Tag: Colorado Division of Real Estate

Have You Wondered About 72Sold? It’s Not Licensed as a Real Estate Brokerage in Colorado

Perhaps, like me, you have wondered about 72Sold, which runs commercials every night on local TV stations, giving the impression that it is a Colorado real estate brokerage, and directing you to www.72Sold.com, which gives the same impression.

In researching this company, the first thing I did was to look on REcolorado.com, the Denver MLS, to see how many listings they have sold. The answer was none, because 72Sold is not a member of the MLS and is not even licensed in Colorado to sell real estate.

So what’s the story? First I asked Marcia Waters, director of the Colorado Division of Real Estate, who confirmed that 72Sold is not licensed in Colorado, and said the division has not received any complaints about them — which makes sense, since one can only file a complaint against a licensed brokerage.

My suspicions about 72Sold were raised further as I scanned the company’s website, which contains numerous testimonials and the following graphic, which has no identification of, or links to, the “five independent studies” cited in it:

To learn more, I posed as a potential seller and requested a valuation on 72Sold’s website, which uses such terminology as “a better way to sell your home.” That sure sounds like a brokerage, doesn’t it?

Registering my name and a home address on their website resulted in a call from a woman who said she was from 72Sold but who, under questioning, said she was actually with Your Castle Realty, a non-Realtor brokerage. So as not to blow my cover, I used the excuse that I only wanted to work with a Realtor, and she offered to have an agent from Keller Williams call me.

Susan Thayer, co-owner with her husband of Keller Williams Action Realty in Castle Rock, was the agent who called me next. I revealed to her that I was actually a Realtor myself writing this real estate column. I explained that posing as a seller on 72Sold’s website was the only way I could find out what was really behind all those TV commercials.

Susan was quite open and helpful and sent me links with background information, including an Inman News article about 72Sold’s partnership with Keller Williams and its many franchises.

Like 72Sold’s website, the Inman story conflated the roles of a lead generating company and a real estate brokerage, reporting, for example, that 72Sold had grown from 10 agents to 426 agents (as of August 2022), when in fact they only have licensed agents in Arizona, where they are a licensed brokerage.  Everywhere else, as I understand it, they have what should be called “referral partners” instead of agents.

What 72Sold does is invest 80% of its referral fee income (according to the Inman story) into more TV advertising in those markets where it has referral partners, and some of that expense is apparently shared by those referral partners, although I didn’t garner any specific numbers.

What 72Sold offers through its referral partners is a strategy of combining a 7-day coming soon period with a Friday-to-Sunday active period during which buyers’ agents may show the home for 15 minutes on Saturday, according to the Inman article. The idea is to create a buyer frenzy and “fear of loss.” With the slowing of the market, that strategy has softened. It sounds great to sellers, however, making the leads generated well worth 72Sold’s referral fee.

Click on the thumbnail below to watch a video from 72Sold’s home page. Judge for yourself whether they are posing as a brokerage in Colorado, where you just watched their TV ad.

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PS: It is a violation of the Realtor Code of Ethics for a member to misrepresent himself or his level of success, but neither Greg Hague nor his Arizona brokerage is a member of the National Association of Realtors, and therefore neither is bound to the Code of Ethics.

The New Sellers Property Disclosure Is a Great Improvement

Every few years, the Division of Real Estate releases a revised Sellers Property Disclosure to be used by real estate brokers. A forms committee suggests revisions which then must be approved by the Colorado Real Estate Commission.

I wasn’t a big fan of the version which was released in 2018, but I’m a big fan of the one which is mandatory beginning on January 1, 2023. There are disclosures for each type of property. In this blog post, I’ll only talk about changes to the one for residential listings. Here’s a link to it, which you will need to download to scroll through it.

Some of the changes are subtle — for example, the seller is told to disclosure adverse materials facts instead of defects. That makes sense, since there was no definition of “defect” in the 2018 version.

Other changes are more substantive. For example, instead of just asking if the property is in an HOA, it asks for the name of the association(s) and contact information for each. If the neighborhood has cluster mailboxes, it asks for the location and number of the mailbox.

At the top of the form, it asks when the seller acquired the property, not only the year it was built as in the 2018 form. It also asks the seller to attach any reports, receipts or other documents “you believe necessary for the information you provide to be complete.” There was no such request in the prior version.

The seller is asked whether the home is subject to deed restrictions or affordable housing restrictions, and whether it is in a historic district. This is new.

Another sign of the times is that instead of asking if there is or has been tobacco smoke, it refers only to “smoking” and adds in parentheses “including in garages, unfinished space, or detached buildings.”

Under “Access and Parking,” the form asks if there are any limitations on parking or access due to size, number and type of vehicles. Instead of asking if there are “any access problems,” it asks the broader question of whether there are “access problems, issues or concerns.” Those three words are used elsewhere to expand on the question of “problems.”

In the section on “Use, zoning and legal issues,” instead of asking simply whether any additions or alterations have been made, it specifies whether they were made with a building permit and without a building permit, including “non-aesthetic alterations,” which is undefined. It also asks whether the property has been used for short-term rentals in the past year and whether there are “grandfathered conditions or uses.”

Under “Sewer,” the form asks for the name of the sewer service provider, the date of the last sewer scope, the date of the last septic use permit, inspection, and pumping — all useful information.

In the “Water” section, the form asks for the location of the water shutoff.  If there’s a well, it asks the date of the last inspection and service.  It asks the gallons per minute (GPM) of the well as of a specified date, and it asks the size in gallons of any cistern. Lastly, it asks whether the seller purchased any supplemental water in the last two years — an indication of the well’s adequacy.

The form asks the seller to identify the electricity, cable TV and internet service providers.

The instructor of the class I took regarding these new contracts and disclosures reminded us that the sellers property disclosure is to be accurate as of the date the home goes under contract. Therefore, if the property goes under contract after Dec. 31, 2022, this new form must be completed by the seller, but it does not need to be replaced if the listing is already pending but does not close until 2023.

That led me to adopt a new “best practice” which I’ll share here with my fellow listing agents. Instead of having the seller complete and sign the sellers property disclosure when I list the home, my practice henceforth will be to have the seller complete the document at the time of listing but to review and sign it only after going under contract with a buyer, thereby assuring that it is accurate as of the purchase contract date, as stated on the disclosure.

Division of Real Estate Warns Homeowners About ‘Equity Skimming’ Schemes

By now, we should all be wary of people offering to “help” us financially, usually via the internet or email, but also by phone.  As the saying goes, “If it sounds too good to be true, it probably is.”

Last week the Colorado Division of Real Estate (DRE) issued a warning about scammers cheating homeowners out of their home’s equity on the pretext of helping them pay HOA liens on their home.

Yes, an HOA can place a lien on your home for failing to pay your HOA assessments or fines, and an HOA lien takes priority even over the lien of your mortgage lender.

It is possible for an HOA to foreclose on your $600,000 home because of unpaid dues or fines, no matter how small. But if you can’t pay, what do you do? Those liens and subsequent foreclosure actions become public records, making you an easy-to-find target for a scammer wanting to “help” you.

Here’s a link to the full DRE warning. It describes several scamming scenarios. According to the DRE’s warning, those scenarios “can leave a homeowner losing their property, becoming a renter in their own home, having their credit rating severely damaged, and having the possibility that the lender may pursue a deficiency judgment against them if the property is foreclosed upon, as well as the HOA pursuing a personal judgment against them for unpaid HOA dues.”

Homeowners are urged to look for the following red flags:

>  Anyone wanting you to act fast with a quick-fix to your financial difficulties.

>  Promises to resolve your financial problems and to leave your cares behind.

>  Someone wanting you to transfer your ownership in the property to them.

>  Anyone asking you to sign a power of attorney for them to act on your behalf.

> Proposing that you’ll be a tenant in the home that you now own.

>  Someone telling you that there is no need to consult with an attorney, accountant, real estate broker, lender or anyone else.

Feel free to contact me if you find yourself in this or a similar situation. My intention is not to convince you to list your home with me. I just want to give you my own layman’s feedback on what others may have told you, and I can, if appropriate, refer you to a trusted real estate attorney. First, however, read that DRE warning, which has lots of useful information and links for reporting suspected scams or getting other advice.

And, as I like to say, remember that “Google is your friend.”  When contacted by someone you suspect could be a scammer, do a web search for the person and/or company and/or email address and/or phone number. Also, we have a special app called “Forewarn,” only available to licensed Realtors like myself, where I can instantly search by name or phone number. My broker associates and I use that app to check out people who want to do business with us, instantly learning their age, properties owned, bankruptcies or liens, criminal charges, and even cars they own.  I’m happy to do such a search for you, too.

Lastly, I’d like to put in a good word for my cell carrier, T-Mobile.  My previous cell carrier was AT&T, which didn’t provide Caller ID on people not in my contact list, but I do get Caller ID with T-Mobile. If a number does not have a name associated with it, I let it go into voice-mail, and those callers rarely leave a message, suggesting, I believe, that it was a “spoofed” number by a solicitor or scammer. Thank you, T-Mobile! I’m wasting a lot less time than I used to on answering unwanted calls.