Well, I've bloged about this several months ago. Pre-Approved Short Sales!! I closed my first one 2wks ago and from list to close total time was 40 days. Yes 40 days, I recieved a list price 96 hours after submitting my BPO, which was priced 10K below my BPO value. I got multiple offers within he first7 days on the market and the property sold for 5K more than list price (Closer to my BPO value). My local board rules require us market any short sale as such, which in the past and sometimes hinders offers beacuse all of us know that there is nothing short about a traditional shortsale.This did not increase the time on the Market, as we advertised it as a HomeTeleos Pre-Approved Short Sale. This program has officially launched and you may see it in a City or County near you. Its true when you see HomeTeloes Pre-Approved short sale, then really are short sales. www.hometeleos.com I'd love the hear from anyone else if they are doing anything similar or have heard of any similar programs launching. I think it will be a matter of time before others follow if they have not already done so.
Its just a matter of time before the big boys go straight to the banks. I am sure that is happening right now. I was just approached by a company to do short sales and they want half of the commission. By the time you pay a franchise fee it makes it so there is no money left for a transaction that may not close.
I understand your confidence in the program and I do believe it will and does work for many however, I am simply not comfortable with assuming the risk of the Indemnity Clause. My opinion is, it wouldn't have been included in the agreement unless someone thought it was a possibility.
I am still working on getting some type of protection against the clause and hopefully I will find an insurer who can work with it but, until I do, I am steering clear.....just too much potential risk.
Jessie, I gues you an say I'm assuming the risk. However what I can tell you I have only closed one trasnsaction and have 2 others. On both ocassions the homeonwers have attemted loan mods and were declined. Also in both cases the home onwers own other propeties that are now their primary residences. (As far as taxes are concerned you know the deal with that, my advise is always to consult your accountant or tax profession because that is not what I do. In all three cases each client has beend advised of that and 3 out of 3 had already done so prior to me telling them.) Yes a lot of trust is being put into the lender and hometelos to really screen; however we don't just leave it up to them. Part of our job is talking to these people a well. The program itself is not designed to force people to short sale. It is for persons that have no other options and the fact that the lender is agreeing to do a deed in lieu if the property dosen't sell in the allotted timeframe speaks miles. As this recession deepens what we will find out is that loan mods will not work for everyone, and some don't even want them they just want out. I spoke to a direct source at one of my REO Contacts and was advised they are not foreclosing on clients. This is the same lender that is a major client of hometelos. This program an others similar will soon be major players as the REO train drys up. Everyone's gotta have a comfort zone and I'm not saying operate outside of it.
Our Attorney's concern was if a client feels the bank referred him to HomeTelos as an act to prevent foreclosure versus giving the homeowner due diligence and therefore the homeowner feels he missed out on being able to save his home, then we (the listing agent) are on the hook for all expenses, fees, judgements, etc...for defending myself and HomeTelos. What if, someone from the bank or HomeTelos misrepresented the clients tax situation, or forgot to discuss the one loan modification that could saved this clients home, or signed a promissory note when it wasn't necessary, get my point?
In other words, we (as listing agents) can't control the message the banks are giving out to the homeowners and or what HomeTelos is giving out to the homeowners therefore, why are we being asked to indemnify them for actions that will be completely out of our control?
I get the part about asset protection but, how is that possible for me to do with how the lender is convincing these homeowners to work with HomeTelos? I can't manage something i have no control over or are not a part of.
Let's be up front on this, the clause specifically says, "NEGLIGENT OR WILLFUL ACTS OF OMISSIONS OF HOMETELOS. " and, the way it was explained to me is, this phrase is the catch all.
So, back to my original question, are you simply assuming the risk or have you been able to insure against it? If you have been able to insure against it, who are you using because, I would like to be a part of this program however, I don't plan on putting my business at risk, it's just too much of a risk for me without some type of protection
You are sooo right!! , and that very cluase will keep several brokers and companies way from the program. I spoke to another local Realtor in my area who works on the First Preston Fannie Mae account and the same thing went for his company. My solution is asset protection. If your a broker, Incorporate, and run it like a true corp. If you work for a large firm well they've got way too much to loose for one account so the Liability alone puts too much at risk. What I can tell you is you will berunning the listing just like any shortsale of your own, hometelos is acting as the referral platform, which expidties the lender approval of the Short sale. So title is ran by a company of my sellers or my choice, local, all disclousres are signed by my sellers, and hometelos is kept in the loop for which they get a referral fee. I don't see the lability of willful acts however I'm not an attorney; Title companies have to have clear title as well as a settlement letter from the lender to close short, and buyers are getting every disclousre if not more due to the potential. I guess you could say you would run the same risk if you were conduction your own shortsale from start to finish, because that is truly what is going on with this transaction. The only difference is it takes 30 -45 days to close vs 90 to 300. The latest few that I have revieced were referred into the hometelos program by their lenders.
Laughlin & Assoc puts on a great seminar on asset protection and Corps
I have a copy of the HomeTelos contract and was wondering if you agreed to the indemnity clause? If so, did you obtain additional insurance to protect you against any claims or are you taking on the liability personally? We had our Attorney read over their agreement and he say's that if any claim is ever filed against HomeTelos on any deal we work then we are on the hook for all HomeTelos expenses rather due to their negligence or not. He said this also includes legal fees and judgments.
So, we have been trying to find an insurance company that will insure us against the clause but can't.
I have gone through 9 different insurance companies now and, none of them will give me additional coverage for the HomeTelos Indemnity clause.
I blogged about this back on February 26, 2009 at 10:53am with a blog titled, “WARNING!! Short Sale and REO Listing Agreements open you to HUGE LIABILITY!”
Here is the actual language…….”Listing Broker additionally agrees to indemnify and hold harmless the indemnitees for and from all claims brought by, through or under owner and EXPRESSLY INCLUDING WITHOUT LIMITATION THOSE CLAIMS PRETAINING TO OR ARISING FROM NEGLIGENT OR WILLFUL ACTS OF OMISSIONS OF HOMETELOS.
I've started seeing a few lately meself in the West/Northwest Atlanta metro area. There are people looking for these and if the banks continue to do pre-approvals, they will become hot items! Remove the waiting period to get the short-sale approved and watch the offers come in!
Comments
I am still working on getting some type of protection against the clause and hopefully I will find an insurer who can work with it but, until I do, I am steering clear.....just too much potential risk.
Our Attorney's concern was if a client feels the bank referred him to HomeTelos as an act to prevent foreclosure versus giving the homeowner due diligence and therefore the homeowner feels he missed out on being able to save his home, then we (the listing agent) are on the hook for all expenses, fees, judgements, etc...for defending myself and HomeTelos. What if, someone from the bank or HomeTelos misrepresented the clients tax situation, or forgot to discuss the one loan modification that could saved this clients home, or signed a promissory note when it wasn't necessary, get my point?
In other words, we (as listing agents) can't control the message the banks are giving out to the homeowners and or what HomeTelos is giving out to the homeowners therefore, why are we being asked to indemnify them for actions that will be completely out of our control?
I get the part about asset protection but, how is that possible for me to do with how the lender is convincing these homeowners to work with HomeTelos? I can't manage something i have no control over or are not a part of.
Let's be up front on this, the clause specifically says, "NEGLIGENT OR WILLFUL ACTS OF OMISSIONS OF HOMETELOS. " and, the way it was explained to me is, this phrase is the catch all.
So, back to my original question, are you simply assuming the risk or have you been able to insure against it? If you have been able to insure against it, who are you using because, I would like to be a part of this program however, I don't plan on putting my business at risk, it's just too much of a risk for me without some type of protection
You are sooo right!! , and that very cluase will keep several brokers and companies way from the program. I spoke to another local Realtor in my area who works on the First Preston Fannie Mae account and the same thing went for his company. My solution is asset protection. If your a broker, Incorporate, and run it like a true corp. If you work for a large firm well they've got way too much to loose for one account so the Liability alone puts too much at risk. What I can tell you is you will berunning the listing just like any shortsale of your own, hometelos is acting as the referral platform, which expidties the lender approval of the Short sale. So title is ran by a company of my sellers or my choice, local, all disclousres are signed by my sellers, and hometelos is kept in the loop for which they get a referral fee. I don't see the lability of willful acts however I'm not an attorney; Title companies have to have clear title as well as a settlement letter from the lender to close short, and buyers are getting every disclousre if not more due to the potential. I guess you could say you would run the same risk if you were conduction your own shortsale from start to finish, because that is truly what is going on with this transaction. The only difference is it takes 30 -45 days to close vs 90 to 300. The latest few that I have revieced were referred into the hometelos program by their lenders.
Laughlin & Assoc puts on a great seminar on asset protection and Corps
I have a copy of the HomeTelos contract and was wondering if you agreed to the indemnity clause? If so, did you obtain additional insurance to protect you against any claims or are you taking on the liability personally? We had our Attorney read over their agreement and he say's that if any claim is ever filed against HomeTelos on any deal we work then we are on the hook for all HomeTelos expenses rather due to their negligence or not. He said this also includes legal fees and judgments.
So, we have been trying to find an insurance company that will insure us against the clause but can't.
I have gone through 9 different insurance companies now and, none of them will give me additional coverage for the HomeTelos Indemnity clause.
I blogged about this back on February 26, 2009 at 10:53am with a blog titled, “WARNING!! Short Sale and REO Listing Agreements open you to HUGE LIABILITY!”
Here is the actual language…….”Listing Broker additionally agrees to indemnify and hold harmless the indemnitees for and from all claims brought by, through or under owner and EXPRESSLY INCLUDING WITHOUT LIMITATION THOSE CLAIMS PRETAINING TO OR ARISING FROM NEGLIGENT OR WILLFUL ACTS OF OMISSIONS OF HOMETELOS.
I know of another agent in my market that has success with Home Teleos. I am going to get sign up
to start doing business with Home Teleos.
Congrats Jonathan!