Happy 2011!
AMENDMENTS AND ESCROW INSTRUCTIONS: Over the holiday I had the unenviable job of putting together a new vacuum cleaner. The directions came in various languages and included pictograms. There were about 10 steps and lucky me, I got to the 5th step and hit a major obstacle. What do you mean “loop the cord around the hole on the handle”? What hole? It took me half an hour to get past step 5 and mind you, I am an Escrow Officer! I am trained to follow instructions!
In the world of escrow, escrow instructions and amendments are the “map” that guides us on the road to closing the transaction. As in any map, it needs to be clear and concise so that it gets you where you need to go, without the “scratching the head” or “turn the map around to face east” part. A badly written escrow instruction or amendment which does not convey the parties’ intent clearly will leave everyone scratching their head, and, more importantly, may be hard to decipher 4 years later if the file has gone into litigation.
Many old-time escrow people have a tendency to put in words that look like the attorneys had taken a shot at it, for instance, all those “hereins” and “therefores” and “thereins”. But really, there are only a few tricks to doing up a proper instruction:
- First of all, make sure you are absolutely clear on what the parties’ intentions are.
- Think it through: is a deadline needed? Are there consequences to certain actions or non-actions? Does the final result require verbal or written acknowledgements?
- Craft the instructions in plain language, and then read it back to yourself. Does it make sense? If you worry it may not make sense, have someone else read it and question it.
- Use correct grammar and punctuation. A comma or period put in the wrong spot may make the entire statement incorrect.
You are probably wondering why I need to bring this whole instruction crafting skill up. That is because the way real estate contracts work now, it is not the Escrow Officer who draws up the original “map” for the transaction; it is the real estate agent, using the California Association of Realtors Purchase Contract, or attorneys on their own free form. A badly written contract will be a headache for the Escrow Officer to follow and would have to be clarified by amendment to be sure all parties are protected.
WHAT’S UP FOR THE NEW YEAR? Different economists have different ideas on how 2011 will shape up. This is the view from my desk (others’ views will certainly differ):
- Mortgage rates will remain down, although rates seem to be rising right now;
- Zero cost refinances will be up;
- And processing time for mortgages will be up.
- Foreclosures will be up, once the Lenders deal with the robo-signing issues;
- And Short Sales will also be up as the foreclosure market goes up and asset managers will be pressured to take a softer line when negotiating.
- Residential property sales will go up, especially in the nicer areas of Southern California;
- Commercial property sales will go up, as prices have been soft, allowing entrepreneurs to tentatively get back into the market.
You can read a related article here.
WHERE HAVE YOU GONE, STEVE JOBS? Some people have too much money, or too little time, or not enough interest in nickels and dimes. From past newsletters you all know that every year we escheat to the State of California all outstanding checks never cashed by our clients. Every year we send out letters begging for response. Only 20% actually do respond – sometimes there is no forwarding address, other times they throw our letter away or disregard it. I had to laugh when I read this article on how Apple Computer is escheating the huge amount of $37.91 for a check Steve Jobs never cashed. Last I heard Steve Jobs has this nice job with Apple. So what, they couldn’t find him? Did they even bother to go to his cubicle and say, “Hey! Cash your check or we will send it to the State to help them balance the budget!!!” See all these amusing stories that you can find on the Internet…..LOL!
AIRLINE BAGGAGE FEES – THE NEW MONEYMAKER: If you have followed my grumblings about extra fees charged by the airlines, you know that this is a real sore point with me. I don’t like being charged $35.00 just because my bag was overweight by 5 lbs. When you are at the ticket counter and have people lined up behind you waiting impatiently to check in, you have no choice but to pay if you can’t re-arrange your luggage to take care of the excess weight. What, dump part of my clothes? The report on CNN is that the baggage fees collected by the airline industry will top $2.5 billion (which includes my $35.00)!!! And now they have just raised their fares. Is this skyway robbery, or what?
TECH ISSUES AND PARENTS ARE LIKE OIL AND WATER: Like many, many parents out there, I rely on my children’s help when I have tech issues or when my computer has gone where this woman has never gone before. I am lucky as I can immediately call my son and he will amble over and look at what I have done (or not done) wrong. But many parents don’t have that luxury; their techie children may live far and beyond their immediate desperate reach. Ever try to walk a 60 year old “dinosaur” via the cell phone through the intricacies of burning a DVD? Google, the ultimate young tech company, has launched TeachParentsTech.org, and offers a “tech support care package” which enables the young techie to help the old dinosaur without either party losing their cool or patience. What a great idea! I understand lots of young Google staff were faced with this quandary so the light bulb went on!
TAX HIKE PREVENTION ACT: The bill approved by the lame duck Congress and signed by President Obama right before Christmas will have tax implications for all of us. Besides extending the payment time period for unemployment benefits, it also keeps the income tax rates the same and will raise the exemption level for the Alternative Minimum Tax, which helps those with high income levels (to the dismay of the poorer). For further information on whether you are affected by this Act, see the article attached here and consult with your CPA. Make this your New Year’s Resolution: Plan your 2011 financial map in January and review the map every quarter. Don’t wait until December of 2011!
WORST STATES TO RETIRE IN: If your 2011 financial map includes retirement, well, we all know that the average person can’t retire and survive comfortably in California. But at least the good weather we have here does mitigate that fact somewhat. What if you lived in New York, Wisconsin, or New Jersey? There are a number of factors we should consider (see article here) and now, with the miseries of the New Year’s Eve storms in the northeast, climate issues there can make it a double whammy. This next article would suggest that bad weather does affect the city and county government’s strength. The huge costs of snow removal or other acts of Mother Nature do force cuts to other public services when the budgeted amounts cannot cover the cleanup. Given a list of all the issues we should all consider, I opt to retire to ….. Costa Rica!
EXCHANGING THOSE GIFT CARDS: If you received a gift card that you don’t want, you can exchange it for one that you prefer more or for cash, if you don’t mind losing some of its value. Check out these sites that can do this for you. The way I look at this, even if I lose 10% of the card value, it would still be acceptable if I can spend the balance somewhere else for something I really want. Just remember, don’t lose or forget about the cards! Why give that retailer the satisfaction of getting $50.00 for nothing? That would really be a “gift” card… to the retailer!
STAMPS ARE FOREVER! With the start of the Chinese New Year, all new first class snail mail stamps will be Forever stamps – non denominational. Yay! That means I can get rid of all the 2 cent and 1 cent stamps that I have been hoarding for each price increase. It also means that I don’t have to actually remember what the first class stamp denomination is every time I have to mail a card. Life just got easier. Read about it here.
TAX ROMANA: Instead of Pax Romana, we can look forward to “Tax Romana” as Rome institutes a special tax on tourists for lodgings (3 euros) and entry fees (1 euro) to museums and other tourist attractions. Using my 2010 Rome trip as an example, my husband and I would have had to pay an additional 12 euros ($16.00) a day for this tax to balance Rome’s precarious coffers. (Remember, Italy is a PIIGS nation).
Governor Brown, please take note. Perhaps we should add such a tax to those attractions in California which tourists flock to? Like Disneyland, which had to close their doors due to an overabundance of “tourists” during the holidays?
English inventor Michael Faraday conceived and built the first electric motor then tried to get the backing of Prime Minister William Gladstone. Gladstone wasn’t impressed with the crudely made invention. “What possible good is it?” he asked? Faraday’s reply changed Gladstone’s attitude: “Some day you’ll be able to tax it.”
Don’t know if the above is true, but it sure makes for a fun historical anecdote!
Have a great year!
Juliana Tu, CEO, CSEO, CBSS, CEI
Escrow Manager
