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CAR Highlights, MAR General Membership Meeting Tuesday, May 13th – MAR Monday Memo 05/12/14

Good morning MAR members!

So many buyers, so many listings, so many offers!  Everyone I know is running around at a frenzied pace, but it does seem that more properties are coming on the market.

I’m looking forward to seeing many of you at the MAR General Membership meeting tomorrow, Tuesday May 13 at 9:30 AM, at Embassy Suites in San Rafael.  The featured speaker is Sarah Sutachan, who is the Manager of Broker and Real Estate Finance Outreach for CAR.   This is the “economic update” traditionally provided by Leslie Appleton-Young.  MAR member Steve Dickason will be giving his always-informative and valuable Marin Market Update.

This week, after Tuesday’s MAR General Membership meeting, MAR CEO Andy Fegley, Federal congressional key contact Kay Moore and I are off to Washington DC for the National Association of REALTORS mid-year meetings.  We will be meeting with Congressman Jared Huffman’s staff and briefing them on all of NAR’s matters before congress.  I will be reporting back on the results of those meetings next week.

Andy Fegley and I also visited with the City of San Rafael again last week in our ongoing effort to eliminate the increased “double jeopardy” we are seeing in their resale inspection practices.  I feel like we are making some real progress and we certainly have their attention at the highest level of city staff.  City staff had a department-wide meeting to work to improve the process, and they shared a list of their initial thoughts to improve.

MAR’s main concern is the specific instance where non-compliant items that were missed in prior resale inspections…years ago..are being forced into compliance today…years later…after being missed previously by San Rafael.  Buyers thus made purchase decisions based upon incorrect reports generated by San Rafael.  Buyers and sellers have a reasonable expectation that these mandatory inspections they are paying for are correct.  They finally seem to be listening to us, and I believe there will be some meaningful reforms in the near future.  Thomas Ehrens, chief building inspector, did ask me to relay two things to MAR membership:  (1) they don’t enjoy the process of forcing compliance…he said that there is no pleasure in the “gotcha” moment; and (2) they absolutely are not in the resale inspection business for the money generated by their compliance efforts.  In fact, they likely lose money in that part of their business.

First off, I need to get something off my chest.  What’s up with everyone “pre-opening” escrows?  It really does seem like everyone.  I get it if you’ve got a squirrely property that needs research, or a short sale, but why does every squeaky clean home with no mortgage and no easements have an opened escrow too?  I just don’t get it.  Yes, as a listing agent I like to control who is doing the escrow, and yes I like to send business to my friends.  But the buyer is paying for title insurance and the escrow fee in Marin.  Let the buyers use who they want.  Just my opinion, I felt like sharing.

Thank you for all your feedback on the auction report I shared last week.  Based upon the feedback, I gather we’re all learning and picking our way through the…dynamic…business practices of our friends in the auction business and the bankers that use them.  If anyone knows anything important that I didn’t share…please share!  Like all of us, I’m trying to understand this new emerging business model.

As promised, here are some of the highlights of the CAR meetings in Sacramento earlier this month:

Governor Jerry Brown kicked the whole thing off with an early appearance at about 9:15 on Wednesday’s legislative day.  Always entertaining, he seems to be picking up on a current issue here in Marin and likely elsewhere in the state:  local control.  The Governor advocated for more local control, “Let decisions get made locally.  People in Modoc do things differently that people in Berkeley.  Let them make their own decisions.”  I think we can all get behind that as far as housing density here in Marin.  Unfortunately, the Governor and the Legislature don’t always see things the same way…

On legislative day, the Marin contingent joined many of our colleagues from the North Bay Association of Realtors (NorBAR) to meet with Assemblyman Marc Levine’s staff to promote CAR’s position on a number of bills before the legislature:

  • AB 2416, which allows employees with a wage dispute to record a lien against an employer’s property, even though no connection with the property itself is required, no notice is required, and thus no due process.  It’s like a mechanic’s lien with abbreviated notice, and it allows this wage lien to be a “super lien” ahead of other liens.  This will cloud title, obviously.  Other legal remedies already exist, and CAR opposes AB 2416.
  • AB 2039 relates to last week’s discussion about indemnity clauses that lenders and auction companies are forcing on sellers and listing brokers.  Again, this is where an online auction is used to “validate” the sales price in a short sale.  In essence, the lender forces the seller and listing agent to turn over the listing for an online auction, and also forces those parties to indemnify the auction company against any wrongdoing during the rest of the transaction.  AB 2039 prohibits this indemnification language, and CAR strongly supports this bill.
  • SB 391 has been around for a while, the better part of two years, and CAR has been fighting against it much of the time.  This is the bill that adds a document recording fee to most real estate-related documents that do not relate to a sales transaction.  Think refinancing.  Or changing title status after the death of a family member.  These fees will go toward funding affordable housing.  In the “death of a spouse” example, these new fees could add up to an additional $440 bourdon on the surviving spouse.  CAR supports affordable housing, but feels that it’s a society-wide issue and the bourdon should be shared across all segments of society, not just property owners.  Further, they’re calling it a “fee” (to cover costs directly related to the transaction), but it’s really a “tax” (because they’re moving the money to pay for something else).  All part of a scheme to only need a simple majority to pass rather than a super majority for a tax.  CAR continues to strongly oppose SB 391.
  • Finally, AB 2169 seeks to validate existing legislation that REALTORS and licensees are “independent contractors” and not “employees”.  There are existing regulations that go back decades that state just that, but in a recent lawsuit a judge ignored those precedents and unilaterally decided that because brokers supervise their agents, then those agents must be employees.  AB 2169 seeks to clarify that supervision does not necessarily equal employment.  Most all of us are indeed independent contractors, and AB 2169 seeks to clarify existing law.  CAR strongly supports AB 2169.

CAR CEO Joel Singer had a great presentation on the current state of the Real Estate economy in California, and I’ll share some of the highlights of that presentation in the coming weeks.

That’s it for now, I’ll let you know how things go at NAR in Washington, DC.

I wish you a safe and prosperous week!