When making a referral, realty agents should defer to clients' best interest

Question: As a real estate agent, I want to give buyers good advice but also limit my liability. Here are three schools of thought on how agents should handle home-inspector recommendations: Provide a list of available inspectors and advise buyers to choose whomever they want; recommend one inspector who regularly works for the real estate company, who belongs to a large network/franchise and who indemnifies the real estate agent and company; don't recommend anyone. Which of these options would you recommend?



Answer: If agent liability and client representation are primary considerations, there are problems with all three options.

The problem with providing a list of available inspectors and no guidance is that it would include the qualified, the unqualified and the mediocre.

What if your buyers choose one of the less qualified names on the list? In that case, disclosure of property defects would be incomplete, and you could be blamed for placing that inspector's name on the list.

The problem with always recommending a single inspector who indemnifies the agent and company is that the inspector is being chosen for reasons other than actual competence at finding defects. Such recommendations could result in undisclosed defects being discovered after the sale, and that spells liability.

Recommending no inspector and advising buyers to go shopping is problematic because most buyers have no idea how to choose a home inspector. If they pick someone who misses many defects, they can blame you for not providing direction for the hiring of local home inspectors.

The best way to serve clients and minimize your liability is to recommend the home inspector whom you have come to recognize as significantly more thorough than the competition. If two or more inspectors meet this standard, that's even better.

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source: latimes.com

The bohemian vibe of Silver Lake

Silver Lake has retained the bohemian flair that marked its rise as a residential neighborhood near downtown a century ago. Also unchanged are the views of the Silver Lake Reservoir and the hills that surround it.

Silver Lake, named for Herman Silver, a member of the city's first Board of Water Commissioners, is sandwiched between Sunset Boulevard, Interstate 5, the Glendale Freeway and Hyperion Avenue.

Relatively close to downtown, the area's initial residential boom came in the 1920s and '30s, as actors and others associated with the film industry moved here to be near the first Walt Disney studio, at Hyperion and Griffith Park Boulevard, and other soundstages built in the area.

The community was considered fairly gritty as recently as the 1980s. And although it has cleaned up and property values have risen, the area has maintained a distinctly bohemian vibe. That's due both to the film, television and music industry folks who continue to live there as well as the gay and lesbian population that found it a welcoming, affordable area nearly a century ago.

Perhaps more than any other neighborhood of comparable size, Silver Lake has some of the best examples of L.A.'s diverse architectural styles. Initially dominated by Spanish-style homes in the 1940s and '50s, the area saw a wave of what have become known as Midcentury Modern designs from architects such as Richard Neutra and Rudolph Schindler.

What it's about

City Council President Eric Garcetti, whose 13th District includes Silver Lake, said the area "has been able to maintain its status as one of the most diverse and creative neighborhoods in Los Angeles."

Garcetti cited both city and private developments that have recently gotten underway or have just come to fruition.

The city is wrapping up work on a landscaped jogging path around the Silver Lake Reservoir and just broke ground on a new library.

Among the new, privately developed projects are two on Sunset Boulevard, including a loft-style condominium project developed by the Kor Group. Twenty-five units in the 43-unit building at 4111 Sunset Blvd. have been sold.

Prices ranged from $730,000 to $925,000.

Insider's view

Joe Mellis, a Silver Lake resident and agent with Prudential California Realty, John Aaroe Division, said he was drawn to the area in part by the strong sense of community that has built up in recent years.

"Silver Lake is having its own baby boom," he said. "It has a real community -- human scale to it. People are out on the street, they care about their neighbors and stay in touch with the well-being of the community and the area."

Garcetti echoed that view. Silver Lake's south side, along Sunset Boulevard, "is one of the few places in Los Angeles where people walk, taking advantage of the independent cafes and stores that make the neighborhood so appealing," he said.

Housing stock

Homes on the market now range from a low of just under $500,000 for a property in need of a full overhaul to more than $3 million for a 6,000-square-foot hilltop property.

Prices have declined slightly, and some houses are staying on the market longer, as they are throughout the region.

Also on the market now is a 2,700-square-foot Mediterranean home on a hilltop with canyon views. The three-bedroom, 2 1/2 -bath home is listed for $1,495,000, reduced from its original asking price of $1,579,000.

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source: latimes.com

Style diva Rachel Zoe selling Hollywood Hills home

On a bad-hair day in Hollywood, it's Rachel Zoe to the rescue.

One of Hollywood's hottest stylists, she is known for making over startlets with her own signature look -- long blond hair, spray-on tan and sexy '70s eyes.

Now she is ready to use her talents on the dream house she is planning. Zoe and her husband, entrepreneur RodgerBerman, want to build after they sell the home they own above Sunset Boulevard in the Hollywood Hills. They are asking close to $3 million.

The 2,742-square-foot Midcentury house has two bedrooms and a convertible den, three bathrooms, walnut floors, walls of glass, an open living room, a family room, two fireplaces, a master-bedroom suite, a pool, a spa and a fire pit. The house, built in 1956 and updated, sits on a promontory overlooking the city. The landscaping "creates a sanctuary of privacy," according to marketing materials.

Zoe is co-author of "Style A to Zoe: The Art of Fashion, Beauty & Everything Glamour," written with The Times' Rose Apodaca. Her clients have included Nicole Richie, Kate Hudson, Anne Hathaway and Demi Moore. She reportedly commands a hefty $6,000 a day to prepare a starl for the red carpet.

She has appeared on "Project Runway" and "The Simple Life" as herself.

Richard Ehrlich of Westside Estate Agency in Beverly Hills has the listing.

That seven-car garage is worth a few extra points

Jerry Rice, the legendary wide receiver who joined the 49ers in 1985, and his wife, Jackie, are downsizing now that one of their children is in college and another is headed there.

The Rices, who plan to stay in the San Francisco area in a smaller home, have listed their Atherton, Calif., estate at $22 million.

The three-story home took three years to build. It was completed five years ago. The house has six bedroom suites in 15,000 square feet, a library, an office, a family room with a full bar, a wine room, a crafts room, a full gym with a bathroom, a home theater, a game room and an underground seven-car garage.

The 1.4 acres of grounds are set behind gates with a pool, spa, covered veranda with built-in heaters and speakers, a stone outdoor fireplace and a guesthouse. There are lawns, a pond and towering trees.

The 45-year-old former football star won three Super Bowl rings as a San Francisco 49er. Regarded as the most prolific pass receiver in pro-football history, when he retired from football in 2005 after 20 seasons he held numerous NFL records for number of touchdowns, receptions, receiving yards and consecutive games with a catch, among others.

The house, which is "California French" in style, is on the market for the first time and will be shown by appointment to qualified buyers.

Pierre Buljan of the Pierre Buljan Group/Cashin Co. in Burlingame, Calif., has the listing. Go to www.pierrebuljan.com for more photos of the estate.

One down, one to go in Los Feliz

Jeff Lewis, star of the Bravo reality show "Flipping Out," is keeping busy on and off camera.

Lewis, a professional house flipper, recently sold a Spanish-style 1920s home in Los Feliz for about its $4.5-million asking price. The more than 5,000-square-foot house has four bedrooms, six bathrooms and a guesthouse.

Then Lewis listed a smaller Los Feliz home at slightly more than $1.8 million. That house has three bedrooms and 2 1/2 bathrooms in 2,000 square feet, which he had turned into a "redone, gated, modern home."

"Flipping Out" isn't the only TV show in Lewis' life. He recently appeared as a guest on "The Ellen DeGeneres Show," "Nightline" and "20/20."

Estate makes rare market appearance

For the first time in 50 years, the Shavelson estate in Studio City has come on the market. Asking price: nearly $4.8 million.

Melville Shavelson, who died at 90 in August, wrote, directed and produced dozens of films featuring Lucille Ball, James Cagney and Frank Sinatra. Shavelson created the Emmy Award-winning TV series "Make Room for Daddy" and "My World and Welcome to It." He was also a former president of the Writers Guild of America, West.

The one-story, 1930s traditional, on 2.6 flat acres, has a tennis court, fruit orchard, pool, rose garden and sweeping lawns. It has four bedrooms and three bathrooms in 3,497 square feet.

Joe Breckner of Coldwell Banker, Studio City, and Ellen Bergeron of Coldwell Banker, Brentwood Court, have the listing.

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source: latimes.com

Suspect steering practices jack up costs for buyers and sellers

WASHINGTON -- Rigged appraisals, lax underwriting and toxic loan products may dominate the headlines, but they are hardly the only issues plaguing residential real estate.

The federal government and state regulators are targeting other housing-related misdeeds that can cost consumers, -- especially under-the-table kickbacks among builders, real estate brokers, loan officers, mortgage bankers and title insurers. Buyers and sellers are rarely aware of the cash changing hands, and as a result they are paying needlessly higher prices for services.

In a series of legal moves during the last five weeks, regulators have reached settlements with six major home builders and one of the largest title insurers in the country. Under the settlement terms, the firms are scheduled to pay the government a total of $6.4 million, while denying they committed any illegal acts.

The largest settlement was announced the week before Thanksgiving. First American Title Insurance Co. agreed to shut down 84 "affiliated partnerships" in Florida with real-estate brokers, mortgage brokers, banks and builders. Federal and state investigators charged that although the affiliates claimed to be title companies, they were actually referral conduits that performed few, if any, title services. Officials said they existed primarily to steer business to First American, which split consumers' insurance premiums with participating "partners."

In effect, according to the investigators, builders, lenders and realty firms could pocket part of buyers' closing costs without their customers' knowledge. On paper, the partnership affiliates appeared to be ordinary title agencies, carrying names such as Security First Title, USA Title Partners, Discount Title Servicesand the like.

But investigators from the federal Department of Housing and Urban Development and Florida insurance regulatory agencies found that "all regular title services required to effect title insurance were performed by First American, not the limited partnership agency," which was essentially a shell entity constructed "to compensate for the referral of the business."

Payments for referrals of home real estate business when little or no services are performed violate the federal Real Estate Settlement Procedures Act, which is enforced by HUD.

Though no example was provided in the settlement agreement, title company referral conduits often work like this: Say you, the home buyer, are charged $2,000 for lender and owner title insurance policies. Your real estate agent has partnered with a title company and agreed to steer all business to the affiliate. All the work is performed by the title insurance underwriter, which receives a steady and profitable flow of business from the referring "partners."

Revenues may be split according to the size of individual partners' stakes in the affiliate. If the stake is 25%, the realty agent or mortgage broker might get $500 out of your $2,000 title insurance premium. If the stake is half, the split might be $1,000.

Buyers typically are provided a disclosure -- along with the paperwork that accompanies a mortgage closing -- that an "affiliated business" relationship exists between the realty firm or mortgage broker and the title partnership. But the boilerplate does not reveal the magnitude of the financial compensation. Otherwise, customers might take their business elsewhere.

The settlements with the six home builders -- Pulte Homes, KB Home, Beazer Homes USA, Ryland Group, Meritage Homes and Technical Olympic USA -- also involved alleged kickbacks from title insurers. HUD investigators charged that the builders' participation in so-called "captive reinsurance" schemes amounted to illegal splits of home buyers' insurance premiums rather than actual sharing of risks with the underwriters.

Bottom line: Before agreeing to direct your title and settlement business to an "affiliate," shop the market for lower fees.

Ask the person trying to steer your business to an affiliate: What financial split will you -- or your firm -- receive from my title insurance premium and other settlement fees? What proof can you offer to me that the fees received by you or your firm will result in cost savings to me?

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source: latimes.com

Lenders look to niche markets for new customers

WASHINGTON -- Despite the meltdown in the sub-prime mortgage sector, lenders continue to devise new and unusual ways -- or dust off little-known products -- to finance borrowers who fit into numerous market niches.

For example, there are now loans that provide an added bit of security for an estimated 16 million professionals who often fall under the classification of first responders. Meanwhile, some lenders are targeting rural home buyers who want to be part-time farmers, while others are offering products to international borrowers who purchase vacation homes in the U.S.

Bank of America was inspired to add an insurance feature to its community-lending product by one of its borrowers, Adam Pierce, a 26-year-old Orange County, Fla., sheriff's deputy who was wounded while on duty in 2005 and left paralyzed.

Police officers such as Pierce, who was shot twice while chasing a suspected drug dealer, face the constant threat that they could be severely injured, wounded or even killed in an instant, and they understand and accept the dangers of their jobs.

But with BofA's Neighborhood Champions Protected Mortgage, at least they'll have peace of mind knowing their families will be protected should tragedy strike. Under the program, the mortgages of police officers, firefighters and medical workers will be repaid up to $300,000 in the event of accidental death, permanent paralysis or dismemberment. Teachers also are covered under this insurance feature.

Coverage, which is free, applies to the first two listed co-borrowers. Better yet, borrowers do not have to qualify, and they receive the insurance regardless of their health status.

Bank of America has grandfathered more than 8,000 existing Neighborhood Champion borrowers into the program, which is aimed at basic housing affordability issues confronting those who are employed in what one of the country's largest financial institutions calls "occupations of honor."

Many also consider farming to be an honorable occupation. Home buyers who farm as a sideline are eligible for mortgages of up to $3 million from Farmer Mac, a government-sponsored enterprise similar to Fannie Mae and Freddie Mac.

Known formally as the Federal Agricultural Mortgage Corp., the little-known government-sponsored enterprise was created by Congress in 1988 to produce a secondary market for agriculture real estate and rural housing mortgages, thereby increasing the availability of long-term credit for farmers, ranchers and rural homeowners.

Farmer Mac doesn't make mortgages directly to borrowers. Rather, it buys the loans made by local lenders. And among the products it buys are part-time farm/residential loans. Under the program, properties must be owner-occupied, single-family detached residences or second homes with enough acreage to support agricultural production. The property can't be just a house on a large lot or in the woods somewhere.

There are no minimum or maximum acreage requirements. But if the property is less than 5 acres, a minimum of $5,000 in annual gross sales of agricultural products must be documented. There is no income requirement for properties larger than five acres.

The large number of international home buyers is another intriguing target for lenders. According to the National Assn. of Realtors, one-third of its members had at least one international client between April 2006 and April 2007. Of those, more than half sold their clients stateside houses.

"All real estate is local, but all buyers are not," says Lawrence Yun, chief economist for the Realtors' group. "We live and do business in a global economy. And with the weak U.S. dollar, compared to the euro, U.S. real estate is now selling at a 30% to 40% discount compared to five years ago."

Foreign nationals often pay cash for their second-home vacation properties. But if they want a mortgage, there are plenty of lenders from which to choose, especially in the hotbed markets of Florida, California and New York, where the international set likes to hang out.

"The timing of foreign nationals' interest in the U.S. is ideal," says Paul Decoff, executive vice president of lending operations at Thornburg Mortgage in Santa Fe, N.M. "As a relatively new and underserved demographic market, international borrowers can be targeted to help alleviate slowing originations that are a result of a softer housing market."

Of course, documenting foreign borrowers is a tad more onerous than underwriting a loan for U.S. citizens. For example, they must provide valid identification in the form of a visa, entry permit or a citizen's ID. Miamibased lender Q Financial Direct also wants a certificate of foreign status (IRS form W-8BEN).

And most lenders require international customers to have the equivalent of 12 months of principal and interest payments safely deposited away in an American bank account.

Real Estate Designers offers totally innovative solutions for your software development, Internet programming, real estate web design and hosting needs. Our service includes domain name registration and real estate web design. Real Estate Designers provides the complete solution including design, application development and marketing.

source: latimes.com