Bank Owned Properties and the Buyers Choice Act
The Buyers Choice Act (AB 956) is a new law that Governor Schwarzenegger has just signed into effect. The Buyers Choice Act prohibits a trustee or beneficiary who acquired property through foreclosure from requiring a buyer to purchase title and escrow services from a company of the sellers choice as a condition 
to receiving offers or selling the property. The law is an urgency measure and became effective immediately.
The new law applies to residential property improved by four or fewer dwelling units. The services covered by the law are title insurance and escrow services.
Penalties for the violation call for the seller to be liable to the buyer for 3 times all charges made for title insurance and escrow service. In addition, the seller who violates the law is also considered to have violated their licensing law.
The buyer can agree to accept the sellers recommendations of which title or escrow provider to use, only when a written notice of the buyers right to make an independent selection of those services is first given to the buyer and seller.
With all of the bank owned properties in South Lake Tahoe that I have sold, the seller has always requested to use their own title and escrow company. Most lenders that are selling their foreclosure properties have title and escrow companies that they deal with on a daily basis. Using these title and escrow companies repeatedly helps the banks to streamline the escrow process.
In order to get buyers to agree to using the sellers choice of title and escrow companies, sellers of bank owned properties may offer incentives such as paying for all of the CLTA policy. Some sellers may even offer to pay for the entire escrow in addition to the CLTA policy.
One thing to remember about the bank owned foreclosures in South Lake Tahoe is that many of them are receiving multiple offers. In multiple offer situations some buyers may be willing to use what ever title and escrow company the seller requests just to get an edge over another buyer!
The Buyers Choice Act is effective untill January 1, 2015 unless it is extended by the Legislature. For more information regarding foreclosures for sale in South Lake Tahoe, call Brent and Jill Johnson today!
