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BROKER DISCLOSURE AND SELLER ACKNOWLEDGEMENT REGARDING MARKETING PROPERTY IN OR POTENTIALLY IN PRE-FORECLOSURE

____________(HEREINAFTER “SELLER”) ACKNOWLEDGES THAT THE FOLLOWING DISCLOSURES AND INFORMATION FROM THE LISTING BROKER,
____________ (HEREINAFTER “LISTING BROKER”) WHO IS/ARE CURRENTLY MARKETING SELLER’S PROPERTY COMMONLY KNOWN AS _____________________.

  1. LISTING BROKER, its Broker, agents and staff do not  guarantee a successful sale and close of escrow of the Subject Property.  LISTING BROKER, its Broker, agents, and staff will market the property, and  assist to the best of their ability to represent the Seller exclusively  to whom they have an agency relationship. 
  2. In accordance with Section 1965 of the California Civil Code, Listing Broker, its Broker, agents and staff will represent only the best interests of the Seller and any buyers who present offers will acknowledge that they are not represented by the above captioned representatives of the Seller.
  3. LISTING BROKER will perform its fiduciary responsibilities as required by law.  However, SELLER hereby understands that a successful sale and close of escrow depends on many factors including, but not limited to:  The state of the current housing market, co-operwation of buyers and sellers, co-operating of foreclosing lenders and new originating lenders and other parties who have an interest in the foreclosure property, etc.
  4. SELLER further acknowledges that SELLER has up to five business days before the foreclosure sale date to reinstate the loan being foreclosed upon.  The sale date may take place as early as 111 calendar days after the Notice of Default was recorded.  To reinstate the loan, the SELLER must, as a minimum pay all back payments, late charges, principal and interest charges, and all costs and fees as regulated by law owed to the Trustee for foreclosure costs, etc.
  5. After the reinstatement period expires, the Seller must pay the entire indebtedness (the entire loan balance), principal, interest, late charges, foreclosure costs, etc.) to avoid the foreclosure sale.  After the sale, the new owner is entitled to immediate possession.
  6. SELLER acknowledges that if a property is sold at the Trustee’s foreclosure sale, all debts represented by liens against the property may not be extinguished, leaving the SELLER liable for those debts after the foreclosure sale.  They include, but are not limited to, Federal tax liens, State County and City taxes and assessments, various debts such as represented by mechanics liens, judgments, and possible deficiency judgments from certain lenders.
  7. SELLER hereby acknowledges that a forced or involuntary sale, such as a foreclosure sale of mortgaged property, is treated as a sale of property by the IRS.  If SELLER’s  mortgaged property is foreclosed or repossessed and the lender re-acquires it, SELLER should expect to receive from the Lender, an IRS form 1099A.  This form indicates foreclosure proceeds, the amount of debt and whether SELLER was personally liable.  Be advised that the IRS may compare its copy of form 1099A with the SELLER’s  tax return to determine if income was reported for the foreclosure.  (Note:  generally, the amount of debt which is discharged on a foreclosure or repossession is considered an amount realized by the Seller on the sale.   The discharged debt exceeding the property’s fair market value is taxed as ordinary income.  SELLER is hereby urged to consult with a  tax expert, such as his CPA or tax attorney to determine if said taxes are negated because the Seller is financially insolvent, in accordance with IRS publication 960. 
  8. Broker is herewith granted by the Seller to include in any MLS service that the terms of sale are subject to the lender granting consent to said terms.
  9. Seller, herewith and in all documents discloses that a Notice of Default under the ________trust deed(s) was (were) recorded on _______________________.
  10. Seller and Broker discussed the options available to Seller, including the negotiating of a modification of the mortgage terms with the Lender in which retention of the property is an option.  it was decided it be best to market the property on a short sale basis.
  11. A short sale is always subject to lender approval which no Buyer, Seller or Lender have control of. Thus, Seller agrees to hold Broker and Buyer harmless for the acts and omissions of the lender”.
  12. It is further agreed by seller that Broker is to inform all prospective buyers and brokers of the need to obtain agreement(s) from lender(s)/lien holder(s) to accept less than a full loan payoff to enable a sale to close at the selling price.
  13. SELLER IS HEREBY ADVISED THAT LEGAL MEANS MAY BE AVAILABLE TO THE SELLER TO DELAY A SCHEDULED FORECLOSURE SALE DATE.  HOWEVER, SELLER MUST CONSULT WITH LEGAL COUNSEL CONCERNING ACTIONS THAT ARE AVAILABLE TO THE SELLER FOR DELAYING A FORECLOSURE SALE.  REAL ESTATE BROKERS AND THEIR ASSOCIATE LICENSEES ARE NOT LICENSED, NOR DO THEY HAVE THE QUALIFICATIONS TO PROVIDE LEGAL OR TAX ADVICE WITH RESPECT TO ANY AND ALL LEGAL AND TAX ASPECTS OF THIS TRANSACTION, ALTHOUGH REAL ESTATE ADVICE IS SOMETIMES OVERLAPPING.

SELLER:______________________________________

DATE:____________

 

© Copyright, 2007, Saul Larner,Ph.D., LL.M., Los Angeles, CA 91356, All rights reserved.

  
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