuel speculation about what’s behind the huge proportion of cash purchases in the low tier.

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  8. Kary L. Krismer

    RE: Peter Witting @ 4 – I can’t keep that straight in my head for an off the top of the head answer, in part because there are old condos and new condos with different laws. I believe though that that one probably has a 6 month priority, and the rest is just lost, to be made up by the other owners eventually. It’s something I haven’t had to deal with.

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  9. Kary L. Krismer

    By David Losh @ 5:

    You have the two attorney pieces in here that talk about things only attorneys would write about. Real Estate agents should know how to avoid pit falls to begin with.

    Okay, I’ll give you that an agent should probably know not to write up an offer on his on client’s listing without disclosing, in writing, that the buyer needed to sell. That seems like a no-brainer.

    But how do you think agents are going to know how to deal with the short sale issues I addressed?

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  10. Kary L. Krismer

    By ARDELL @ 6:

    Does anyone think a “hidden contingency” case was never done in the history of selling houses until 2012?

    It’s not so much that it’s new as that there’s an added twist in this situation. Let’s say you have a situation where Bill agent was the agent for the seller on House A and also the listing agent for the buyer of House A on their House B. That, by the way, it not dual agency (absent other factors), but it is in my opinion a pretty clear conflict of interest requiring disclosure (preferably in writing). As the listing agent on House A there was the duty under RCW 18.86.040 to:

    (a) To be loyal to the seller by taking no action that is adverse or detrimental to the seller’s interest in a transaction;

    (b) To timely disclose to the seller any conflicts of interest;

    Pursuant to RCW 18.86.030 there is also a duty:

    (d) To disclose all existing material facts known by the licensee and not apparent or readily ascertainable to a party. . ..;

    A “material fact” is defined in RCW 18.86.010 as:

    (9) “Material fact” means information that substantially adversely affects . . . a party’s ability to perform its obligations in a real estate transaction

    Thus, disclosing the contingent nature of the transaction would be required, in my opinion. Preferably all these disclosures would be in writing, and arguably all of these provisions were violated if the contingent nature of the offer was not disclosed.

    Let’s take the conflict situation away though, and assume that another agent had presented the offer to buy House A. Not disclosing the contingent nature of the offer in my opinion would violate the duty to disclose material facts. So while a hidden contingency might be nothing new, it has been illegal since at least 1996 (the date 18.86.010 and 030 were enacted). That’s why Forms 22B and 22Q exist.

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  11. Ray pepper

    Great job on winning your case Marc but was the entire situation avoidable in the first place? In nearly 20 years in real estate I have avoided any and all forms of real estate related litigation for my clients.

    Far more educational was the twitter topic on forcing the bank to act in your best interests. Appears she got a mortgage principle cram down of 100k. Hope that was at current property value. Those contemplating short selling their home better do their research and at the very least get the 15k to 25k home owners are getting now to unload. If they offer 3k laugh and be patient. Your offer will get far better while you wait and save like u never have before.

    Your upside down property is a CASH COW if you just read and educate yourself instead of crying how unjust everything is. Lastly, like in the story, If you accept a loan mod it better reflect the current market value or at the end of the term place you at current value.

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  12. ARDELL

    RE: Kary L. Krismer @ 10

    The case back in the 80s had the same result. Deemed illegal to not disclose the “hidden contingency”. Kind of like “silent seconds” and sins of omission.

    In this day and age I can’t imagine a seller not knowing if the buyer of their home owned the house they are currently living in, or if they are renting, or can’t qualify for both payments at the same time.

    Isn’t that covered in the pre-approval letter? Wouldn’t the pre-approval say “conditioned on the buyer’s home at xx st selling prior to purchase.”?

    I have had buyers tell me they don’t need to sell in order to buy, but often they mean they are not getting their down payment from the current home. I have to tell them it depends on whether the new lender will let them carry both payments, not whether or not they are getting any money from the sale.

    But the pre-approval letter should cover that better in 2012 than it did in the 80s, don’t you think?

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  13. ARDELL

    For those who did not read the full case, the agent at time of release became the buyer of the home…and then failed to close. So it was not simply an agent scenario, and I’m not sure carries the precedent some think it does.

    I’m sure the agent becoming the buyer of the home at the time the release was signed, and then failing to close, had some impact on the decision in that case.

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  14. Kary L. Krismer

    By ARDELL @ 12:

    But the pre-approval letter should cover that better in 2012 than it did in the 80s, don’t you think?

    There are all sorts of pre-approval letters—unfortunately. But yes, ideally those things should be covered.

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  15. Kary L. Krismer

    By ARDELL @ 13:

    For those who did not read the full case, the agent at time of release became the buyer of the home…and then failed to close. So it was not simply an agent scenario, and I’m not sure carries the precedent some think it does.

    I’m sure the agent becoming the buyer of the home at the time the release was signed, and then failing to close, had some impact on the decision in that case.

    I think that might have just increased the damages, because it increased the time that the property was needlessly tied up in a declining market. It was the first transaction where the negligence was found. They didn’t find a breach of contract on the second transaction where he tried to buy.

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  16. ARDELL

    RE: Kary L. Krismer @ 15

    Yes…but…what seller wouldn’t sign that release if they thought they instantaneously had another buyer in escrow, and one they thought was better. Someone they trusted. I’m sure that the means of getting the seller to sign the release in the first transaction being the agent’s promise to buy their house instead…had some impact on the Judges decision. There was no way not to find for damages given the entirety of this scenario, regardless of where the donkey got pinned.

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  17. John Bailo

    Bicycled past my local realtor (Newberry) today.

    LCD sign: 30 3-bedroom Homes for under $100,000

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  18. Kary L. Krismer

    RE: ARDELL @ 16 – I mis-read your earlier post. I agree that could affect the jury.

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  19. David Losh

    I read some of Lennox Scott’s blog, and he even reposted his Pyramid schematic.

    Lennox is involved in the Real Estate industry. For better, or worse he is looking for an economic solution. He has a lot of good information that he puts out there, and you can either use it or not.

    What I’m reading here is another squabble about something that required a court action when it should have never gotten that far.

    So help me out here, because this isn’t making any sense to me. What information do you think is available here, on this blog, or over on the redfin forums, or at something like a Trulia?

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  20. Kary L. Krismer

    By David Losh @ 19:

    What I’m reading here is another squabble about something that required a court action when it should have never gotten that far.

    So help me out here, because this isn’t making any sense to me. What information do you think is available here, on this blog, or over on the redfin forums, or at something like a Trulia?

    Assuming you’re talking about Craig’s case, the defendants presumably wanted to roll the dice on the the issue of whether their release was effective, rather than pay out six figures to settle. Or conversely, maybe the plaintiff wanted to roll the dice rather than accept the defendants’ settlement offers, if any. And then when the defendants lost at the lower court level, they wanted to roll the dice there. I would really question that last decision, but I don’t have all the facts, and thus really can’t judge any of the decisions.

    I don’t understand your question about information on various websites. Please rephrase.

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  21. Michele Elisabeth

    The reason Lennox’s blog seemed to disappear is cuz his long time PR/communications person left JLS. He hasn’t had many posts in her absence. I think she’s running PR at Windermere now.

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