So, You've Got a Listing
Updated: 21 hours ago
There is a common misconception that your TC takes over once you've opened escrow. However, including your TC in your file as soon as that Listing Contract is signed, could help save HOURS of your time.
You're already working to prepare and promote your new listing, so the last thing you're worried about is paperwork on a file that's not even in escrow yet.
Below are the things you (or your TC) should handle on your listing:
IS ALL THE PAPERWORK THERE?
I always recommend that my agents have at LEAST these items:
Residential Listing Agreement & Seller Advisory (RLA + SA)
Disclosure of Agency Relationships (AD-1)
Possible Representation of More Than One Buyer or Seller (PRBS)
SELM (Seller to Exclude Listing from the MLS). If the home isn't ready to go on the MLS in the next 48 hours.
Trust Advisory & RCSD-S. When the property is held in a Trust. It might not show up on tax rolls, so make sure you bring one to the listing appointment with you, just in case.
** Items 1-3 come bundled together in Zipforms **
Sometimes in the excitement and hustle and bustle, a document can be forgotten or an initial missed. Maybe you picked the wrong form in Zipforms. Maybe you left the paperwork with the Seller to review and they returned it missing a page. Maybe (and this happens A LOT) you forgot to sign your own listing agreement. Maybe the Seller called you after you left and said to hold off on putting the property on the MLS.
All of these situations have a quick and easy fix, but why spend your time doing them? Let your TC handle the paperwork right from the start so you can leverage your time.
Don't wait for escrow to open before you order a prelim on a property. A preliminary title report can let you know all kinds of things that could delay or even cancel an escrow.
Did the Seller give you accurate information about their mortgage? Maybe they forgot to mention a line of credit. Maybe the loan amounts are more than the Seller told you and you could have a short sale on your hands.
You can find out about any surprise liens or issues that might need to be removed or addressed. Past due child support or judgements are quite common
Sometimes the Seller that signed the Listing Contract isn't even the correct signer! Maybe there is a spouse on title. Maybe they THOUGHT a spouse was on title but actually wasn't. Maybe the property is in a Trust.
Let your TC order a prelim on your listing to make sure you aren't faced with any of these surprises. You will need a copy of the prelim for your Broker file anyway and it saves you the time of having to email a copy to escrow and your TC once escrow opens.
ORDER AN NHD REPORT
Much like with a Preliminary Title Report, you can avoid a lot of headaches and surprises by ordering your NHD (Natural Hazard Disclosure) Report before you open escrow.
It is a state law and requirement that the Seller disclose this information to a Buyer and the reports get paid for when escrow closes, so waiting for escrow to open before you order this report, really doesn't do any good.
The most common surprise we find in Southern California NHD Reports have to do with Flood Zones. Recent laws and regulation changes have resulted in RIDICULOUS insurance premiums for homes that are in a flood zone. This can be a deal breaker for many buyers because they either don't want to pay the high insurance fees, or the time it takes to get a survey and/or exemption, takes longer than the escrow period.
There ARE ways out of and around the Flood Zone issue but they take time and money and it's best to know abut these things up front.
Let your TC order an NHD Report for your listing so you can get ahead of any possible delays. Another bonus is that the NHD Signature Page that is required for all parties to sign, can then be included in the Seller Property Disclosures. Which leads me to my next point...
PREPARE SELLER DISCLOSURES NOW
Unless you are planning a long prep time for your listing or you have to go through months of short sale negotiations, it's best to prepare your Seller's disclosures and get them completed right away.
First of all, it's a lot of paperwork. It can be overwhelming and sometimes Sellers just want to look it over and take their time to complete them. The contract requires the Seller to deliver the disclosures to the Buyer within 7 days of opening escrow. Give your Seller the disclosures once you've taken the listing so you don't have to pressure them to get completed as soon as escrow opens.
Also, the packet of disclosures is not the only set of paperwork the Sellers will get. Escrow has a large chunk of papers to complete as well. Do your Sellers and their signing hands a favor and spread out the batches of paperwork.
Your TC will typically prepare the disclosures in one of two ways:
1. IN PERSON - Package up the disclosures for you to take and complete with your clients. Highlight where the Sellers need to sign and where the Listing Agent needs to sign (because you forget). Include an AVID for the Listing Agent to complete when they are at the property.
2. GO DIGITAL - Color scan a copy of the disclosures that need to be completed by hand (TDS, SPQ, Earthquake Hazard Report, etc) and highlight where the Seller needs to sign. Email those documents for the Seller to print, sign and return via email or fax. Then prepare the rest of the disclosures that only require a signature or an initial, and send them via DocuSign.
**SIDE NOTE: Once you have the disclosures signed, give them BACK to your TC. Don't just forward them blindly to the other agent. Let your TC review the paperwork first!
READY, SET, ESCROW!
Now that your documents are fully executed and your reports ordered, as soon as escrow opens your TC can provide everyone with Seller disclosures, a prelim and an NHD report within the first 24 hours!
If you REALLY want to front load your listing here are two more steps you can take to get the ball rolling.
1. Order a termite report - Now, there are pros and cons to doing this. PRO: You know what you're getting into. Termite reports are a common request here in SoCal and most contracts call for Seller's Choice of company anyway. Termite companies typically offer a "free" inspection and the work is paid for through escrow, so you're Seller isn't out any money. CON: You have to disclose all reports to the Buyer, even if they didn't request a termite inspection.
For the most part, investors or all cash Buyers that don't want a termite report, usually don't care about the termite work. Buyer that request a report (and their Lenders) will more than likely want the work to be done anyway.
2. Order HOA docs - Despite the new contract change last November, agents are STILL surprised to learn that Sellers are now REQUIRED (no option given) to pay for HOA documents upfront. This means they need to bring in a check to escrow the same way the Buyer delivers their initial deposit.
It used to be that they Buyer & Seller would sign off on a clause in their escrow instructions that would allow the Buyer's deposit to be used to order the HOA documents and in case of cancellation, the Buyer would return the HOA documents and get their money back. NO MORE.
If you have a listing in an HOA, get the process started NOW. HOAs are notorious for taking their sweet time and charging absurd fees for this paperwork. You might not need to actually place the order for the documents before escrow opens, but at least submitting a request will get you the exact cost the HOA will need from the Seller once escrow opens.