Whatcom Home Stats: Washington Real Estate - New Foreclosure Legislation

Washington Real Estate - New Foreclosure Legislation

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.

Comment balloon 3 commentsTara Camp • May 30 2008 12:41PM

Comments

Sounds like the state of Washington has pretty pwerful lobbyists.

Posted by Sidney Jimenez, CDPE, ASP (Keller Williams Realty SW) over 9 years ago

Tara,

I'm in Seattle and what our corp attorney told us is that we now have huge liability working with any short sale or foreclosure on either side of the deal.  And if we are the selling agent and the deal closes within 20 days of the foreclosure date then both the selling agent and buyer has fiduciary responsibility to the seller and that duty is above the duty to them selves and attorneys can sue and get 3x damages up to $100,000 plus attorney fees.  Think some ambulance chasers will get on board with that one?  The worst piece of legislation ever passed in the State of Washington.

David Bell

RE/MAX Metro Seattle

Posted by David Bell (RE/MAX Metro) over 9 years ago

Thanks for your comments...

David, I posted this blog before I was informed of how it pertains to Agents.  I thought it was ridiculous before...it seems that no one is able to help these folks in foreclosure.  If you do the state is giving them legal action to ruin our life, as well as, theirs. 

So to summarize a few points, a buyer can't make a profit on the purchase of a pre-foreclosure without disclosing that profit to the seller.  If the profit exceeds any disclose amount the buyer of the property has to give the excess proceeds to the seller.  If the seller feels like they were taken advantage of at any point they can sue.  And if the Agent (that the seller hires), ends up selling the house for them inside of 20 days of auction, they can be sued.  Huh?  What about sueing the agent for walking away from a contract 20 days before the auction?  Now that makes more sense to me.

 

Posted by Tara Camp (Keller Williams Western Realty) over 9 years ago

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