I went to a Investor Networking Group on Wednesday night to hear about the new WA state foreclosure legislation...I found it quite ridiculous! It was presented by a local attorney, Doug Owens.
The gist of it is that the state sees it more beneficial for the homeowner to go into foreclosure rather than to short sale or just plain quick sale their property. "They" (the state) think it's more likely that the homeowner comes out ahead if they allow their property to go into foreclosure. "They" think the homeowner will recapture some of their equity if the sale goes to the courthouse steps and someone actually pays more than what is owed. Guess what state, there is no equity!
To get a bit more detailed, if an investor or joe blow buyer goes out and solicits a pre-foreclosure and strikes a deal with the owner and then later sells the property the buyer must disclose this amount to the seller and ask permission to make this profit. If the profit comes in higher than the original amount the buyer must give all subsequent profits to the homeowner, even if it's a rehab, yada, ya.
Get this, if you're using a Notice of Default list to do your marketing to find and buy properties, then you owe the sellers a fiduciary duty and must disclose everything. O.k., so I realize there are some unethical folks out there and I've dealt with my fair share, but this is going a little too far. What if a family wants to buy a property and they say, "hey lets look for a discounted property by looking for a pre-foreclosure." Guess what their suspect, even if they go through a realtor. Yep, that's right. Or is it Wrong?
Then the legislation turns around and says that if it's listed, it's ok? Pretty Vague, huh? Well, I'll stop my ranting now, matter of fact I don't know why I'm ranting. Better for us as realtors, right? There's only one way out for the homeowner, through us. Well, I think it's wrong! I don't think this is protecting the homeowner. I think it sucks. Sorry homeowner, the government isn't going to help you like "they" said they would, neither can the investors with money to buy your property, nope, you have to wait for a typical buyer to come along and qualify for a bank loan and save you.
This is just the tip of the iceberg, read more about WA State Foreclosure Legislation, although you'll probably need an attorney to interpret it.