Monday, February 6, 2012

Investors/ Exchange

Zack Kaufman
Fin 183

On Friday, February 3rd I went to the Investors exchange meeting at the Fresno Association of Realtors building. It was my second time going and I saw many familiar faces. Everyone was very kind and some even remembered me from the prior meeting I attended. The meeting started by Tom Hyatt introducing two gentlemen at the opposite end of the table who were going to give a presentation and answer questions from the following week. One of guys was an associate at the law firm Cuttone & Associates, and his partner was a law clerk and student on his way to becoming a lawyer. Both were very nice and very educational on the topics discussed during the meeting.

The first topic was a question from the previous week. It was regarding a situation in which an agent is representing a seller, and as the sale is in escrow the agent discovers the seller has filed bankruptcy. The questions were, what happens to the sellers agents commission? Is the agent legally entitled to the commission or is the commission wiped out along with the bankruptcy? The question was important and many of the attendees claimed they had had similar situations happen to them recently. The lawyer and his clerk were very knowledgeable and informative. They broke the question down to the different types of bankruptcy individuals go through. First is chapter 7, second is chapter 13, and lastly is chapter 20. Most of the time was focused on chapter 7 and 13. The lawyer stated in a nutshell that in most cases if the individual files chapter 7 bankruptcy they will not recover any commission because the individual has wiped out all their debt and commission debt falls under debt that can be wiped with under chapter 7. However, if chapter 13 is filed there is a chance that they may recover some, if not all their commission through a reorganization of their debt. The topic of got in more depth and was very informative regarding commission in general not just in residential real estate transactions.

` The second topic was about tenant rights when their house is bought, primarily focusing on houses bought at auction or through REO. The consensus was the tenants have rights and cant just be kicked out the day the transaction closes. Especially if the house was bought at the foreclosure auctions, the new owner usually has plans of flipping the house or other investment ideas for it. The owner can either respect the lease terms or give them 90 days to vacate. However, if the person living in the house is the previous owner and still has not vacated after the whole foreclosure process, that calls for different circumstances the lawyer stated. In that case, they can pretty much do two things, negotiate a time for them to get out and settle it that way, or if the holdover owners persist, they can serve them with an eviction, which causes a lot of stress and can be very bad for the previous owner. It can affect their credit rating dramatically. Either way, in any circumstances it is best handle the situation reasonably and rationally.

I would like to thank Tom Hyatt for allowing and welcoming me to attend this meeting, and everyone else in attendance.

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