It seems as though there are fewer and fewer places that one can get news that is accurate. Even what were the most reputable sources seem to have fired their fact-checking departments. The worst part of this is that, since the advent of social media, everyone is quick to spread information and before long the lies or misinformation is everywhere and it’s hard to find the truth.
Earlier this week, my wife was talking to a friend of her’s that is trying to get a short-sale approved on her home here in Palmdale. The agent she is working with (not us, but a family member of her’s) told my wife’s friend that the State of California had passed a law (SB 1178) protecting the homeowner doing a short-sale from their bank obtaining a deficiency judgment for the shorted amount if they had refinanced their mortgage.
Hey! Great news for homeowners doing a short-sale in California, right? Well, maybe if the law had ACTUALLY passed and been SIGNED INTO LAW it would be. But it hasn’t. And even if it had, it doesn’t protect the homeowner from anything more than the amount that was owed on the original purchase-money mortgage and NOT on any equity that was cashed out during the refinance!
I’ll be talking about SB 1178 more in an upcoming post but my point is this … The agent told her client not to worry about the possibility of the bank coming after her for the deficiency – the new law would prevent that from happening! What happens when the short-sale goes through and the bank doesn’t specifically release the deficieny? What happens when my wife’s friend tries to buy a car next year and can’t because they find a judgment for the balance of the short-sale? I’d love to be the fly on the wall at their family’s Thanksgiving dinner.
Now this week everyone in the RE.net has been shouting from the rooftops that the deadline for closing escrow has been extended. Hundreds of posts from agents, lenders, escrow officers, title reps, home warranty reps … you name it. Even Inman News – the holy grail of real estate industry news – reported this false information as the truth (to be fair, Inman did update their article with the proper information later in the day)!
C’mon people! Doesn’t anyone check the facts before passing them along? The extension has NOT been passed! The verbiage was passed that allows the extension to be added to another bill that has yet to be voted on. Nothing more. There’s still quite a long way to go before an extension is granted.
What’s going to happen to all of the real estate agents who have passed on this “good news” to their clients that are in escrow hoping to close before the June 30th deadline? Let’s say the law that includes the extension doesn’t pass … The buyer finally closes escrow on July 1st and they send in the necessary documentation to the IRS to get their tax credit. The IRS denies the claim because the closing took place one day late. I’m thinking that’s going to be one pissed off buyer! If you were that buyer what would you do? I hope those agents who are spreading all of this “good news” have some good E&O insurance.
Use some of those research skills you learned in high school and check your facts! If you want to discuss a new law (or anything, for that matter!) go and READ IT for yourself! Don’t count on today’s so-called “news” sources to do their job correctly. Don’t let their errors make you look the fool or worse!
Like Ronald Reagan used to say … Trust, but VERIFY! Real estate agents have a bad reputation for good reason. Our job is to assist our clients during what may be the biggest transaction of their lives. If you want to be taken seriously and looked at as a trusted advisor you need to earn it. Educate yourself and don’t open your mouth until you are SURE that what you are saying is the TRUTH!
Photo Credit: reading from Crestock Creative Images
