Michigan Association of REALTORS®

Add a Revenue Stream: Launch a Foreclosure Division

Increased foreclosure rates amid a weak housing market give you an opportunity to expand your business while also helping distressed home owners.

Real estate professionals who establish foreclosure divisions have the ability to let struggling home owners know what their options are; the opportunity to either purchase the property or list it for sale; the security of knowing there will be business even during downturns; and the chance to boost revenue through increased listings, cash acquisitions, land contract sales, and property rentals.

Before launching a foreclosure division, experts recommend that you build up enough cash to acquire foreclosed properties, put together information for struggling borrowers regarding their options and deadlines, gain an understanding of foreclosure laws, and perform title and lien research for each property.

You also would be wise to read local foreclosure notices, inspect each property in person, establish a means of generating pre-foreclosure leads, and network with loan officers and other professionals involved in the foreclosure process.

Source: REALTOR® Magazine Online

With the help of McClelland & Anderson, we are taking the most commonly asked questions from our legal hotline and putting them in e-news. We will be featuring a different question each issue.

QUESTION: I represent a buyer who has entered into a purchase agreement. My buyer was not satisfied with the home inspection and has decided not to buy the house. The purchase agreement clearly states that if the buyer was dissatisfied with the inspection report he could terminate the contract and receive a full refund of his earnest money deposit. The sellers disagreed with the buyer and have stated that they want the buyer’s deposit. I’m of the opinion that I can release the money to the buyer based upon the clear language of the purchase contract. Am I correct?

ANSWER: NO. Rule 339.22313(6) states:

Disbursement of an earnest money deposit shall be made at consummation or termination of the agreement in accordance with the agreement signed by the parties. However, any deposit in the trust account of the broker for which the buyer and seller have made claim shall remain in the broker’s trust account until a civil action has determined to whom the deposit must be paid, or until the buyer and seller have agreed, in writing, to the disposition of the deposit (emphasis added). The broker may also commence a civil action to interplead the deposit with the proper court.

Since the seller is making a claim to the earnest money, you cannot release the money to the buyer. The fact that it seems quite likely that the buyer would prevail in any litigation over the earnest money deposit does not mean that you can release the earnest money to the buyer over the objection of the sellers.

Photos of the 2007 Convention & Expo are now available to view and purchase through Guys and Doll’s Photography of Mt. Pleasant. To view the photos visit www.guysanddollsphotography.com and click on client images. Your username is MAR2007 and the password is 13344. Photos on this site are from the Past President’s Dinner, REALTOR® of the Year Reception and award ceremony.

If you attended the event, do not forget to take a few minutes and fill out the post-event survey. MAR is always looking for ways to improve its member services, and your feedback is greatly appreciated.

The IRS unveiled a special new section on IRS.gov for people who have lost their homes due to foreclosure. The IRS also reassured homeowners that, although mortgage workouts and foreclosures can have tax consequences, special relief provisions can often reduce or eliminate the tax bite for financially strapped borrowers who lose their homes. The question and answer page on IRS.gov has a variety of information, including a worksheet designed to help borrowers determine whether any of the foreclosure-related relief provisions apply to them.

Leave the interest payments behind this holiday season, with the Michigan Association of REALTORS® Visa® Platinum Card, now offering 0% APR for twelve billing cycles*! Wrap up great holiday memories with this unique card, knowing you’ll pay no interest until next winter. The Michigan Association of REALTORS® Visa is perfect for holiday shopping, but you need to switch now to save. Plus, you’ll benefit our organization and earn great rewards with every purchase!

The Michigan Association of REALTORS® Visa® Platinum Card also provides great benefits, including:

This Visa Platinum card issued by U.S. Bank is now the only card that supports the Michigan Association of REALTORS®. Upon receiving your new card, the Michigan Association of REALTORS® receives a payment from U.S. Bank and then we will continue to receive a percentage of each net purchase you make on your card. This helps us offer REALTORS® comprehensive professional support: addressing advocacy and legal issues with a strong and articulate voice, supporting educational requirements, and providing timely communication on our website and through our printed publications.

Grand Traverse Resort & Spa near Traverse City, recently received the Elite Meetings Advisory Board’s “2007 Elite Certified Award,” an endorsement given only to resorts and hotels exceeding industry standards in accommodations, activities, amenities, food and beverage, meeting facilities and service.

MAR members will have a chance to see first-hand this excellence, as the MAR 2009 Convention & Expo will be held at the Grand Traverse Resort & Spa. Check the MAR Web site for additional details as they become available.