WatchI had the idea of creating a list of the vanilla disclosures and contracts that make up a standard real estate transaction in California and making them available on Patrick.net for people to fill out. Then they could take their nearly-complete transaction to a real estate lawyer for a relatively cheap once-over look, and skip paying any agent anything.
Lo and behold, even helping people fill out standardized forms is illegal without a license. Holy shit! What's next, a license to breathe?
From the Wikipedia:
On September 30, 1998 Governor Pete Wilson signed California State Senate Bill SB1418, regulating the legal document preparation profession in the State of California, and creating a new formal title, Legal Document Assistant (LDA).
...
A Legal Document Assistant, as defined by the California Business & Professions Code (Section 6400 (c)) is: "Any person who is otherwise not exempted and who provides, or assists in providing, or offers to provide, or offers to assist in providing, for compensation, any self-help service to a member of the public who is representing himself or herself in a legal matter, or who holds himself or herself out as someone who offers that service ..."
This is obviously yet another scam to extract more money from the public, via extra fees to so-called "LDAs" and from the LDAs themselves for the licensing and training necessary to run a god damn typewriter.
Even more insulting is the condescending "This Bill was passed for your protection" on the site that demands LDAs pay $200 per year to join their conspiracy against the public: http://www.calda.org/
I think I can still publish the vanilla real estate documents on my site under the first amendment, as long as I don't charge anything for that, unless we now need to apply for a license to use the first amendment too.
OK, let's start. What are the documents needed to complete a vanilla real estate transaction in California?
Written statement that no agent is to be paid any commission. (Most important item!)
Offer.
Counter-offer, if any.
Purchase agreement.
Escrow agreement, including list of items to be pro-rated.
Written list of personal property incorporated into the sale.
Seller's deed.
Seller's title insurance policy.
Seller's current mortgage papers.
Seller's house insurance policy.
Seller's property tax statement.
Articles of incorporation, by-laws, and CCR's (covenants, conditions and restrictions) for neighborhood, if any.
Local water company stock, if any (some houses belong to private water companies).
Buyer's title insurance policy.
Termite company name and copies of reports.
I think there are about a dozen disclosures that need to be provided as well. Lead paint, flood zone, other unusual hazards.
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freak80 says
Steve Jobs? Sam Walton?
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Patrick says
Patrick, on the short term, the only thing you can do is leave California for... Singapore, Hong Kong, Indonesia... California and most of the US is beyond fixable.
Everything will be fixed naturally - it will collapse and start from scratch.
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All you need is a purchase agreement with disclosures, and an escrow. Escrow orders the necessary title insurance etc.
I have purchased several pieces of land directly from sellers. A simple 2 page agreement, we open escrow, and wait for escrow to tell you they are ready and you can wire in the funds.
With a house, or if a loan is involved it obviously gets more complicated.
The purchase agreement I used was available in Staples for $10.00.
The MLS monopoly that realtors have simply cannot last in the internet world. The commissions are a criminal waste, and anyone who hammers in the final nail to this extortion will go down in history as a hero.
I wish you all the best.
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lol You want to CHARGE money for a legal service without license? And complain about it when you don't qualify for such license?
A license protects the public from people that charge money for something they know nothing about, which can create huge damage if he/she ever fuxked up.
Doctors, lawyers, auto repair, etc.
A license also phase out those with a criminal record. Who is there to say you wouldn't steal someone's social security number for giving "free service"?
Get an education and stop complaining.
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Notice the "for compensation" part of the code.
If you really want to help people, do it for FREE and you won't need a license.
Gotta pay to play, get educated, pass for a license, EARN your living like everyone else. No free meal buddy.
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WhatThe says
OK, it's free.
WhatThe says
You mean things like typing?
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Once again patrick you are behind the 8-ball for being too 'ethical' to get licensed and spend time as an agent in the 'belly of the beast'.
It cost me $300 to get a broker lic in CA - which I used to buy sell a few and let it expire.
What you dont know is that the CAR has a couple HUNDRED forms they let thier agents use for a small annual fee. AND what you dont know is that a licensed agent will normal immediately trash any offer not on a CAR form. They have legal liability with 'non car forms'. So even if you get this up and running agents will say 'offer must be sumbitted on CAR form' which of course you can get for cheap/free (talk to a REALTOR).
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PockyClipsNow says
I do now.
PockyClipsNow says
What agents? I'm talking about completely eliminating them from both sides.
Anyway, I'm sure the CAR forms are all copyrighted to prevent people from using them to make or accept offers without the blood-sucking leeches attached.
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Its more likely that one day FSBO will be outlawed in CA rather than the other way. Thats the way things are headed.
Its a dying dream patrick. But good luck to you!
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Patrick, are you sure these forms that you are attempting to create don't already exist? I did a quick google search and found:
http://www.choicea.com/legalforms
Nolo seems to have forms too (probably have to buy their book).
I would guess any FSBO website would have the forms too.
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Patrick says
We have that now. It's called ObamneyCare. If you want to breathe, you need to pay an approved insurance company and comply with their contract until you turn 65 and can sign up for Medicare. If you don't like that, you can vote for RyanCare, which extends ObamneyCare to senior citizens. Either way, attempting to breathe without insurance will subject you to a penalty.
But, I really do wish you success. Believe it or not, California is actually easier than other states in terms of DIY closings. For example, in New York, a real estate transaction typically involves two lawyers, two realtors, at least one paralegal (who does most of the work), a title insurance agent, and often bank representatives too. The resulting transaction costs there including commissions and fees commonly exceed 10% of the purchase price.
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tiny tina says
Those look good, but they are copyrighted and may NOT be freely redistributed.
What we need is some GPL'd documents, where the copyright gives everyone the right to freely use them, and if someone else derives some documents from them, that also has to be freely available.
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Patrick said..."You mean things like typing?"
More like protecting the public from thinking that "vanilla documents" will work for everyone and every situation. For example, say some widow wants to sell her home, but lo and behold she doesnt own in fee simple, but instead has a life estate.
In this case, a competent realtard should know there is no standard form for this, and get an attorney involved before someone (probably the buyer) is fucked for life as he shells out all his hard earned cash and gets nothing in return...
Now obviously, this doesnt happen much, hence 95% of the time filling out the standard form docs works perfectly - no harm no foul. Still, for the other 5% where there is some sort of hitch in the transaction that no "vanilla form" will fix, someone, either the buyer or the seller will be fucked, absolutely fucked, and looking at a year in litigation and 25-100K in legal fees to "undo" what the standard forms did to them.
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Did I ever say the vanilla form should be the end of it? No I did not.
I'm just saying those form should be available, and anyone should be able to do the typing (duh), and then a lawyer should check them over. There is no extra risk to buyers or sellers in that compared to what we have now, and probably less risk because lawyers are better trained than realtors.
But the real estate lobby hates it when people fill out their own forms, because it makes it clear just how harmful and unnecessary realtors really are.
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I love them already!
OK, I wrote to them and asked if they can help do anything about this brain-dead California licensing law.
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legal fees are sure 'outta control' in this country.
its actually more of an outrage than RE commissions IMO.
We need to start suing people about this!!! ha!
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Patrick its a great idea, can be like tax return software replacing the need for accountants. Buyers and sellers purchase the $50 R.E software with all the forms (must buy yearly for most recent updates!), some help info makes sure we fill out correctly. When paperwork is done the software directs us to pick a lawyer and title company from our state in the software list (also updated yearly and lawyers and title co. pay yearly to be on the list, sends to them by email with their fee and "voila"...
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Ruki says
Yes, me.
AJ212 says
It is a lovely idea, but realtor infestation of the DRE (Department of Real Estate) and the realtor corruption of our laws makes it very hard so far.
So for example, it's illegal to even type anyone's name on any legal document in California unless you are specifically licensed to do that.
It's also illegal to refer anyone to any specific lawyer unless you are licensed to do that.
The California DRE also sued FSBO.com for merely listing houses for sale on a website without a license to do that. Fortunately, that one was struck down on first amendment grounds, but it shows how far they will go if they can. See:
http://patrick.net/forum/?p=1215664
Out sytem is broken because the people who are taking our money via their corruption of our laws use some of it to buy more laws that trap us even more strongly, ensuring they make even more money, and around again it goes.
The solution is publicly flnanced campaigns, a complete ban on private campaign donations, and the death penalty for signing any law written by a lobbyist.
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That shouldn't be a problem, if you provide forms... that's ok... that's just like that legalzoom.com company. The lawyer is the one providing all the advice.
And I'm sure with some legal disclaimer (like all others) telling them that this is not legal advice, and they should contact someone licensed if they want to... should satisfy the legal requirement.
They can't penalize you for having free forms available online. You should be ok.
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I don't know the disclosure laws in CA. But in OR. I think agents are required to disclose any info they know even though a REO is not required to disclose anything.I certainly hope that buyers that find any info on a property don't contact the listing office because they could be required to disclose to any buyers. Surely that wouldn't interfere with a sale & force the price to drop. How many buyers haven't done Massive Due Diligence & found problems after closing only to hear, I didn't know about that problem.
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I have admiration for Patrick enlightening the Masses of their options. In the present we are faced wit a Gubmint that dun't enforce existing regulations imposed on licensed agent's.
The opposition is; Buyers would need to educate themselves in finding THE BROKER with high integrity.
Buyers won't always find THE HONEST BROKER, even if unending regulation on brokers are included. So are we left with Stalemate ? or Caveat Emptor ?
BUYERS MAKE VALUE. Especially uneducated ones.
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I don't know why you're complaining now Patrick, you are always coming up with other harebrained regulation schemes related to real-estate. You're just mad that this scheme is counter to what you want.
If you believe fundamentally that the government has the right to regulate everything, then you have to live with the consequences of not getting your way even when it's idiotic. Government power is a rotting cancer of self interests pushed at the point of a gun.
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(I hope you don't interpret that as an insult, its just an observation)
btw the people who push this crap on us ALWAYS use the "it's to keep you safe" argument. If you believe that you should have the freedom to be "unsafe" then that should apply to many personal-behavior regulations that are crap.
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AlexS says
Ripped off Woz, lied to him about how much money they made. Also, lucky that Xerox didn't sue him over his clear theft of IP and strangle Apple in the cradle.
Don't know enough about Walton.
Ruki says
Awesome.
"Children, I'm dying... from an ugly flower arrangement. Please... don't let this happen to another American family, lobby the government to require the licensing of... florists... and hundreds... of hours of class and thousands... in fees..."
Yeah, the war on street vendors. And also, Parking lot kiosks. I see alot of them in Oregon, but never in the northeast. Probably because R/E and Developers wrote all kinds of laws making it next to impossible to set up a coffee stand, even if you pay the landowner on commercially-zoned land in the parking lot of a shopping center.
Forcing people to rent expensive stores, with 1 year leases requiring far more money to rent than a coffee trailer or grease truck costs to buy.
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Hey, here's a source of real estate contract that is free for use with no copyrights attached:
http://contractwell.com/real-estate.html
I'll add it as a permanent link on my home page.
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San Jose, CA
Example of different contractor licensing requirements in CA
Licensing Classifications
Business & Professions Code
Division 3, Chapter 9. Contractors, Article 4. Classifications
7055. For the purpose of classification, the contracting business includes any or all of the following branches:
Print a complete list of the "Description of Classifications" or click the specific classification below for the individual description.
(A) General Engineering Contractor
(B) General Building Contractor
(C) Specialty Contractor
C-2 - Insulation and Acoustical Contractor
C-4 - Boiler, Hot Water Heating and Steam Fitting Contractor
C-5 - Framing and Rough Carpentry Contractor
C-6 - Cabinet, Millwork and Finish Carpentry Contractor
C-7 - Low Voltage Systems Contractor
C-8 - Concrete Contractor
C-9 - Drywall Contractor
C10 - Electrical Contractor
C11 - Elevator Contractor
C12 - Earthwork and Paving Contractors
C13 - Fencing Contractor
C14 - Metal Roofing Contractor [repealed]
C15 - Flooring and Floor Covering Contractors
C16 - Fire Protection Contractor
C17 - Glazing Contractor
C20 - Warm-Air Heating, Ventilating and Air-Conditioning Contractor
C21 - Building Moving/Demolition Contractor
C23 - Ornamental Metal Contractor
C26 - Lathing Contractor [repealed]
C27 - Landscaping Contractor
C28 - Lock and Security Equipment Contractor
C29 - Masonry Contractor
C31 - Construction Zone Traffic Control Contractor
C32 - Parking and Highway Improvement Contractor
C33 - Painting and Decorating Contractor
C34 - Pipeline Contractor
C35 - Lathing and Plastering Contractor
C36 - Plumbing Contractor
C38 - Refrigeration Contractor
C39 - Roofing Contractor
C42 - Sanitation System Contractor
C43 - Sheet Metal Contractor
C45 - Sign Contractor
C46 - Solar Contractor
C47 - General Manufactured Housing Contractor
C50 - Reinforcing Steel Contractor
C51 - Structural Steel Contractor
C53 - Swimming Pool Contractor
C54 - Ceramic and Mosaic Tile Contractor
C55 - Water Conditioning Contractor
C57 - Water Well Drilling Contractor
C60 - Welding Contractor
C61 - Limited Specialty
ASB - Asbestos Certification
HAZ - Hazardous Substance Removal Certification
HIC - Home Improvement Certification [repealed]
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Patrick says
OK - a little better than before, but still problematic in that the parties have bound themselves to a transaction that they may not be able to complete.
The lawyer would then need to extract them from what they had just commited themselves to, which is fine so long as both parties agree to do that. If one of them (typically the one who now realizes they have an advantage) does not agree, and demands specific performance, look for one of them to be coughing up $$$ to get the other to settle. Expect alot of deposits to be forfeited under this rubric.
Again, dont get me wrong - 95% of the time nothing bad happens and the standard form works just fine. Its the other 5% that the government wants to "protect" causing a burden on the other 95% who dont need protection.
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CDon says
No, I said a lawyer should check them over. I mean check them over before they sign the documents.
There's no need for extraction then.
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TheNastyButler says
When did I say that the government has the right to regulate everything? Please quote me if you can find it. When you can't find it, please apologize.
I said that published asking prices for houses should be legally binding offers to sell at that price, the same way they are with toasters, and cars.
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Here are my political views:
http://www.patrick.net/forum/?p=1206585
Where's the inconsistency?
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Greg Glaser's website
Hi forum,
I'm a FSBO attorney.
Here is a list of the disclosures that a California home seller generally uses for his/her home sale (you can save some trees and process these electronically with buyers):
* 2-page Real Estate Transfer Disclosure Statement (TDS)
* 1-page Seller's Statutory Discosure (SSD)
* 2-page Buyer's Inspection Advisory
* 2-page Lead based paint disclosure
* 17-page EPA lead disclosure pamphlet
* 40-page (varies) Natural Hazard Disclosure Report (order it online from 1st American)
* 1 or 2 page Water Heater & Smoke Detector Statement of Compliance
* 1-page carbon monoxide detector notice
* 53-page guide to earthquake safety
* 45-page environmental hazards pamphlet
* 16-page energy conservation booklet
The buyer does not need to sign every page, only the pages where a signature (or initial) is requested.
There are a few other disclosures that are in play, and often they are stated in the purchase contract (i.e., 3-day right of termination; Megan's law disclosure).
Then of course there are the home inspections themselves. Typically the buyer hires a local contractor to do a full home inspection. And either the seller or buyer will hire another contractor to do a termite report (wood destroying pests and organisims report).
As a seller, consider making a checklist of every disclosure document you give to the buyer. You can invite them to sign your checklist to ensure everyone is on the same page.
--
Hope this post has been helpful. Hey, Patrick kudos for your post on opening a discussion on this website about improvements you would like to see in the world: http://patrick.net/forum/?p=1206585 . I hope you'll come on over to www.civilactionnetwork.org sometime and post a referendum!
To weigh in on some of the topics on this licensing issue, yeah, I'm generally not a fan of monopolies or copyrights. But all the same, when people are benevolent and loving and forgiving with one another, these sorts of things become largely irrelevant in the bigger picture of human interaction where we recognize each other's strengths/weaknesses and help one anoher. Here is an article I wrote addressing this issue in regards to the Federal Reserve Bank that will help explain better what I'm trying to say: http://www.naturalnews.com/034305_Federal_Reserve_fractional_banking_OWS.html
--
Greg Glaser
www.GregGlaser.com
norcalfsbo.wordpress.com/
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Here's a book full of all the necessary forms for $40 if you print it yourself, or $50 for a hard copy:
http://www.uslegalforms.com/ca/CA-HOME.htm
So now, what else is left to do to liberate sellers and buyers from realtors? It's clearly possible to fill out all the forms from that book and then go to a lawyer like Greg and get a flat fee transaction looked over and completed for as little as $1,000.
I guess the main problem remaining is that once sellers sign a contract with a realtor, they are then trapped into paying a commission, and the buyer is also screwed, because of tricks like not accepting his offer unless it is on the copyrighted CAR forms, which require a realtor to obtain, etc.
So the most important thing is for sellers to refuse to sign any contract with any realtor, and preferably with no agent (not all agents are realtors, but most are).
How can I help get sellers and buyers together so they can agree on a price without any agent being involved? FSBO sellers might be skittish of listing their house on Patrick.net, but I really have nothing against sellers themselves. What services can I provide to them?
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Los Angeles, CA
Honestly a better option than FSBO when selling is get licensed, join the local MLS and list your own home. This would be about $1500 total and you would get top $ for your home (save the whole 2.5% of the sell side commision if you have broker license).
This would require cooperating with the monopolists, but is the best option to maximize cash - homes sell for more money when in the MLS due to the endless army of buyers using agents - you have to sell to that clueless army.
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Patrick,
You need to just "assist to offer to provide assistance in providing assistance". That is not covered by the bill! I'd pay for that service. ;)
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How about I propogate the user's FSBO listing to as many sites as possible except for the MLS's and make sure their ad remains visible, for, say $7/week? (I love the number 7.)
I could put their listing on:
Patrick.net
Craigslist
Oodle
Zillow
and probably many others, since listings are valuable content, even FSBO listings. Since it's just advertising, I shouldn't need any sort of license at all.
For the forms and the transaction, I'd refer them to that book, and then to lawyers like Greg Glaser who would look over and validate the transaction for a flat fee. I would get nothing from the book referral or for advertising Greg for him, but that's OK.
Think sellers would pay $7/week for the easy advertising option?
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Patrick says
I see. OK, just understand that is a little different than what you were saying to start this thread which was:
"Then they could take their nearly-complete transaction to a real estate lawyer for a relatively cheap once-over look."
I cant imagine someone paying for an abstract, title commitment, etc. (i.e. a nearly complete transaction) based upon a bunch of unsigned documents.
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By the way, if you really want to save people in attorneys fees, dont have them show up with a bunch of unsigned documents and ask "is this OK"
Reason being, any attorney worth his salt will not take the word of some guys off the street that this is a "standard form" document. Instead, the attorney will likely pour over every word, spending alot of time making sure that no-one modified even the slightest thing before he anoints the buyer & sellers transaction as "OK".
Better still is a buyer and seller who have decided on price, deposit, allocation of closing fees, etc, but show up with no forms at all. Then, the attorney will provide HIS forms which he knows are 100% on the up and up and thus he does not need to spend a bunch of time poring over every word to make sure nothing has been changed.
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Patrick, I don't claim that you ever directly said "I believe the government has the power to regulate everything." When I say you "believe" that, it's an extrapolation based reading a significant (including "Patrick's Politics") amount of your writing. It's implicit in your positions.
I can only conclude from what I've read that if YOU think something is right, then it should be that the government enforces it. By that logic (unless you believe that only your opinions are valid), any opinion by any person can be elevated into "the government should do this" status. If there are no objective ways to measure the quality/ethicalness of an opinion or the overreach of government power, then all opinions and uses of government power are open to popular opinion.
I did see that you believe in free speech which is nice, but hardly comforting given that in order to enact your other positions, imprisonment must be the order of the day for those that disagree.
If you can force me to do something (regulation/law) because you "feel" a certain way about something, then I can do the same to you. If I can gather enough votes, I can tax each outgoing byte from patrick.net and there is nothing you can do about it. If I can get enough votes, I can regulate that all toilets need to half as large and there is nothing you can do about it. If you walk by me and 3 other people in the forest, we can take a vote to tax you for travelling and relieve you of 0-40% (not 0-100% because we're not communists after all!) of your goods and there is nothing you can do about it.
Again, not meaning to offend... We Americans have forgotten what freedom means (and no I don't believe freedom means anyone can do anything they want). Freedom != Anarchy.
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Patrick says
That's the American way. Justice is bought and sold on the open market to the highest bidder like any other commodity. Might makes right. It's been that way since 1776.
Patrick says
Why do you hate freedom? ;-)
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Greg Glaser's website
CDon says
For a FSBO it will often be the same cost whether the attorney has to review the client's work or not. But this will vary from attorney to attorney. Sometimes it is the lender's underwriting department that is the strictest with regard to the content desired on forms. It is nice to have forms though for efficiency resasons because it helps put everyone on the same page. Right or wrong on what the law actually requires from the parties, forms do provide consistency.
And yeah, one of the best ways to save on attorneys fees is to find a skilled and personable attorney who offers flat fees, or a fee cap.
I see a politics debate is picking up here too - at the end of any given day if you get enough Americans together in a room they will find a way to disagree about politics and conspiracies, but at our best I see we also treat one another civilly (classic love thy neighbor) and respect each other's rights. I also like the idea that we can use the power of liberty to expose massive conspiracies and where applicable the absence thereof; and that we can use the power of responsive government to do justice or where applicable the bureacuracy thereof!