oregon realtor magazine

A PublicAtion of

WintER 2010

Public Policy

Education

New Leadership

2011 focus on:

The home of home InspecTIon ®

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4

Volume 45 number 4

ASSOCIATION OFFICERS

PRESIDENT Joann HansenPRESIDENT-ELECT John Hoops, CRSIMMEDIATE PAST PRESIDENT Alan Mehrwein, GRI, CRBEDITOR/CHIEF EXECUTIVE OFFICER Jonathan M. Wallace, CAEMANAGING EDITOR Joyce H. Beach, CMP, e-PRO

KEY COMMITTEE CHAIRS

Business Issues Sue O’Halloran, CRSGovernment Affairs Sue Curths, CRB, CRSPolitical Affairs George HaightProfessional Development Lori Stenshoel, GRI, ABR, CRS

Any information provided is intended for the general guidance and

information of OAR members. OAR should not be considered the

single authoritative source of information. The user is responsible for

verifying all important information for accuracy and completeness

before taking any action on the basis of the information.

The OREGON REALTOR® (ISSN 1059-2628, USPS 600-080) is pub-

lished quarterly by the Oregon Association of Realtors®, PO BOX

351, Salem, OR 97308-0351. Subscriptions cost $4 annually as part

of membership dues; $15 annually for nonmembers. Second class

postage paid at Salem, OR. Postmaster: Send address changes to

the OREGON REALTOR®, PO BOX 351, Salem, OR 97308-0351.

Advertising carried in the OREGON REALTOR® does not constitute an

endorsement of the products by the Oregon Association of Realtors®.

Exceptions to this rule are seminars sponsored by the Oregon

Association of Realtors®.

Printed on recycled paper.

StAtEMEnt of oWnERSHiP AnD MAnAGEMEnt. the oREGon REAltoR® (iSSn 1059-2628, uSPS 600-080) is published four times a year in Spring, Summer, Autumn and Winter by the oregon Association of REAltoRS®, P. o. box 351, Salem, oR 97308-0351. the editor is Andrea l. bushnell, P.o. box 351, Salem, oR 97308-0351. the owner is the oregon Association of REAltoRS®, P. o. box 351, Salem, oR 97308-0351. there are no bondholders, mortgages or other security holders.

EXtEnt AnD nAtuRE of ciRculAtion: Average number of copies of each issue published during the preceding twelve months: (A) total number of copies printed, 18,500; (b.1) Mailed outside-county paid subscriptions, 18,306; (c) total paid distribution, 18,306; (D) sample, free or nominal distribution, 0; (f) total distribution, 18,306; (G) copies not distributed, 194; (H) total, 18,500; (i) percent paid, 100%. Actual number of copies of single issue published nearest to filing date: (A) total number of copies printed, 20,000; (b.1) mailed outside-county paid subscriptions, 18,015; (b.2) paid mailed subscriptions, 963; (c) total paid distribution, 19,978; (f) total distribution, 19,978; (G) copies not distributed, 22; (H) total, 20,000, (i) percent paid, 100%.

O R E G O NREALTOR®

Joyce beachManaging Editor

Editor’s Podiumthis is the time of year when it’s very easy to become reflective about what’s occurred over the past 12 months. this year, however, i think looking ahead is preferable to looking back so i’d like to take a brief look at what’s new for the oregon REAltoRS® and our members statewide.

To begin, there are some new changes to the Association staff. Kelli Thompson has accepted the position as the Association’s Communications Director. Kelli came to the Association in

November 2007 as the REALTORS® Political Action Committee Manager. Prior to her position here she was the Communications and Government Affairs Director for the Greater El Paso Association of REALTORS® in El Paso, TX. Kelli has expanded her role for the Oregon REALTORS® over the last six months and we’re pleased to welcome her to this new position.

Also new to the Association staff is Legal Counsel Sean Kidd who comes from the Newport, OR law firm of Macpherson, Gintner and Diaz. You can read more about Sean in the article on page 16.

New leadership also has recently taken the helm of the Oregon Association of REALTORS®. Joann Hansen assumed the Association presidency last month and we’re pleased to introduce her to all of you in the interview on pages 8-9.

Coming January 1, 2011, all of the new licensee continuing education requirements become effective. The Oregon REALTORS® is working to deliver the new Law and Rule Required Course around the state and we’ve just gone live with an online course offering. Visit www.oregonrealtors.org for more information.

When the Oregon Legislature convenes in Salem on February 1 it will be the beginning of a new era! Oregon voters approved a measure in November’s General Election to move to annual sessions with sessions now convening in February rather than January.

There are times when “out with the old and in with the new” resonates with people. Many of us are ready for new beginnings and we won’t hesitate when it comes time to turn the calendar page to the New Year. All of us at the Oregon Association of REALTORS® wish you best for the New Year and hope it will bring new prosperity to you and yours. Happy holidays! ■

Kelli thompson

Winter 2010 | oREGon REAltoR® | 3

O R E G O NREALTOR

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Northwest Community ManagementA DIVISION OF THE MANAGEMENT TRUST

Editor’s Podium 3

President’s forum 5Reflections on a Successful Year

Public Policy 62011 Session: One for the Ages

nAR and RPAc leadership thank You 7REAltoRS® of the Year 8new legal counsel Joins oregon Staff 11

A Reason to look forward to the Season 10

Joann Hansen Assumes 2011 Presidency 12

Hotline Highlights 14Can the Seller Place Offers in a Backup

Position in a Short Sale?

REAltoRS® Risk Management 15Thorough Documentation is a Must

oregon YPn chapter now up and Running 16

Events calendar 18

4 | oREGon REAltoR® | Winter 2010

P R E S I D E N T ’ S F O R U M

Reflections on a Successful Yearby Alan b. Mehrwein, cRb, GRi, 2010 Oregon Association of REALTORS® President

Alan Mehrwein

in the midst of uncertain and trying times, our oregon Association of REAltoRS® has emerged stronger than ever. this past year we stopped numerous political attacks targeting the real estate industry, strengthened our education system and enhanced and expanded communications at all levels within the Association. We also launched an unprecedented political effort, that i am confident will result in a historic achievement for our industry as well as oregon’s real estate consumers in the coming years.

During the 2010 special legislative session, a difficult economic climate created a challenging political environment. With tensions high and time short, legislative proposals surfaced that endangered real estate license law, land use planning, mortgage lending practices, economic development, domestic water and private property rights and housing affordability and attainability. All of these threats were defeated and the Oregon REALTORS® successfully added important safeguards for consumers and the real estate market through the regulation of appraisal management companies.

With a significant increase in foreclosures and distressed properties

affecting the real estate market, we educated members and designed new resources to assist REALTORS® and homebuyers throughout Oregon dealing with distressed properties, short sales and foreclosures. Additionally, a new rule and law update class is now available to educate members on recently enacted legislation and administrative rules. To make sure these resources are at your fingertips, a new “Members Only” page was created on the website (www.oregonrealtors.org) featuring the latest news, documents, used resources and information for Oregon REALTORS®.

To increase involvement and communication within the Association, we have expanded our network through social media outlets -- Twitter and Facebook. The creation of a Young Professionals Network was launched for young, career-minded real estate professionals presenting an opportunity to stay engaged on the latest tools, resources and networking opportunities while connecting with their peers throughout Oregon.

The Association continues with outreach programs to consumers through the OAR HOME Foundation and the HOME Sweet Home program. This year the HOME Foundation will give $70,000 in grants to non-profit organizations in Oregon that work to facilitate and increase home ownership in Oregon. Through the HOME Sweet Home program, funded through an $80,000 NAR workforce housing grant, 24 Oregon REALTORS®

from across the state have helped their clients secure a $2,000 down-payment assistance grant.

Finally, I’m excited to share that as we go to press, we have collected more than 30,000 volunteer signatures to amend the constitution and permanently stop new real estate transfer taxes in Oregon. This was not a small feat and I am very confident that the voters will have an opportunity to vote on this issue in the general election in November 2012 and will stop the threat of new taxes on real estate. In achieving this first milestone, we have received signatures and support from all 31 local associations. This exemplifies what is possible when REALTORS® throughout Oregon work together to make a difference and protect the real estate market and industry.

As we look forward to 2011 -- I challenge you to get involved in the process of protecting property owners and stopping new real estate transfer taxes.

Get involved today and learn how you can help by visiting: www.ProtectOregonHomes.com. ■


P U B L I C P O L I C Y

2011 Session: One for the Agesby Shaun Jillions, V.P. Public Policy

Shaun Jillions

For the first time in the state’s history, the oregon House of Representatives will be evenly divided with 30 Democrats and 30 Republicans. the oregon Senate is a near even split as well, with 16 Democrats and 14 Republicans in the chamber. Whether this will facilitate a more bipartisan approach to the issues facing our great

state, or lead to complete gridlock, is still to be determined when the legislature formally convenes in a few short weeks.

What does this mean for our industry? The hope is that a more bipartisan approach will be taken and that urban and rural divides are minimized for the benefit of the state as a whole. There already is a different tone in Salem, with legislators from both sides of the aisle looking for solutions to get our economy and the real estate industry back on track.

Oregon RPAC was extremely successful in supporting state candidates who will now be in office, including 45 of 46 legislative races where the REALTOR® Party candidate prevailed. While we came up a bit short in the Governor’s race, there was a great degree of balance restored to the Legislative Assembly. This directly benefits our Association as we work to protect private property rights, get the real estate industry back on track and work to achieve solutions to Oregon’s economic crisis.

While these are positive signs, the looming shadow over the Legislature and to a degree every Oregonian is the impending budget battle set to take place over the next six months. In order to maintain current service levels, the Legislature must find an additional $3.5 billion over current projections…meaning there is a $3.5 billion deficit to maintain current state services.

There is only one way to raise additional revenue in the legislative process and that is with additional taxes and fees. Otherwise, cuts will have to be made. At this point, everyone seems to agree that some cuts will have to be made, but the fight has only just begun on what that will look like, and whether some cuts will be offset by revenue-raising measures. As legislators look for new revenue we will be vigilant in our opposition to additional taxes on the real estate industry.

This session promises literally to be one for the ages, with our state sitting squarely at a crossroads. In a little less than six months, the elected representatives from your communities will help to chart a course for the future prosperity of Oregon. It is a daunting task, and interest groups from every perspective will be pulling our Representatives and Senators in every direction.

So enjoy the holiday season, and stay tuned for regular updates as the session progresses. Please respond to Calls to Action on legislative proposals that will impact our industry. We must be a loud, unified voice in Salem. It is through the collective strength of our membership that we will help to shape not only the future of our industry but our state as well. ■


The NAR and RPAC Leadership would like to thank our 2010 Major Donors from Oregon

for their generous support of the REALTOR® Party.

John BakerH Rick Harris

David HemenwayPat Kaplan

Golden R

Thank You

H NAR President’s Circle member Hall of Fame members are in gold. President’s Circle Members as of 10/31/2010

Vicki ArnoldStacey Boals

Brian CarlsonRoger Erickson

Byron HendricksShaun Jillions

Darrin KelleherDavid KochDebi Laue

Kathleen MacNaughtonRobert McClung

Alan MehrweinBarbara Myers

Don NunamakerGeorge PerkinsKevin SimrinJeremy StarrPaul Tuttle

Jonathan WallaceBecky WrightJohn Zupan

Sterling R

H Carol Dozois

Crystal R

1210 OR STATE REALTOR 8.5 x11 .indd 1 12/3/10 10:34 AM

Hall of Fame members are in gold.

John Baker Rick Harris

David HemenwayPat Kaplan

Baker County BoardMary Jo Grove

Central Oregon AssociationTom Greene

Central Oregon Coast BoardRob Shepherd

Cottage Grove BoardShane May

Curry County BoardEvonne Tribble

Douglas County BoardKathy Collins

Malheur County BoardDan Coleman

Mid-Columbia AssociationRay Spooner

North Willamette AssociationWalter Wood

Springfield BoardRex Ballenger

Tillamook County BoardSophie Nelson

on tuesday, october 12, 2010 the oregon Association of REAltoRS® announced that Debbie Weaver is the 2010 oregon REAltoR® of the Year. the coveted award, the highest granted by the association, was bestowed in Salem at the 2010 fall Governance Meetings.

Weaver is a broker with Willamette West Real Estate in Corvallis, OR. She has been on the Board of Directors for the Willamette, Oregon, and National Associations of REALTORS® and was REALTOR® of the Year for the Willamette Association of REALTORS® in 2006. Debbie has steadfastly fought to prohibit new taxes on home ownership, keep banks out of real estate brokerages, and provide a voice for balance in livability, affordability and economic growth in Oregon.

Debbie is also an active member of the community, including involvement in the Chamber of Commerce through government affairs and grassroots advocacy.

The REALTOR® of the Year award is based on the recommendation of the Board of Directors and an Executive Committee comprised of past winners of the award. It is designed to recognize a REALTOR® member from one of our Associations in Oregon who has provided outstanding service to all REALTOR® organizations, their profession and their community.

Debbie Weaver Named 2010 REALTOR® of the Year

Congratulations!

2 0 1 0 l o c A l b o A R D / A S S o c i A t i o n

REALTORS® of the YEA R

Clatsop AssociationPam Ackley

Columbia Basin BoardRandy Randall

Columbia County BoardLisa Frahm

Commercial AssociationJeff Borlaug

Coos County BoardBrooke Yussim

East Metro AssociationGarett Chadney

Eugene AssociationMarie Due

Grants Pass AssociationTim Howe

Klamath County AssociationMarye Ashcraft

Lincoln County BoardRick Wright

Polk County AssociationChris Larsen

Portland Metro AssociationGail Fisher

Rogue Valley AssociationColin Mullane

Salem AssociationJennifer Martin

Santiam BoardBarb Patton

Umatilla County BoardKerry Baird

Union County BoardHaley Hines

Willamette AssociationStuart Conser

Continued on page 11

A Reason to Look Forward to the Seasonby celeste Schmorde, HOME Foundation Board of Directors

Ah, it’s that time of year: the holiday season. People just seem to be nicer to each other and i like the mood. i am looking forward to the family gatherings, office parties and community events. I am also really looking forward to the HoME foundation’s December board meeting. With spirits notably low this year, we could all use a good dose of seasonal cheer.

2010 Grant updateIt is an honor and a privilege to

share that the Oregon Association of REALTORS® HOME Foundation Board is spreading our own brand of cheer this December– $70,000 will be granted to 20 deserving, non-profit organizations. The grants will be used to provide homebuyer education, offer technical assistance in housing issues and to “facilitate and increase home ownership in Oregon by all necessary and proper means including, without limitation, promoting the availability of affordable, adequate, safe and decent housing to the citizens of Oregon.” The Board will review and approve grant applications submitted via local associations and boards and the checks will be delivered before Christmas.

These grants were made possible through the fundraising and planning efforts of Oregon REALTORS® staff liaison Jenny Pakula and the tireless REALTOR® and affiliate volunteers serving on the Board and event committees. When all was said and done, the 3rd Annual Taste of Portland

netted $35,000 and our 1st Annual Driving it HOME Golf Tournament raised another $29,000.

2009 Grant updateIn 2009, Advantis Credit Union made

a bold commitment to be the title sponsor in Oregon for Homes for Our Troops. Part of their commitment was that they would find a way to raise the funds necessary to complete barrier-free homes for two severely injured soldiers. When the HOME Foundation received the grant application from Homes for Our Troops, Army SPC Kevin Pannell, 32, and Army SSG Christian Bagge, 28, were both struggling in housing that was unsafe and inadequate for wheelchair use.

Bagge was patrolling outside of Baghdad when a bomb detonated directly below his seat. The force of the explosion lifted his Humvee into the air. Prior to being evacuated from Iraq, he had to have both legs amputated. After 18 months of rehabilitation, he was reunited with his family. He, his wife and two children live in a home that has steps to the front door and every bedroom and the hallways are too narrow for a wheelchair. He describes it

as “being in a prison”. He keeps himself busy by volunteering 20-30 hours a week as a reserve police officer. Construction on Bagge’s single-level home south of Hood River began on September 3rd. The ductwork and HVAC system is going in this week and the Bagge family should be in place in time to celebrate Christmas.

Pannell was on a routine foot patrol in a notoriously dangerous part of Baghdad when his 12-man squad was ambushed. Two grenades audibly landed behind Parnell, one rolled against his right foot and exploded. Pannell had 13 surgeries and, within four days, it was determined that doctors at Walter Reed would have to amputate both legs to save his life. Pannell, his wife and their child are currently living in an inaccessible apartment in Gresham. Pannell cannot wheel himself into the bathroom or see his stovetop while in his chair. This is all about to change though, because on December 11th at 11:00, he and his wife Danielle will be getting the key to their Sandy area home.

I encourage you to check out www.Homesforourtroops.org for more details, photos and updates.

Army SSG christian bagge

The HOME Foundation is dedicated to assisting 501(c)(3) organizations committed to affordable housing.

Army SPc Kevin Pannell


Army SPc Kevin Pannell

A Reason to Look Forward to the Season. . . continued from page 10

HoME sweet Home ProgramAlso new this year is the HOME

Sweet Home Program (HSHP) made possible through an $80,000 NAR workforce housing grant. Twenty four Oregon REALTORS®, representing 10 counties across the state, have already helped their clients secure a $2,000 down-payment assistance grant via HSHP. This means that we have grant funds available for your qualified, first-time homebuyers. Please talk to your Oregon Mortgage Banker partner, or call Jenny Pakula at (503) 362-3645, for further details. (All figures subject to change). This program

is designed to be self-sustaining and we anticipate years of benefit to you and your clients.

HoW You cAn HELPToday I ask that you support HOME

in one or more of the following ways: 1. Make your tax-deductible

contribution on our website (www.OARHOMEFoundation.org) in any amount that you can.

2. Volunteer to serve on the HOME Board and personally participate in 2011’s cheer campaign.

3. Take time to attend one of our three fabulous fundraising events scheduled in 2011:

• March 12th, 2011: Rogue Valley Food & Wine Classic, Rogue Valley Country Club in Medford

• July 21st, 2011: 2nd Annual Driving it HOME Golf Tournament, Langdon Farms in Aurora

• September 15, 2011: 4th Annual Taste of Portland, Oregon Golf Club in West Linn

4. Plan a HOME fundraiser in your community – we’ll show you how and help you through the planning. ■

the oregon Association of REAltoRS® welcomes M. Sean Kidd as the newest member of our legal team. Sean came to the Association last month from the newport, oR law firm of Macpherson, Gintner, and Diaz. Prior to that, Sean practiced law at the firm of Katz and Green in Palm coast, fl.

Sean graduated with a Bachelor’s Degree in Business from the University of Florida, Gainesville, in 1993. He received his law degree at Ohio Northern University in 2002, graduating with high honors. He was admitted to the Florida State Bar in 2002 and the Oregon State Bar in 2009. Sean’s practice areas include: Business & Commercial Law, Business Organizations, Construction Law, Real Estate Law, and State, Local & Municipal Law.

If you’re a member of the Association’s legal hotline, listen for Sean’s voice the next time you call! ■

New Legal Counsel Joins Oregon Staff

M. Sean Kidd

Renewing your license after

January 1, 2011?If so, you must take the

new three-hour Law & Rule Required Course as part of your license renewal.

This course is now available online through

www.oregonrealtors.org/Education Don’t delay – check this off your

‘to do’ list today!Just $29


Joann Hansen Assumes 2011 Presidency

Q The last few of years have been tough for real estate professionals in Oregon and across the country. In light of

recent market trends, what do you see as the major issues facing the Association and the real estate industry today and over the next few years?

A The major issues facing real estates professionals and the real estate industry are reflected in the fact that any property is only

worth as much to the buyer as the lender will lend and the figure the appraiser appraises. With government manipulation of the financial markets, lenders are unwilling to lend which slows the real estate market substantially. This reminds me of the ‘80s under the Carter Administration. We are facing the same ghosts today as we did then, but on a much larger scale. There is urgency in that Americans still need homes. Buyers and sellers need REALTORS® to assist them more than ever in these uncertain times.

Q What are the strengths of the REALTOR® organization that will help deal with these issues and move into the future?

AOur REALTOR® organization, from the National Association to the state and local boards/associations has strength in numbers

as long as we pull together toward common goals. Our advocacy and lobbying influence at all levels is our strongest attribute. This is why RPAC is so important to all of us. Our Executive Committee, Key Committees and staff are all actively addressing these issues daily, guiding us into the future and protecting us in the present.

Q What is your vision for the Oregon Association of REALTORS® and what skills, abilities and strengths do you

possess to move your vision forward?

AMy years of experience in all aspects of real estate have provided me with an understanding of the markets and the tools to

guide this organization through these times of uncertainty. I feel this organization is strong and will continue to be the voice for real estate as we work to protect homeowners from those who would diminish their rights. Providing members with the right foundation for their profession with the business tools they need along with a ready, willing and able staff, as well as the volunteers who serve the Association on committees and task forces is a priority for us.

coos bay REAltoR® Joann Hansen assumed the office of 2011 oregon Association of REAltoRS® president

on november 9. A native oregonian, Joann has been a REAltoR® since 1978. During her tenure with the REAltoR® organization, Joann has served as chairman of a number of committees on both the local and state level and was a state director from the coos county board for 20 years.

Joann’s great grandmother rode the first train to Oregon from West Virginia along with her five children. She was on her way west to work in a boarding house in Salem. Her parents, who were coos bay-north bend area residents, were married for 64 years! Joann also has spent most of her life in coos county and has two children and eight grandchildren.

the OREGON REALTOR® posed a number of questions to President Hansen to gain insight on her thoughts about both the real estate industry and the REAltoR® organization. Here’s what she had to say.


Q What will be your greatest challenge as president?

A My greatest challenge will be our Protect Oregon Homes Initiative. To that end I am challenging each and every

REALTOR® to obtain 25 signatures for this initiative which I fully support. We have fought this transfer tax issue 10 times since I have been in real estate since 1978. With Oregon’s $3.5 billion deficit, who do you suppose the legislators will look to for the additional money? The homeowner, of course. Each signature we obtain will help save dollars for Oregon’s homeowners. Please join me in accepting this challenge.

Q Are there great leaders in history or people you have known in your lifetime who have served as role models or

examples for you? AMy father was the greatest role model I could ever have asked for. He taught me honesty, integrity and a great work ethic. For those of you who have driven

Highway 42, you will thank him for being the author of a petition to have the road improved. My father won the purple heart in WWII for his bravery. He was an

arbitrator and stood for truth, honesty and integrity. I think of him often.

Q Why do you think, Joann, that you are the right person to serve the Oregon REALTORS® president in 2010?

AMy 32 years of real estate experience has prepared me for 2011 presidency of the Oregon Association of

REALTORS®. I opened Joann Hansen Realty in 1983. I have served the Coos County Board of REALTORS® as state director for 20 years. I have chaired the Association’s Issues Mobilization Committee and was President of the OAR HOME Foundation. I have been through good times and bad and I have watched the Association tackle numerous obstacles through the years as a member of the Government Affairs Committee. On a more local level, I have served as Chairman of the Coos County Planning Commission and am still an active committee member.

Q Any final thoughts?

AWith the diversity of our membership there is opportunity. We turn sour grapes into wine. Einstein said, “Imagination is

more important than knowledge.” Now is the time for us to get creative! ■

President Joann (far right) with her children and grandchildren on a trip to Hawaii.

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Can the Seller Place Offers in a Backup Position in a Short Sale?

H O T L I N E H I G H L I G H T S

Jenny PakulaStaff Counsel

Question: in a short sale, can the seller accept only one offer and place all other offers in backup position? Wouldn’t the seller only be bound by one offer even if they accept all offers presented, as long as the appropriate contingency language is included? Since the seller can accept numerous contracts with a short sale contingency, why can’t they do the same thing with other contract contingencies, such as the buyer’s sale of their existing home?

Answer: You bring up two separate issues, so let’s respond first to the initial question. The first thing always to remember in a short sale is that there are two separate agreements at play. One is the sale agreement between the buyer and seller. The other, and this is the one that is missed, is the agreement (or “consent”) between the seller and their lender regarding the note or mortgage. As an industry we still tend to think of this second agreement as consent to the transaction, but it is really an agreement by the lender to take less than the payoff value of the note or mortgage. The seller has complete control over both agreements, but also must act honestly and in good faith in forming and performing both agreements.

What that means is that while the seller is free to accept or reject or do whatever they want with an offer they may get on their property, just as they always can, they cannot use that right to mislead or deceive the lender when they begin negotiating

with the lender to satisfy their note or mortgage. What a short sale contingency does is make the seller’s obligation to perform the sale agreement contingent on reaching this second agreement with their lender. That contingency will protect the seller from having to perform more than one

contract and therefore does allow the seller to accept more than one contract. That doesn’t mean they have to accept more than one, just that if that’s best for their situation (and it usually is because of tax, credit and note deficiency issues), they can continue to market, accept offers and submit them to the lender.

That does not, however, mean the seller has to accept and forward all offers (unless the lender demands that as part of the negotiation for consent). The seller can do as they please as long as they negotiate with the lender honestly and in good faith. Honesty and good faith are circumstance based. The seller cannot deceive or mislead the lender while negotiating to satisfy their note or mortgage any more than they could do these things while negotiating with the buyer for the purchase of the property. Putting an accepted offer in backup position and withholding that information from a lender with whom you are negotiating is likely to be considered deceptive or misleading if the lender does not know of the accepted offer and the accepted offer will substantially reduce the lenders’ loss. It may be evidence of dishonesty or bad faith if the seller accepts

only one offer and puts the others in backup position.

Because circumstance matters and circumstance is often both ambiguous and subjective based, the smart way to handle this issue is to decide on a strategy and disclose that strategy to the lender. The strategy could include submitting one offer and taking backups, hold the offer period open for a set time, take and forward the best offer and stop marketing, or continue to market the property. Given the general lack of communication when it comes to lenders, the easiest way to communicate market strategy to a lender is in a cover letter that accompanies the first offer submitted.

On to your last question. A contingency is any provision of a contract that conditions a party’s obligation to perform the contract. “Subject to” or “contingent upon” is common contingency language, but no special words are needed. The short sale addendum you use says the sale is “contingent upon” the seller obtaining the “consents” necessary to convey marketable title on the terms and conditions of the offer. In other words, the seller is not bound to convey marketable title under that contract unless they obtain the necessary consents for that contract. There are all kinds of contingencies, but they all condition one or both parties’ obligation to perform under the contract.

In a short sale contingency the seller’s performance to convey clear title is conditioned on the necessary creditor consents to that particular transaction. In



Can the Seller Place Offers in a Backup Position in a Short Sale?. . . continued from page 14

a sale of existing property contingency, the buyer’s performance to pay the purchase price is conditioned on the sale of an existing home. Each contingency has different benefited parties and different events but are still just conditions within the definition. As far as accepting more than one offer in a short sale is concerned, that’s a function of the nature of the short sale contingency, not just that there is a

contingency. Because the contingency is obtaining the consent of the creditor to a particular offer, and the lender is going to consent to one specific offer, the seller will not become obligated on more than one contract (because the rest will fail for lack of consent) and therefore can accept as many offers as they like.

A seller can accept as many offers as they want as long as they will only have

to perform one of them. Taking offers in “backup” is the traditional way sellers accept more than one offer, but it’s just one way, not the only way. In a short sale, the short sale contingency protects the seller in the same way a backup contingency protects them in a normal sale. If there is any question that your seller may become obligated on more than one contract, have them talk to a lawyer. ■

Every day real estate agents are sued for efforts on behalf of the client. by using risk reduction tools like the oregon REAltoRS® legal Hotline and advancing your knowledge base through professional designations, your risk of being sued is lowered. but if sued, you’ll want quality Errors & omissions insurance to help shoulder costs.

Policies vary but all define which services are covered, what constitutes a claim and how to report disputes. Review your E&O policy’s definitions to verify that the services you/your company provide are covered. Items such as drafting disclosures/disclaimers, advising clients on issues outside the scope of expertise (tax advantages or disadvantages, foreclosure versus short sale, etc.), who gets paid and how, or a variety of “value added” services like hiring contractors or accepting a power of attorney for out-of-town clients to execute documents are not considered real estate services. Anytime an agent is asked

R E A LT O R ® R i s k M a n a g e m e n t

Thorough Documentation is a Mustby lisa Riggins, Regional Director, Pearl Insurance

to provide services not typically performed, the principal broker should be consulted.

All policies provide exclusions and should be reviewed for non-standard ones that prevent services you normally provide from being covered, i.e. property management or the sale of land and/or commercial properties.

As soon as any dispute involving your transaction arises, you should immediately go to your principal broker with the details. A quick test to determine if you may be at risk for a claim of misrepresentation—the most common type of E&O claim—is to ask: 1) Did I give information to a client? 2) Did the client rely on that information? 3) Was the client damaged by that reliance? If the answer to all three questions is “Yes,” you may be facing potential liability.

In claims of omission, we are sent many issues with the wrongful return of earnest monies, correct signatures not obtained, forgotten contingencies (i.e., are appliances included?), or contract addendums. If



the oregon Young Professionals network (YPn) is off and running after a successful kick-off breakfast at the oregon Association of REAltoRS® Governance meetings in october. our breakfast was filled with eager young REALTORS® and affiliates wanting to learn more about our group and how to get involved. We now have a full Advisory board for 2011. Zach benedict from Eugene is our Vice-chair, lindsey culver from Portland is our Events Director, Donna Jo Merrifield from corvallis is our communications Director and Amy libby of lincoln city is our Membership Director.

We are very excited to begin planning our networking and educational events throughout Oregon for 2011 and to shape the chapter for future advisory boards. Lindsey and I had the opportunity to attend the National Association of REALTORS® convention in New Orleans in November where we were invited to network with YPN members from across the country.

Oregon YPN Chapter Now up and Runningby Kerri Hartnett, 2011 YPN Chair

It was incredible to network and catch up with like-minded individuals who are career driven, education based and very savvy when it comes to doing business at a high level.

The room was filled with over 500 of the best and the brightest in our industry, many of whom had been featured in one of REALTOR® Magazine’s “30 Under 30” issues, a feature for 10 years. There was food, beverage, friends, and fun, in addition to an award for the Chapter of the Year, presented by our 2011 National Association of REALTORS® President, Ron Phipps.

There were so many opportunities at the convention, including a YPN group participating in a Habitat for Humanity build, helping to continue rebuilding the Crescent City. Many YPN members from across the country were featured speakers at the educational sessions offered by NAR, including the dynamic founder of the National YPN organization Shannon Williams King, from San Diego, CA.

It is an incredible experience to be part of the shift in the real estate mindset, and we’re looking forward to taking Oregon along for the ride. We are very excited to bring the same energy back to our own chapter as we hit the ground running with our own 2011 events. We continue to look for Oregon YPN members to get involved with our events to ensure we offer the best networking and education programs in the industry.

If you’re interested in helping to plan our 2011 calendar, please contact Lindsey Culver at 503/810-1943, or by email at [email protected]. Feel free to contact me at 503/336-6759, or by email at [email protected], regarding any questions you have about our committees, or to learn how to join in the fun. Together everyone achieves more, and we look forward to working with our members throughout the state to move the real estate industry forward.

Yours in success!!! ■

asked what company to use for a certain service, simply provide a list of qualified professionals to avoid claims alleging negligent referrals. Document! Have your clients sign and date a receipt or copy of the information you are providing. Similarly, dual agency transactions require significant care and forethought as the shared information provided to you by each party may cause inherent conflicts of interest that cannot be avoided by a representation disclosure.

With declining real estate markets and

property values, frustrated buyers/sellers are making more attempts to hold the agent responsible for duties typically performed by other professionals such as inspectors, attorneys, contractors … even for situations involving their own due diligence. You should make an effort to educate clients on their responsibilities in the transaction. Always recommend inspections; if a party refuses an inspection, have them sign and date a waiver.

Thorough documentation is your best friend in the event of a claim made against you! ■

___________Pearl Insurance is a nationally known broker,

marketer, and administrator that specializes in the design and administration of quality insurance plans for associations, affinity groups, unions, and large firms. In addition to providing real estate professionals with quality products and services for 30 years, their partnership with the XL Insurance companies (through Indian Harbor Insurance Company and Greenwich Insurance Company) solidifies their strength, allowing them to offer association members an A rated (by A.M. Best) E&O program. For more information about the OAR Endorsed E&O program, call Lisa Riggins, your Regional Director at 866.679.0893 or visit us online at www.pearlinsurance.com.

This information is intended to provide a general overview of the services described. Only the insurance policy can give actual terms, conditions, and exclusions.

Thorough Documentation is a Must. . . continued from page 15


EvENtSCALENDAR

2011 At-A-gLANCEFEBRUARY 16-18Leadership Institute NorthwestSurfsand Resortcannon beach, oR

FEBRUARY 23-25 Region 12 Meetings Grand Hyatt HotelSeattle, WAoregon REAltoRS® 800/252-9115

FEBRUARY 28Professional Standards AcademytbDoregon REAltoRS® 800/252-9115

MARCH 10Rogue Valley Wine & Food ClassicFundraiser for the HOME FoundationMedford

MARCH 16REALTOR® Day at the CapitolSalem

MARCH 18-22NAR Association Executives InstituteDallas, texas312/329-8200

MARCH 30-31Accredited Buyer Representative (ABR)Core CoursePortland Metro Area

APRIL 12Law & Rule Required CourseSalem conference center

APRIL 12-13Oregon REALTORS® Governance Meetings& DSA LuncheonSalem conference centeroregon REAltoRS® 800/252-9115

APRIL 26-29Oregon GRI (tentative)Course 200Salem conference center oregon REAltoRS® 800/252-9115

MAY 9-14 NAR Midyear Meeting Washington DcnAR 312/329-8200

JUNE 23-24Oregon/Washington Joint AE Trainingoxford Suites (Jantzen beach)Portland

JULY 212nd Annual Driving it HOME Golf TournamentFundraiser for the HOME Foundationlangdon farmsAurora, oR

AUGUST 22-23NAR Leadership Summitchicago, ilnAR 312/329-8200

SEPTEMBER 15Taste of PortlandFundraiser for the HOME Foundation oregon Golf clubWest linn, oR

OCTOBER 11-12Oregon REALTORS® Governance Meetings& Installation ProgramSalem (tentative)oregon REAltoRS® 800/252-9115

NOvEMBER 9-15NAR Annual Convention Anaheim, cAnAR 321/329-8200

NOvEMBER 28-DECEMBER 1Oregon GRI (REALTOR® Institute)Sheraton Hotel Portland Airportoregon REAltoRS® 800/252-9115

2011

oregon realtor magazine

Documents