I’ve been told by my broker that this is illegal, but I’d sure like to help my client.
Until very recently your broker was essentially right. While not “illegal”, CA Civil Code 1695 required that anyone representing an equity purchaser (essentially an investor) be bonded. Unfortunately the bond requirement was worded in a way that made it impossible to get and therefore left no way to legally represent an investor.
That all just changed. In a recent court case against a Realtor on exactly this issue the bond requirement was found to be unconstitutionally vague. And on March 26, 2008 the California Supreme courtdenied review of the case (Schweitzer v. Westminster Investments (2007) 157 Cal. App.4th 1195). This provides a pretty strong precedent and may give your broker sufficient comfort to move forward. The California Association of Realtors is providing support on this issue and is updating their notice of default purchase agreement to take into account the remaining requirement in civil code 1695. If you current broker is still unwilling to work with you on this, it should be easy to find anothe broker that now is.
Make sure you use the correct forms!!! there is a Homeowner protection act that requires special forms and a 3 day right of recission on property that is being purchased by an investor that has an NOD filed…
I am sure Sean can quote the specific bill and definately contact CAR and use the correct forms and disclosures.
Right Bob - in CA you need to exactly follow the guidelines in Civil Code 1695. Members of CAR can use their Notice of Default Purchase Agreement which was recently updated to reflect the recent court case.
This is great. I think I passed up on a good house for a great deal
because I lost patience waiting on the short sale. It does take a while!