When you’re dealing with a Seller who is not a U.S. citizen and is considered by the government as a non-resident alien for purposes of United States income taxation,  you can avoid escrow delays and minimize the Seller’s frustrations by knowing and understanding the basic process that all Foreign Sellers have to go through when selling property in the United States.

First of all, the U.S. government will get its taxes when a property is sold, no matter who the Seller is. While you should always advise your clients to consult with their CPA or tax consultant for specific information for their transaction, the following information should lay the groundwork to let you know how unique the Foreign Sellers process can be. Hopefully with this information, and advice from the Sellers CPA, Sellers can get everything in order ahead of time to keep the escrow process on a reasonable timeline.

Apply for a SSN or Tax ID Number

Begin by checking whether the foreign seller who is transferring U.S. real estate has a Social Security number and/or Tax ID number. If they don’t, start the selling process by submitting an application for IRS Individual Taxpayer Identification Number Form W-7. Married sellers need to submit one for each spouse. The application must be notarized and include a current, certified U.S. passport. The process of obtaining a Tax ID number will take at least seven to eight weeks and the Seller should seek the guidance of a Tax consultant or CPA for the proper forms and further assistance.

Early Submission Ensures Proper Tax Withholding

Any non-resident of the US who sells real estate in the US will have 10% federal withholding as well as 3 1/3% California withholding. If the sellers do not start the Tax ID application process early, it delay any refund and/or reduction due to them.

Request a Reduction of Withholding

If your sellers feel that the 10% withholding exceeds their capital gains, they can submit a Form 8288-B Application for Withholding Certificate for Disposition by Foreign Persons of US Real Estate Interests. This document will be provided by the Escrow holder and should be submitted to the IRS requesting Reduction of Withholding upon receipt of the document. This document needs to be approved early so the Escrow holder processing the sale has time to obtain approval to submit less than the 10% U.S. withholding. This process takes several weeks as well.

In summary, it’s important to remember:

• It takes seven to eight weeks to submit IRS Individual Taxpayer Identification number Form W-7. Married sellers must submit one notarized application for each spouse with a current, certified U.S. passport.

• Any nonresident who sells U.S. real estate will have 10% federal withholding and 3 1/3% California withholding. Not having a Tax ID delays any tax refunds or reductions.

• The Seller might be able to reduce their withholding but must allocate several weeks to be approved before submitting less than the 10% U.S. withholding.

For further information and forms, seller’s should consult their CPA or tax adviser and can visit:

• IRS:  http://www.irs.gov/pub/irs-pdf/p515.pdf
• Tax ID Number: http://www.irs.gov/businesses/small/international/article/0,,id=96696,00.html
• Withholding Reduction:  http://www.irs.gov/pub/irs-pdf/f8288.pdf

Every Tuesday, here at the CV Escrow website, we post Technology Tips designed to help you, the Realtor, grow your business, keep up to date on the latest technologies, and move you forward into the new era of Real Estate.

As the internet becomes an ever increasing part of the business of selling real estate, it is important for Realtors to keep an eye on how they are being perceived on line.  With at least 84% of real estate clients using the internet (according to NAR), it is a safe bet that the people you are working with look for you on line.  I’d go as far as to say that every client you are working with Google’s you.  What do they see?

Google yourself and find out.

Google Alerts

Now that you know what is out there about you, would you like to be able to automatically keep up with what is being said about you on the internet?  Google has a simple (and free) tool called Google Alerts that let’s you monitor yourself (or anything else of interest to you) on the internet.

You can set up Google alerts so that any time your name appears on the internet, you get an email.  It’s easy.  Here is how:

1.  Go to Google Alerts:  www.google.com/alerts
2.  Fill in the Form to tell Google what you want to track:

In this example, I’m telling Google to search the internet for:

• Search Term:  My name “stacey harmon”.  VERY IMPORTANT DETAIL THAT MATTERS - You want to put your name in quotes.  This way, Google will only send you alerts when your full name appears, otherwise, it will send you an alert any time either your first name OR your last name appears on the web (and this can become very annoying).
• Type:  “Comprehensive” vs. a simple search of my name in blogs, or web pages, or videos.  Comprehensive means I want to receive an alert any time my name shows up in any of those places.
• How often:  You can choose to receive an email alert “once a day”, “once a week” or “as-it-happens”.  I’ve chosen “as-it-happens” because I want to know as soon as something is posted on the internet about me.
• Your Email:  Enter the email address you want to have the alert sent to.  It doesn’t have to be a gmail account, although if you have a gmail account, it makes it simpler to manage multiple Google alerts that you set up.

3.   Select “Create Alert” and you will see this message:

4.  Go to your email and click on the blue link after “Verify this Google Alert request” in the verification email that was sent to you:

You are now confirmed and will receive an email anytime your name (as you typed it in the Google alert) appears on the internet.

Google Alert Considerations:

• You Have a Common Name: If you have a common name, you will receive alerts anytime that your name appears on the internet and it might not be content related to you.  For example, there is a woman named Stacey Harmon Deckard who lives in Indiana.  Sometimes her name will appear on the web and I will receive an alert with information about her because my Google alert searches for the term “Stacey harmon”.
• Name Commonly Misspelled? If your name is hard to spell, or commonly misspelled, consider setting up a separate Google alert for the misspelling of your name as well.  For example, people commonly spell my name “stacy” (without the “e”) so I also have a Google alert for “Stacy Harmon” so that if people reference me in a blog and spell my name incorrectly, it will come up in my google alerts.

Google alerts are a simple and easy way to follow the conversation about yourself on line and in social media.  Go set one up today and start tracking how you appear on the web!

Interested in what you are reading? To automatically receive these Tuesday Technology Tips in your email box, subscribe to these articles at the top right corner of this site (www.CoachellaValleyEscrow.com) in the box titled “Subscribe via Email”.

Across California, as we process escrows for same-sex buyers and non-married couples over the age of 62 who are buying permanent residences or vacation homes, the topic of registered domestic partnerships arises. It’s important when choosing how to hold title to know how California law defines a Domestic Partnership, as outlined below. Buyers who meet these qualifications must register with the State of California to receive their Rights of Survivorship. Any other Domestic Partnership registration or out-of-state same-sex marriage will not be accepted by the State and can delay the escrow process.

California law states that in order to hold title as Community Property with or without  Rights of Survivorship you must be either Husband and Wife or Registered Domestic Partners. Why are Buyers interested in Rights of Survivorship? Rights of Survivorship defines co-owners as having equal possession and interest in the property, so if, for example, one of the partners were to pass away, the property simply transfers to the surviving partner.

Sometimes, same-sex couples, as well as opposite-sex couples who are not married and over 62, will begin the escrow process assuming that because they’re registered as Domestic Partners in their home state (or perhaps were married in Canada) that they qualify as Domestic Partners in California. This is false and can result in the buyers having to vest title as single persons.  It may be an option for the buyers to go through the process of registering as Domestic Partners with the State during escrow in order to hold title as community property, but this can run the risk of delaying escrow as there is time and hassle associated with appearing in court to file the appropriate papers, etc.  If buyers are aware of the facts surrounding Domestic Partnership ahead of time, they can register on their own time and save everyone involved stress and delays in order to take title as community property.

By clarifying California’s Domestic Partnership rules and regulations to your Buyers, you will help them create a lasting financial arrangement that properly and legally reflects their relationship.

To be registered Domestic Partners in California, both persons must:

• Have a common residence;
• Agree to be responsible for each other’s basic living expenses;
• Neither be married, nor a member of another domestic partnership;
• Not be related by blood;
• Be at least 18;
• a: Be members of the same sex, or
  b: If at least one is over age 62, be of opposite genders;
• File a Declaration of Domestic Partnership with the California Secretary of State wherein each partner must consent to California court jurisdiction if the couple seeks a dissolution or nullity of their relationship.

It’s also important to consider certain clarifications to these stipulations:

• Legislators limited domestic partnership for opposite-sex couples to only those where one partner is over aged 62 in order to protect benefits like Social Security.
• To be eligible for the rights and responsibilities of domestic partnership, under California law you must be registered with California’s statewide registry. The state of California does not recognize same-sex marriages performed in Canada or Domestic Partnerships registered in other states in the U.S., nor does it offer the benefits to couples registered as domestic partners by cities within California.

It is important to keep in mind that there are potential tax and other legal implications to how you take title in the purchase of property.  The implications are generally unique to the specific situation at hand and we at CV Escrow advise buyers and sellers to consult with their CPA and/or attorney for advice pertinent to their specific situation.

Every Tuesday, here at the CV Escrow website, we post Technology Tips designed to help you, the Realtor, grow your business, keep up to date on the latest technologies, and move you forward into the new era of Real Estate.

Have you ever noticed that little orange icon that appears on web pages and blogs everywhere?  (If you haven’t, after reading this post, you will – trust me!).  Are you curious what it is?  That icon is the symbol the cornerstone technology that has enabled the explosion of blogging and transformed how information is consumed in a web 2.0 world.  And, it is called RSS.  My personal journey into social media started the day I discovered RSS.  Understanding RSS is what allowed all kinds of doors to open for me in social media and the web 2.0 world.  My hope is that it will for you too.

The stage has been set for this post.  In previous weeks I have defined “blog”, and discussed in detail the concepts of web 2.0 and social media, and discussed how these pertain to real estate.  If these concepts are still new to you, it will be helpful to review my post on blogs as a basis for learning the power of RSS.

So then, what is RSS?

Most literally, RSS is an acronym for Really Simple Syndication.   But, this is such a bland definition, and one that is generally irrelevant to understanding the true meaning of RSS.   Following are 3 different (outstanding) sources who have a slightly different take on how to describe and understand RSS.  Go with the one that resonates best for you:

If you are a visual learner, here is the Common Craft video explaining RSS in plain english and points out that RSS is “like Netflix compared to the video store”:

Interested in a straightforward, practical explanation of RSS?   A great working explanation of RSS is provided by ProBlogger Darren Rowse who explains RSS as:

RSS is a technology that is being used by millions of web users around the world to keep track of their favorite websites.

In the ‘old days’ of the web to keep track of updates on a website you had to ‘bookmark’ websites in your browser and manually return to them on a regular basis to see what had been added.

The problems with bookmarking

• You as the web surfer had to do all the work
• It can get complicated when you are trying to track many websites at once
• You miss information when you forget to check your bookmarks
• You end up seeing the same information over and over again on sites that don’t update very often

RSS Changes Everything

What if you could tell a website to let you know every time that they update? In a sense, this is what RSS does for you.

RSS flips things around a little and is a technology that provides you with a method of getting relevant and up to date information sent to you for you to read in your own time. It saves you time and helps you to get the information you want quickly after it was published.

I find the ’subscription’ description helpful. It’s like subscribing to a magazine that is delivered to you periodically but instead of it coming in your physical mail box each month when the magazine is published it is delivered to your ‘RSS Reader’ every time your favorite website updates.

Let me say right up front that I’m not the most technically savvy guy going around – but even I can use RSS. At first I found it a little strange to make the change from bookmarking to RSS but I found that when I started that I just couldn’t stop.

Still a little foggy on RSS?  Here is “The Oprah Way” of explaining RSS, courtesy of Stephanie Quilao who explains RSS “The Oprah Way” in her great, non-technical post (read her full article here):

So, to make RSS much easier to understand, in Oprah speak, RSS stands for: I’m “Ready for Some Stories”. It is a way online for you to get a quick list of the latest story headlines from all your favorite websites and blogs all in one place. How cool is that?

Suppose you have 50 sites and blogs that you like to visit regularly. Going to visit each website and blog everyday could take you hours. With RSS, you can “subscribe” to a website or blog, and get “fed” all the new headlines from all of these 50 sites and blogs in one list, and see what’s going on in minutes instead of hours. What a time saver!

So, how does this all relate to real estate?

Are you interested in offering creative ways to gain more exposure for your clients?  Or maybe you are you interested in simply expanding your knowledge base of what you can do for your clients.  How about syndicating your listings information out to the internet?  Maybe you just want to stay on top of what is going on, or learn from others.  As Keller Williams Simi Valley, California agent Ted Mackel points out in the following video, these are just some of the benefits that RSS has afforded his real estate business.  Ted created this video as part of a 2008 MyTechOpinion.com contest asking for submissions from real estate folks about which technology has impacted your business the most.  Take a look:

You too can benefit from the power of RSS.  As a first step, I suggest signing up for a Google account (if you don’t already have one) and sign up for their feed reader.  Then, every time you see that RSS logo out on the web on a site that interests you, add that site to your reader.  It will open all kinds of doors for you in this internet and social media world and help you to better serve your clients as social media becomes an ever increasing part of real estate.

Interested in what you are reading? To automatically receive these Tuesday Technology Tips in your email box, subscribe to these articles at the top right corner of this site (www.CoachellaValleyEscrow.com) in the box titled “Subscribe via Email”.

For years here in California, the Lennar Charitable Housing Endowment (part of the Lennar Family of Homebuilders) has been helping the transitionally homeless – those made homeless because of domestic violence, unemployment, a catastrophic illness – by supporting charities that help people get back on their feet.

Each time a Lennar home is purchased and resold, a mandatory fee of 1/20^th of one percent of the gross sale price is collected from the Buyer and paid to the Foundation.

Our local Lennar developments include:

• The Bridge @ Jefferson
• Escena
• Esperanza @ Desert River Estates
• Cala Rosa
• Vista Serena
• La Morada
• La Quinta del Oro
• Las Plumas
• San Milan @ Paradiso
• Tapestry @ Esplanade
• Terra Lago
• Cordoba
• Marquesa

How does this affect your escrow?

If you’re working with properties from these communities, it’s important that Realtors and Buyers know that the listing is a Lennar home so they can account for this fee during their escrow transaction.

Many times the original Buyer (whom we now know as the Seller) may not remember paying the endowment when they acquired the property from Lennar. When you take a listing on a Lennar home, the Seller must disclose to the potential Buyer that paying this fee is part of selling the property and that this fee will affect the new Buyer when they go to sell the property in the future.

Who pays the fee is negotiable, except when the property is first transferred from Lennar to the purchaser when the Buyer pays on the first sale out.

It’s important to disclose the endowment on the MLS when you take the listing. The agent representing the Buyer can take advantage of line items eight or nine on page two of the Residential Purchase Contract. If you get a contract that does not address the endowment, be sure to list it on the counter offer.

As Escrow Officers, our first clue concerning this endowment would be disclosed to us only through the Preliminary Title Report. Therefore, it could take some time before we discover the issue through title. Our responsibility as escrow holders is to obtain the proper demand through Lennar and pay the endowment at closing, just as we would a Trust Deed or any Lien that encumbers.

Remembering these important points will make your escrow with a Lennar property go smoothly and successfully:

• A mandatory fee of 1/20^th of one percent of the gross sale price is paid to the Lennar Foundation each time a Lennar home is purchased and resold.
• The Seller must disclose to the potential Buyer that paying this fee is part of selling the property. This fee will affect the new Buyer when they go to sell the property in the future.
• It’s important that Realtors and Buyers know if the listing is a Lennar home so they can account for this fee during their escrow transaction.
• The Buyer’s agent can take advantage of line items eight or nine on page two of the Residential Purchase Contract. If you get a contract that does not address the endowment, list it on the counter offer.
• Our responsibility as escrow holders is to obtain the proper demand through Lennar and pay the endowment at closing.

For more information about calculating a Lennar donation, or how escrow is affected by the Lennar Charitable Housing Foundation, please visit: http://www.lchf.org/escrow_title.htm

Every Tuesday, here at the CV Escrow website, we post Technology Tips designed to help you, the Realtor, grow your business, keep up to date on the latest technologies, and move you forward into the new era of Real Estate.

This week we are going to take a look at several Realtors who are succeeding by incorporating social media and web 2.0 principles into their real estate businesses. Social media provides an array of opportunities to develop relationships with clients – for some the diversity of options can seem overwhelming. With so many opportunities to apply web 2.0 practices to your business, the following agents have been selected as examples because they exploit one strategy particularly well. The lesson is to pick and choose what works best for you. Focus. By doing so, you too can grow your business by applying social media techniques. Let’s learn from others who are leading the way!

Video

Mike Lefebvre | Hallmark Sotheby’s International Realty – Suburban Boston, Massachusetts

Particularly outstanding is Mike’s use of video on his blog…specifically, this one which he submitted to www.MyTechOpinion.com answering the question “What technology has had the most impact on your real estate business”.

• Blog

Listing Information

Kris & Steve Berg | San Diego Castles Realty – San Diego, California

Both the website and blog do an excellent job of presenting dynamic information that consumers want, particularly in regards to listing information and market trends. On the home page of both their sites, the visitor is presented with a map showing active inventory in the San Diego market and the blog has the ability to let visitors search home listings from their cell phone.

• Blog: The San Diego Home Blog
• Website: www.SanDiegoCastles.com

Networking & Niche Marketing

Andy Kaufman| Keller Williams – Berkeley, California

Andy personifies the definition of networking in a web 2.0 world…and it isn’t only the social media networking he does. Supported by an informative, data rich blog, a niche focused on the foreclosure, REO, and investment market in the East Bay of California, the real power in Andy’s strategy comes in his outstanding use of blending social media and “in real life” (IRL) interactions to network for business. Andy is everywhere – networking at conferences that draw the real estate, the social media, and/or the technology scene – events such as the REOMAC conference, the REBarCamp Conferences (Andy is the founder of this successful series of social media conferences focused on Real Estate), and SXSW (South By Southwest). The power of his networking activities has resulted in no less than 7,000 followers on Twitter and 1,100+ friends on Facebook.

• Blog: MyEastBayAgent.com

Photos

Teresa Boardman | Saint Paul Home Realty – Saint Paul, Minnesota

Photos are Teresa’s thing, and her use of the social community Flickr for her real estate business, in conjunction with her blog, is an example for all. Photos are so paramount to her web presence they not only have their own navigation section on both her blog and website, but also to warrant an entire blog of their own. She also has thousands of photos representing the St. Paul area in her Flickr account and truly gives a consumer an outstanding feel for the area.

• Blog: StPaulRealEstateBlog.com
• St. Paul, MN Photo Blog: StPaulPhotos.com
• Website: www.TwasHere.com

Active Rain:

Rich Jacobson | Windermere Real Estate – Kitsap Peninsula, Washington

Active Rain is the largest real estate social network with over 170,000 members. And, if you are a member of Active Rain, you probably know the name Rich Jacobson. He is a Community Builder there and a brilliant example of how to utilize this great resource to not only promote yourself and your business, but to learn and participate in the social media real estate community. He also expresses his personality and interests by having a blog dedicated to his personal interest in Crabbing which results in a niche marketing effort based around a Pacific Northwest activity that he loves.

• Active Rain Blog: Rich Jacobson
• Website: KitsapLife.com
• Western Washington Real Estate Blog: Sound Bite Blog
• Personal Interest Blog on Crabbing: CrabbingInTheHood.com

Consumer Focused: Clear and Effective

Kristal Kraft | The Berkshire Group Realtors – Denver, Colorado

An excellent example an agent who combines her website and blogging efforts into one site online, Kristal’s blog is simply one section of her web presence and surrounded by a website which illustrates her professionalism, market knowledge, and answers the most pressing buyer and seller questions. No one tool overpowers others in this site – its success is more about an overall strategy of providing content that consumers care about and establishing herself as the trusted adviser in the consumers mind.

• Website/Blog: KristalSellsDenver.com

Please send us who you think is doing it right in real estate and social media and we can do a follow up post in the near future!

Interested in what you are reading? To automatically receive these Tuesday Technology Tips in your email box, subscribe to these articles at the top right corner of this site (www.CoachellaValleyEscrow.com) in the box titled “Subscribe via Email”.

In a recent post, the nuts-and-bolts differences between REO (Real Estate Owned) escrows and standard escrows were discussed.  This post is designed to highlight a significant psychological difference that can help you and your clients successfully navigate the REO terrain:  patience.

For a number of reasons, the process for an REO escrow can take longer than a standard escrow:

• The Seller of an REO is a Bank or Lending Institution who may have many properties in escrow at once. This means that what may seem like a simple response to a question can take days to be considered, much less answered.

• An accepted offer or contract may take several days to be uploaded onto the Seller’s online system where it will only then be listed as a “task” to open escrow.

• Banks must follow specific, strict procedures that can take longer than a standard escrow.

• Finally, the HUD process takes approximately five days after the Buyer has signed the loan.

Realtors: Realizing these differences and delays can help you keep your Buyer calm and confident while working through an REO escrow.

Buyers: Knowing it can take longer to work through an REO escrow can help make the process much less stressful.

When all parties understand how these differences add time to the process, they can sit tight and allow the escrow officers to focus their time on processing the transaction. Ultimately, your patience can lead to a successful (and less stressful) transaction for everyone.

Every Tuesday, here at the CV Escrow website we post Technology Tips designed to help you, the Realtor, grow your business, keep up to date on the latest technologies, and move you forward into the new era of Real Estate.

Are you on Facebook? If not, and you are a sphere of influence (or social) farmer, you probably should be. Facebook is a Web 2.0 site that is one of the greatest ways for Realtors to create a social networking strategy. Facebook currently has over 175 million users and makes it so easy to connect with people you already know from all parts of your life. It is a great way to let those who already know you, what you are currently up to (for example, that you are a Realtor and have a particular expertise in real estate in the Coachella Valley – think of the potential for referrals!). Find and connect with friends from high school, college, your company, or others in the industry, like CV Escrow. CV Escrow has a new “fan page” (Facebook terminology). By becoming a fan of CV Escrow on Facebook, you have an easy way to stay connected to all of the training and event opportunities that we offer and support. In addition, by connecting with CV Escrow on our fan page, you have a way to subtly remind your other Facebook friends that you are in real estate, as they will see you interacting with other professional organizations in the industry. So become a fan! Here is how:

Step 1:

Login to Facebook. (If you aren’t yet on Facebook, it is easy to create an account. Simply fill in the Sign Up section on the homepage and follow the directions to get started)

Step 2:

Search for “CV Escrow” in the Search box in the upper right hand corner of the Facebook screen .

You will get this as your search result:

Step 3:

Click “Become a Fan”

That is it! Once you click “Become a Fan” the wording will change to “You are a Fan” and you will be connected to CV Escrow on Facebook.

Step 4:

Check out our fan page. You can now click “View Page” and see the details of the CV Escrow fan page where we will keep current all of our training opportunities (stay tuned…a training session on Facebook for Realtors is coming soon!) and you can keep up with the latest events and announcements from CV Escrow. You can even send us a message on our fan page.

Just another great way to build your social network and establish yourself as a working Realtor who is keeping up with the latest trends and opportunities in the industry. We look forward to seeing you on our fan page!

Interested in what you are reading? To automatically receive these Tuesday Technology Tips in your email box, subscribe to these articles at the top right corner of this site (www.CoachellaValleyEscrow.com) in the box titled “Subscribe via Email”.

I am lucky enough to announce that a long-time representative of the escrow industry in the Coachella Valley, Joyce “Ms Dixie” Cooper, has decided to join us at CV Escrow.  Her assistant for the past ten years, Lois King, will also be joining our team.

From her first job out of high school in an escrow office, to owning and operating Dixie Escrow here in the Coachella Valley since the 1980s, Joyce has been helping buyers and sellers fulfill their real estate dreams for over 40 years. She believes, as all of us do here at CV Escrow, that the key to successful transactions is the knowledgeable, warm people who give everything a personal touch.

During her time in the industry, Joyce has helped perpetuate the high standards of our field as a Certified Senior Escrow Officer, a Director for the CEA (California Escrow Association), a three-time president of the Desert Escrow Association and an escrow instructor at both the College of the Desert and the Desert Cities Real Estate School.

Joyce’s sweet demeanor and drive to help people extends beyond her work in escrow and into the greater Coachella Valley community where she’s active in her church and the Soroptomists. We’re proud to have Joyce and Lois’s expertise and years of experience here at CV Escrow and ask that you please join me in welcoming them to our team!

Joyce Cooper
Escrow Officer
Phone:  760.568.2521
Email:  jcooper@coachellavalleyescrow.com