Thanks,

John C

I will say that after speaking with my Title officer, she indicated that she would never charge me since she wouldn’t want to loose my business.

I can say that I will do everything in my power, if the home buyer or investor cancels during the disclosure period to make sure that they are not charged a cancellation fee by the Title Co. I stand firm on that since this is a time of decision making.

*Don’t worry about the “R’s”. It would be nice to have spell check on the comment section.

my “R” key is not working very well on my keyboard.. I have to hammer it to make it work.. Hence the many typos.. Sorry

Like you, I pick and choose my listings. Some are not worth taking. However, I approach it from the stand point that you never want to openly “walk away”. So if it is someone that I can see that I really do not want to work with, I throw the cancellation fee into the RLA and see if the bite. Usually they don’t.

I come from the Brian Buffini school of thought that not everyone is an “A+” client. Some are “D” clients and those are not worth your time and energy because they take away from your ability to work with you better clients.

Last I checked the average cost for producing a prelim was between $99 to $200 depending upon how complex the title search is. Here in El Dorado County, it is not uncommon to have to search the chain of title all the way back to 1850. That takes quite a few man hours to accomplish. Usually the cost for those is about $1000 or more when you add up the amount of work and hours. However, the title company will not charge that to the client. They will usually eat the loss or try to make it up on the lesser complicated title searches. I know that because my last real job was a Title Officer at Chicago Title Company.

Some companies have gone to outsourcing some of their title products to India and the Phillipeans. First American and Fidelity are the first to attempt that. For the most part, that has lowered the cost of prelim production significantly, but there is still cost none the less. And, you have quality control issues to contend with.

With the amount of escrow cancellations happening many of the title companies are starting to take significant losses. First American just announced HUGE 2nd quarter losses for this year. They also announced in an Inman News article that they are laying off 1900 employees between 2nd and 3rd quarter. One of those 1900 is a good friend of mine. I have friends and family over at Chicago Title and Fidelity who have just been laid off.

So in my opinion… Not all losses are acceptable. Especially when those losses affect the lives of the average worker… Forgive me if I sound a little too passionate about this, but unfortunately I have lived though it.

You are right in say that you could lose business for charging cancellation fees, however, their comes a point where you are going to lose business anyway. Sometimes it is better to do what is necessary to cut you losses.

Realtors, as you say put our money up front and sometimes we have to walk away empty handed. It is a cost of business. Do you think the client would call you back the next time they were in need of Real Estate services if you charged them the 1st time.

I have only charged a client once and that was on a listing where I told the lady that she really shouldn’t list and she wanted to anyway. Two days after the sign went up, she spoke with her accountant and found out she shouldn’t be selling. She paid for the sign, on that one.

Frankly, I am very particular about the Listings that I take and interview the Sellers to determine their motivation. If the motivation isn’t there and the cost is no where near reasonable, I won’t take the listing.

So, in answer to her question about incorporating a fee for cancellation into a listing contract…if the agent isn’t discerning to begin with then probably so.

Thanks for bringing up a good debat.

This practice has actually been around for sometime. Prior to having my broker’s license, I worked in the title industry for about 10 years. Believe it or not, in Northern CA we used to assess cancellation fees when escrow would cancel. It wasn’t until the last real estate boom that we started seeing those go away. However, the fees were usually not so excessive. Most of the time it was under $200, which is the cost to produce a prelim. In my opinion that is an acceptable practice considering the amount of labor that goes into a title search (something that not many Realtors really appreciate). It seems that most agents think that title searches come out with a single push of a button.

So this leads me to the next question:

Do you think it would be practical for a Realtor to incorporate a cancellation fee into a listing contract? It is logical if you think about it. How many listing presentations do you attend only to find out that the sellers are just “market testers” and are not really serious about selling. What they do not realize is that we are sometimes out a couple of grand in advertising costs (for some homes that is) when we market their homes. Why not incorporate a cancellation fee to minimize the loss and weed out the non-serious sellers?

Great response on the Blue Chip…coastal buying is always good!

The San Diego real estate market is a fragmented one. Condos (especially condo conversions) in the South Bay and east end have been hit very hard. We currently have one townhome listing there that is now priced below what the seller paid for it in April, 2003.

My advice to San Diego real estate buyers? Buy blue chip (coastal location), where the rest of the world would like to live,

Love your sassy blog!

–Roberta Murphy

The chart for San Diego condo’s was overwhelming. I can assume that it would be the same in our market…location, location, location. Some will suffer more than others.

Thanks for bringing my attention to the Broker for you blog site.

I just noticed in today’s headlines that the Realtors pending home sale index fell by 12.2% for July 2007. This is a huge drop especially considering that most economists thought it would only be off by 2%.

Today I noted in a San Diego real estate broker’s blog (http://www.brokerforyou.com/brokerforyou/) an interesting post about this as well as some really eye opening statistics for the San Diego real estate market.

You definitely want to view the chart posted on August 27th showing the one year value decline for condominiums in the San Diego area. This chart shows that in one zip code, values were off by over 34.2% in just this time period. When one considers that the top of the market was actually sometime around the summer of 2005, there is a good possibility that before this is over, some real estate values could be off by 50% or more from their peak.

San Francisco attorneys