AB 957: What is going to be the real difference in "prohibiting" banks from requiring their escrow and title?

By
Real Estate Agent with John Aaroe Group BRE #01708344

So Bill AB 957 was recently passed that prohibits a bank seller to require the buyer to purchase escrow services, title services or a natural hazard disclosure statement that is approved by them.

So I'm trying to think this one through.

Sure, they can't outwardly "mandate" that they choose their escrow, title and hazard disclosure companies.

But isn't kind of like the same issue with normal sales?

We all know that when you're in a multiple offer situation, it's fairly common to write in "seller's choice" on these services in order to make your offer more competitive/attractive to the seller.

Depending on the circumstances and whether or not it is a multiple offer situation, is the bank/seller still not going to choose an offer that is more attractive to them based on all elements of the offer?

So what is the real difference here?

Am I missing something?

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  1. Richard Ruggaber 10/18/2009 01:47 PM
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ab 957 what is going to be the real difference in prohibiting banks from requiring their escrow and title

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Rainmaker
996,044
Karen Anne Stone
Fort Worth Real Estate
New Home Hunters of Fort Worth and Tarrant County

Ralph:  At first thought... I think a bank seller should be able to mandate who provides those services.  If the bank is the seller, and wants that in the purchase agreement... and will refuse to close without it being that way... they should have the right to demand it.  If the buyer wants to reject that demand... that is also their right.  As long as those mandates service providers are doing their jobs in a legal, professional manner, and as long as their products are as good or better than anyone else's... I do not see the problem.

October 17, 2009 01:00 AM
Rainmaker
301,471
John Occhi
SRES,CPRES.ePRO - Temecula-Murrieta CA Real Estate
Mason Real Estate

Ralph,

As an REO Listing Agent I can say that we are better off with the Escrow services we are now using.  My biggest fear with this bill is that now all of a sudden there are going to be Escrow companies and officers getting involved in REO's who have not been in the heat of battle for the last 2 years.  Same thing with agents, if a green agent took over my workload today - without any experience,they would fall flat on their face unless they had a mentor tho took the time to teach them the ropes - I am sure it is the same with Escrow.

Yes, I have my favorite - pre-collapse - escrow officer and she did an awesome job.  Now though, I know of several escrow offices that have geared up and perform high volume REO Transactions - very successfully.  Let's not re-invent the wheel.

John

October 17, 2009 01:24 AM
Rainmaker
598,840
Donne Knudsen
CalState Realty Services
Los Angeles & Ventura Counties in CA

Ralph - BINGO!  You are absolutely right!  If a buyer doesn't agree to the sellers service, you can bet that the bank seller will not choose their offer.  This just happened today to one of my clients who wants to make an offer on an REO.  His Realtor told him that if he doesn't agree to the sellers services then his offer wouldn't be looked on as favorably as other offers that agreed to use the sellers services.

October 17, 2009 11:59 PM
Rainer
241,202
Douglas Fischer
East Oahu Realty - Selling Honolulu, Hawaii Condos

Right on!  You are indeed right,  It's the same horse, of a different color.  Anytime we write an offer, where there are multiple offers involved, we try to keep the offer as clean as possible.  So, you're right.  We let the seller choose escrow and title, as well as the termite inspector, etc.  I think Arnold needs to read a few AR blogs. ; )

October 19, 2009 02:16 PM
Rainer
241,202
Douglas Fischer
East Oahu Realty - Selling Honolulu, Hawaii Condos

Ralph, by the way......I really enjoy rading and commenting on your blog posts.  They are always very intersting, on topic and thought provoking.  Keep up the good work.

October 19, 2009 02:17 PM
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Ralph Gorgoglione

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