What’s first: flying cars or instant home ownership?

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flying car

This headline is blatantly stolen from this article that I recommend for your reading pleasure. This blog, written weekly since late 2014, has two goals: (1) to keep South Carolina real estate lawyers out of trouble; and (2) to keep South Carolina real estate lawyers in business. This article, about the future of home ownership, is recommended to advance the second goal.

Julian Hebron, the author of this article, is the founder of The Basis Point, a sales and strategy consulting business for consumer finance and real estate companies. He has extensive experience in real estate, lending and financial services. Investopedia touts itself as the world’s leading source of financial content on the web. Investopedia commissioned Julian Hebron to explore what home buying, improving and selling will look like in the next twenty year, and he said he jumped at the chance.

The article describes a vision of home buying for consumers in the future:

  • Pull out your phone and search for homes.
  • View homes using full 3-D modeling and video so you can truly “tour” the home right on your phone.
  • See every specification about the home, neighborhood, schools, restaurants, crime, taxes, etc.
  • Tag the homes you like to stay organized.
  • Get notified over time on sales and price changes of homes.
  • Make an offer on a home by pushing a button.
  • Avoid long appraisal process because the home’s value is verified by date and 3-D modeling/video, and this automated valuation method is accepted by all lenders.
  • Close on the home instantly because your loan is always approved via your secure blockchain wallet with realtime income, asset, debt, and credit score data. All you do is schedule licensed and reviewed local movers and contractors to facilitate your move.
  • Schedule moving day food delivery from recommended restaurants in your neighborhood.

And here is the description of home selling in the future:

  • Fill out a short form on your phone saying you’d like to sell your home.
  • Receive a home purchase offer in 1-2 days, and close in as little as seven days.
  • Or shop and hire a licensed and reviewed local realtor to list your home if you don’t like the instant offer.
  • Get asked if you’re purchasing a new home, and, if so, get prompted to follow the home buying steps above.

How close are we to this vision? The author isn’t sure but plans to write future installments to dig deeper into each player in the vision.

Can we stay in the market if this vision comes true? 

I believe we can. I believe our closing law firms should establish strong systems to document processes and keep them current in an effort to be able to nimbly adjust to the changing market. I believe we should stay on top of changes in technology because technology will certainly be a huge driver in these changes. I believe we should continue to establish strong relationships with the players in the real estate industry, particularly the real estate agents. We will all be fighting for business as the market changes, and keeping current on the available information and the current players will be vital to remaining in the game.

This blog will continue to provide South Carolina real estate lawyers with current information to support these efforts. Watch this space!

The Law Firm of Your Dreams

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Say Goodbye to Your Boss, Say Hello to the Law Firm You’ve Always Dreamed of

JFisher Book 2Readers of this blog know I am prone to write a book report from time to time, but only about books that I think will benefit South Carolina real estate practitioners. I’ve blogged previously (twice!) about John Fisher’s The Power of a System; How to Build the Injury Law Practice of Your Dreams. John Fisher has a new book that I also recommend for dirt lawyers.

By the way, John was a speaker at our Chicago Title annual seminar on October 14, and he did not disappoint. If you missed him, I highly recommend that you begin following what he writes and that you seek out the opportunity to hear him speak.

His 2019 book is entitled The Law Firm of Your Dreams; Say Goodbye to Your Boss, Say Hello to the Law Firm You’ve Always Dreamed of.

In the formative days of his medical malpractice firm, Fisher wished for a step-by-step manual for running a profitable practice because, like the rest of us, he was not taught strategic planning, goal setting, business metrics, managing employees, managing clients, and marketing in law school. He later developed that manual for his firm, not just technical systems for running a business, but also the managerial and entrepreneurial principles to keep a constant stream of new cases and clients coming through the pipeline.

Those systems were covered in his first book, and numerous lawyers have said the book provides a roadmap for accurate and precise business development for any lawyer in any practice anywhere!

The 2019 book starts with the premise that the lawyer’s mindset is the most important aspect of creating the ideal law firm. Without the right mindset, the author says, the best policies and systems won’t do you much good. He recommends becoming a “specialist” even though that word is a “no no” under our ethical rules. John believes that if you don’t specialize in something, you will be marginal in everything.

I have a lawyer friend who has learned to specialize. He practices in the area of residential real estate closings in a coastal area. He is a sole practitioner, and he very narrowly defines the scope of his work. He seeks to make buyers, sellers, real estate agents, and lenders happy in connection with their closings. For that reason, he will not write what I call “nasty lawyer letters”. He refers that work to a friend. He will also not do any kind of work that will slow down the very well-oiled machine that keeps him churning out his closings in a timely and accurate fashion.

He may set up a simple LLC for a closing, but he refers out complicated entity formation, complicated trust formation and anything to do with estate planning. He may draft a simple set of restrictive covenants, but he refers out complicated subdivision development and commercial real estate closings of any type. His clients, lenders and real estate agents are happy and return again and again. Fellow lawyers love that he refers complicated work to them, and they refer residential closings to him in return. Win. Win. Win. John Fisher would approve of his system.

John Fisher recommends that a lawyer should delegate almost everything, both professionally and personally. He says, “your career (and life) will be chaos if you answer every phone call or email during your work day. You will never go home in time for dinner or attend your kids’ ball games if you insist on being everything for your clients. That’s why you have to delegate everything you can and do only those things you cannot delegate.”

And the best thing you can do for your career, according to this author, is to devote as much time and energy as you can to marketing and growing your law practice. A large part of both books is devoted to marketing.

I am a huge fan of the ideas and step-by-step instructions of this thoughtful lawyer and author. I invite you to read his books and follow his advice to improve your practice and your life!

Holy Statute of Frauds

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Can text messages create binding real estate contracts?

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South Carolina real estate practitioners, do you remember that old case from law school where a contract was created on a napkin?  That case made me imagine drunken parties in a bar passing a napkin back and forth as drinks came quicker and caution evaporated.

That simple case is seen in a new light, however, as courts across the country struggle to apply the ancient statute of frauds to the evolving world of electronic communications. Telegrams, faxes and emails have all been found to satisfy the statute of frauds in some situations.

We haven’t seen a South Carolina case on the topic of text messages and binding contracts, but The Southern District of New York and a Massachusetts Land Court recently found that text messages may be sufficient to serve as evidence of the existence of binding agreements between negotiating parties.

In the New York case, the plaintiff real estate broker relied on a series of text messages to show the existence of a binding fee agreement. The court held that the text messages satisfied the writing requirement of the statute of frauds but failed to satisfy the signature requirement.

The Massachusetts court, on the other hand, found that a series of text messages did satisfy the signature requirement of the statute of frauds because a signature of a sort was included within multiple text messages between the parties. Some of the texts contained typed names of the parties beneath the substantive messages.

Real estate practitioners should caution their clients in the use of texts and other non-traditional means of communicating. Advise clients to refrain from typing their names under text messages. Better yet, advise clients to include disclaimers to the effect that no agreement involving the subject matter is final until wet signatures are applied to a physical document.

And even better than that, caution clients that texting and negotiating real estate contracts may be almost as dangerous as texting and driving.

While text messaging can’t be surpassed, at least in 2019, when it comes to speed and efficiency, a new and different level of caution may be needed when engaging in negotiations through such seemingly informal means of communicating.

Do you and your employees work remotely?

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Check out these network tips for remote employees

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Our office has been involved in workflow studies for the offices of our attorney agents, and one point that comes up often is that allowing employees to work at home increases employee satisfaction and retention. We’ve witnessed many paralegals permanently move to remote locations and successfully retain their jobs. Telecommuting seems to work successfully in many instances.

In our own office, all our employees have the capability to work remotely. We learned when our office building suffered a fire in 2012 that the ability to access our network from remote locations allowed us to continue our business without interruption. The day after the fire, we disbursed the funds for a large commercial transaction for an agent from my kitchen at home!

And since South Carolina routinely finds itself within the maze of the spaghetti models during hurricane season, the ability to work remotely is important if not necessary to maintain contact while taking care of school children and hunkering down at home.

American Land Title Association (ALTA) published an article on September 5 attaching The Center for Internet Security, Inc. (CIS) Telework and Small Office Network Security Guide.

This 25-page paper provides useful, up-to-date guidance on keeping your networks safe when employees are allowed remote access. The guide provides recommendations for buying equipment, setting up networks, setting up devices, securing home routers and protecting against digital threats.

The ALTA article refers to a Forbes study that found 38 percent of teleworkers lack the technological support they need to do their jobs. Securing devices and networks that allow telecommuting is critical. The guide includes a network security checklist and tells users how to map security configurations to provide cybersecurity protection at remote locations.

Thanks to ALTA for pointing us to this valuable resource, and thanks to CIS for publishing it!

A glimpse into the future of residential real estate sales

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Here’s what may happen when iBuyer companies enter our market place

iBuyers

I read an interesting article from Forbes recently by John Wake entitled “The Surprising Way Real Estate Agents are Adapting to ‘iBuyers’ Buying Houses Directly From Sellers.” I invite you to read the article in its entirety here.

The article focuses on residential real estate sales in the Phoenix market which the author calls “ground zero for the iBuyer explosion.” What does he mean by that? Apparently, the largest iBuyer companies, Opendoor, OfferPad and Zillow Offers, either started their operations in Phoenix or concentrate their efforts there. He estimated five to six percent of houses that change hands in that market are sold to iBuyers.

The article focuses, as its title suggests, on how real estate agents are adapting to this disruption in their market. But I find the article instructive to South Carolinians on the topic of how these internet sales are orchestrated and how they might affect sellers in our market when this disruption migrates east to us.

The author says that a homeowner who seeks to sell a house via an internet company must first complete an online form. An offer is typically made within two or three days. If the homeowner accepts the offer, inspectors will be sent to the house and will come back with a list of repairs and estimated costs for the repairs that the buyer requests before the closing.

As in our current process, the seller can agree to make the repairs, to reduce the price of the house to cover the cost of the repairs, or to terminate the contract.

The author suggests that real estate agents commonly complain that iBuyers tend to offer less and to ask for more repairs than traditional buyers. In other words, the seller makes more money in traditional sales involving local real estate agents.

The flip side of that coin is, of course, that closing with one of the iBuyer companies is more convenient than the process in our marketplace. A seller doesn’t have to get the house ready to sell, stage it, keep it clean for showings, or leave home for showings and open houses. The closing date may be more flexible, and there probably will not be contingencies for appraisals and financing.

How are real estate agents in Phoenix adapting? According to Mr. Wake’s article, real estate agents are assisting sellers by obtaining multiple iBuyer offers, analyzing and explaining the offers, discussing the options of accepting one of the iBuyer offers or beginning to market the home in the traditional manner, and coordinating everything with the iBuyer or traditional buyer, including repairs.

In short, real estate agents are attempting to become iBuyer experts in addition to traditional home sale experts.

Real estate lawyers, we need to be ready for this disruption when it hits us. We will want to be able to explain the changes in the market to our clients as well as to educate our real estate agents on how to stay in the game. Let’s keep our eyes and ears open! I’ll help!

FCC Publishes Scam Glossary

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FCC Seal

The Federal Communications Commission recently published a Scam Glossary, which you can access here. The glossary provides a helpful description robocalls, spoofing scams and related consumer fraud.

The FCC tracks these nefarious items through consumer complaints, news reports and notices from other governmental agencies, consumer groups and industry sources.

The glossary includes links to more detailed information posted in the FCC’s Consumer Help Center and trusted external sources.

Here are a few of my least favorite schemes from the glossary:

“Can You Hear Me” Scam: Scammers open by asking a yes-or-no question, such as: “Can you hear me?” or “Is this X?” Their goal is to record you saying “yes” in response. They then may use that recording to authorize charges over the phone.

Flood Insurance Scam: After floods, scammers may target hard hit areas with fake calls about flood insurance to steal private information or money. They may spoof a legitimate flood insurance company to appear more convincing.

Google Listing Scams: Some scammers claim that they can add or remove you or your business from Google searches or similar services. These callers, unaffiliated with Google, seek payment for services they can’t deliver.

Jury Duty Scams: Callers pose as local law enforcement, claiming they have a warrant for your arrest because you missed jury duty. They may instruct you to pay a fine by wiring money or using gift cards.

Porting: A scammer gets your name and phone number, then gathers other identifying information that can be used for identity theft. Pretending to be you, they then contact your mobile provider to report your phone as stolen or lost, and then ask for the number to be “ported” to another provider and device. They can use your number to gain access to your financial accounts and other services with two-factor authentication enabled.

Smishing: Short for “SMS phishing”, smishing often involves text messages claiming to be from your bank or another company. The message displays a phone number to call or a link to click, giving scammers the chance to trick you out of money or personal information.

Wangiri/One Ring Scam: When your phone rings only once, late at night, you may be tempted to call back. But the call may be from a foreign country with an area code the looks deceptively like it’s in the U.S. If you dial back, international calling fees may wind up on your bill. Such cons are known by the Japanese term “Wangiri”.

Check out this useful list, share it with your office and your family members. And be careful out there!

Amazon-Realogy partnership is making news in the housing market

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New home buying program not yet available in South Carolina

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According to several news sources, Amazon announced in late July that it will partner with residential real estate services company Realogy Holdings Corp. to launch a new home-buying program called TurnKey.

A TurnKey portal will be available through Amazon’s gigantic retail platform, Amazon.com. Potential home buyers who use that portal will be matched with real estate agents from one of Realogy’s brands like Coldwell Banker, Century 21 and Sotheby’s. Realogy is purportedly the largest residential real estate brokerage company in the country.

Potential buyers will go to Amazon.com/TurnKey and answer four questions about who they are and where they live. They will next get a phone call from a Realogy representative who will attempt to determine what sort of home they are seeking and how serious they are about buying. Information about the best prospects will be sent to Realogy real estate agents.

Home buyers who close with Realogy agents will receive up to $5,000 in products and services. Coupons for $450 – $1,500 in Amazon Home Services like unpacking, cleaning and furniture assembly will be available in addition to between $500 and $3,500 in smart-home products. Purchase of a $700,000 house will be required to receive the top credit.

The two giant companies are interested in finding out whether home buyers will look for new homes in the same place where they already shop for everything else. The credits for products and services will give Amazon a new way to market things it already sells, such as handyman services and smart-home gadgets like Alexa-powered speakers, doorbells and security cameras. The new lead-generating program will seek to help Realogy recruit and retain agents and increase market share.

The new program is starting in 15 markets, including Atlanta, Chicago, Seattle and San Francisco. We’ll have to wait to see how quickly it moves to South Carolina.