Quote from @Don Konipol:
Quote from @Jay Hinrichs:
@James Wise@Russell Brazil@James Hamling@Don Konipol
read below this is the disclosure that MUST be on all marketing pieces written or on internet that Oregon wholesalers must provide the public. This law went into effect this week.. In addition the wholesaler must have a Wholesalers license which requires Insurance and a bond much like a contractor. No test required though like a RE agent..
Also note the carve out for those that might do land development.. where someone like me might tie up the dirt spend 10k or more ( usually though 50 to 100K) getting entitlements and flipping said contract to a builder developer.
this is clearly directed at the SFR wholesaler and this disclosure also must be presented to the seller of the property prior to the wholesaler going into contract or any equitable interest they may have to flip said contract or property.. Of course if they close on the property FIRST then market it this is not required.. But double close is not going to work either I know a lot wholesalers rely on the double close to get around the laws as well. be interesting to see if any of the wholesaler how to Gurus mention this to their Oregon students.
Only available to Cash Buyers who can close quickly. Buyer pays both (buyer's and seller's) sides of the closing costs. Offers to buy the rights to the purchase contract as written should be made "as-is", and without contingencies. No additional amendments will be made to the contract and assignment will not be subject to any additional conditions. RESIDENTIAL PROPERTY WHOLESALER WRITTEN DISCLOSUREThe person providing this disclosure is a Registered Residential Property Wholesaler. A Registered Residential Property Wholesaler is someone who markets residential property for which the wholesaler has only an equitable interest or an option to purchase and, at the time of marketing, has held such interest or option for fewer than 90 days and invested less than $10,000 in land development or improvement costs associated with the residential property.
A Registered Residential Property Wholesaler shall provide this disclosure:
• To any potential buyers and sellers before entering into a written contract for a residential property wholesale transaction;
• To any Broker or Principal Broker who is engaged to assist the property wholesaler in marketing or listing the property;
• To any Broker or Principal Broker who is assisting a potential buyer in purchasing the property; and
• In all advertising related to the property that is the subject of a residential property wholesale transaction.
The Registered Residential Property Wholesaler:
• Will only have or only has an equitable interest in the property being sold.
• Will not have or does not have legal title to the property and therefore may
not be able to directly transfer title to the buyer.
• Is not a licensed Broker or Principal Broker and therefore might not be
permitted to engage in professional real estate activity.
• Might not be a licensed appraisal specialist and therefore might not be
permitted to provide an opinion as to the value of the property.
DEFINITION OF EQUITABLE INTEREST A person who has an "Equitable interest” in a property means someone that has contracted with the current owner for the right to buy the property at a later date even though they don’t have legal title. The contract may allow the equitable interest holder to sell or transfer the right to purchase the property to someone else prior to close of escrow.
ASSIGNMENT OF INTEREST A Registered Residential Property Wholesaler may assign equitable interest to another party prior to closing for profit.
RIGHT OF CANCELLATION A seller or buyer who enters into a written contract for a residential property wholesale transaction may cancel the contract without penalty by delivery of a written notice of cancellation any time before 12 midnight at the end of the third business day after the receipt of the Residential Property Wholesaler Written Disclosure. The right of cancellation may not be waived. Upon cancellation, all earnest money or deposits shall be returned to the person who provided the earnest money or deposit.
CONSEQUENCES OF NON-DISCLOSURE TO SELLER If the Residential Property Wholesaler fails to provide a Residential Property Wholesaler Written Disclosure to the seller before entering into a written contract for a residential property wholesale transaction, the seller may terminate the contract at any time without penalty and retain any earnest money or deposit paid to the seller or deposited in escrow by the Registered Residential Property Wholesaler.
An escrow agent may disburse the earnest money or deposit to the seller without the need for separate written instructions from the Registered Residential Property Wholesaler if:
• The seller in writing asserts that the Residential Property Wholesaler Written Disclosure was not provided to the seller before entering into the written contract for the residential property wholesale transaction and demands disbursement to the seller of all deposits held by the escrow agent; and
• The seller has provided the escrow agent with a written release and indemnification against all liability arising from the disbursement of the earnest money and deposits to the seller.
LIABILITY FOR DAMAGES If the Registered Residential Property Wholesaler fails to provide a Residential Property Wholesaler Written Disclosure to the seller or buyer, and if the purchase and sale agreement is terminated as a result, the wholesaler shall be liable for damages incurred by seller and buyer.
LEGAL PROCEEDINGS AND RECOVERY OF COSTS In any mediation or arbitration proceeding or civil action between buyer and seller, between buyer and Registered Residential Property Wholesaler or between seller and Registered Residential Property Wholesaler that arises due to the Registered Residential Property Wholesaler’s failure to provide a Residential Property Wholesaler Written Disclosure before entering into a written contract for a residential property wholesale transaction as prescribed under this section, the prevailing party is entitled to recover all reasonable attorney fees, costs and expenses incurred at trial, on appeal, at mediation and at arbitration from the Residential Property Wholesaler.
How to file a complaint. If you believe a Residential Property Wholesaler has violated any governing statute or rule, you may file a complaint with the Oregon Real Estate Agency (OREA). OREA will review the complaint. In most cases, other people involved in the case, including the respondent, will be contacted. Based on the information received, OREA will determine whether to start an investigation. |
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Email Address: Dylan@coast2
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This whole bag of craziness can be avoided by just having a regulation that residential property sellers MUST be represented by an attorney.
Not really feasible on the West coast since lawyers dont handle residential closings at all basically. there would not be enough lawyers to keep up with the volume of transactions. But maybe some smart lawyers would create practices that are like foreclosure mIll law firms.
For sure this is a reaction to the public being taken advantage of by wholesalers and complaining to state agencies..
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