The highest score you can get is 70 points. YOUR SCORE = ______POINTS
NOW…. IF YOU INSIST ON AN “ Asking price” FOR THE house THAT is 10% or more over CURRENT market value- THEN Delete all the above points.
YOU HAVE JUST LOST YOUR MARKET ADVANTAGE!
Salability Scorecard for SellersPart Two
Circle the minus number for each defect. Be brutally honest.
The numbers correspond to the percentage of prospective buyers that would likely be negatively influenced by this “defect”. A -20% means 20% of buyers would likely eliminate your home from consideration. A -90% means 90% of buyers would be less likely to want to buy the house.
Pet urine smells and spots on the floor or stale tobacco odors -90%
The neighborhood looks horribly junky and derelict -80%
Dark inside unless you turn on lights and open curtains -80%
The property is located outside the security gates (if PML) -70%
Wall paper or wood paneling on most walls -60%
Furniture is worn or outdated -60%
The property is located on a busy road with traffic noise -50%
The property has a steep driveway or poor back-up space -50%
Roof is old, leaky, wood shake, curling, obviously a mess -50%
The deck is rotting, shaky, and full of fungus -50%
House has bad heating system or none, single pane windows,
old fireplace -not energy efficient -50%
Leaves, pine needles on driveway, decks, stairs and walkways
that make people fear they will slip and fall -50%
The closets, garage and storage areas are crammed with stuff -20%
Well, did you eliminate every possible buyer? Not really.....
… IF YOU PRICE THE HOUSE UNDER THE MARKET VALUE ENOUGH TO COMPENSATE FOR ALL DEFECTS, YOU HAVE JUST GAINED MARKET ADVANTAGE! IT MAY ACTUALLY SELL QUICKLY, BECAUSE THE REMAINING PERCENTAGE OF BUYERS ARE LOOKING FOR A LOW-PRICED FIXER-UPPER!
A true story to illustrate the importance of inspections and disclosures
January 2006, Pine Mountain Lake
House has been in escrow two weeks.
The home inspector hired by the buyer writes in his report:
“Water is entering the foundation and substructure from the faulty grade at the back of the house. Dry rot and damage was noted.
Water turned off so couldn’t test for leaks.”
The buyer’s agent wrote to the seller’s agent:
“On Monday the buyer’s were informed by their insurance company that there have been previous claims for water damage on this house.
This was NOT disclosed to us. Now in order to obtain insurance, we must have the inspector return when the water is on and pay extra to have this re-inspected.
The insurance company wants to know the source of the water damage. If it happens again, they will be paying the cleanup bill.
Attached is a copy of the Home Inspection report. There were a few surprises which raised concerns.”
Imagine yourself as the seller in this deal. Are you a little worried? Have you been packing, maybe already purchased another house? Now what?
The letter goes on: “The buyers made an offer on the house knowing about the old roof and the potential smaller repairs. But the fungus-damaged deck and possible water damage was not anticipated. We now also have electrical hazards, new gutters, water heater replacement, extensive deck repairs, and grading of the back hill against the house; about $20,000 worth.”
Uh oh, it sounds like money being emptied out of a pocket. Whose pocket?
“The buyers are asking for a credit of $7,000. They are willing to take on the balance of the cost of the repairs.”
Whew, that’s no so bad. It could have been a lot worse. Thank goodness this was a motivated buyer who wasn’t afraid of doing repairs. Many buyers would have backed out and the house would be back on the market. Then you must disclose all the problems and probably drop the price in a flat market. Meanwhile, agents and buyers want to know why the house has been so long on the market and why the previous deal fell through. But the house sold. The seller had paid $95,000 for the house in 2001. 4 ½ years later they sold it for $319,500, an increase of $50,000 per year.
Originally written October 2006, updated October 2007
A Changed Market Calls For Innovative Marketing
Every minute the real estate market changes. Every minute buyers decide “to buy…or not to buy” based on interest rates, equity in their present home, what their neighbor says, what the newspaper headlines are, what their stock portfolio is doing, and whether they thinks prices will go down or up.
It is our job as real estate professionals to stay on top of these changes and adjust our advertising to track with trends. That’s what this article is about.
The tendency right now is to wait to buy. The quantity of California home sales is roughly 25% less than 2005. Prices that continued to go UP in spring of 2006 are now static, and expected to trend downward as inventory piles up.
The change in the market is due more to “herd following” than real economic fundamentals.
We listened Friday (Oct ’06) to California Association of Realtors Chief Deputy Economist, Dr. Robert Kleinhenz, go over the statistics. The economy is strong, unemployment is low, mortgage interest rates are expected to stay around 6% through 2006 (and did in 2007 also), and our growing population needs more housing. The median California home price has gone from $235,000 in January 2000 to $560,000 in May of 2006. During that time we all wondered “when will it end?” Now we know. It has ended.
Dr. Kleinhenz says the price appreciation party continued at least a year longer because of “innovative” loan products, like “interest only” and other exotic dollar-stretching mortgages (we didn’t see many of these in Groveland since we deal with mostly equity-rich Baby Boomers).
With all those lenient mortgages, we expected foreclosures to start soaring, like in the mid-90’s. Not so, says our economist. The economy is too strong, and the likelihood of a recession is very slim. ( California foreclosures in Fall 2007 are starting to mount up, but not many in Groveland).
So what’s causing the slowdown in sales volume? Three things:
AFFORDABILITY The prices simply got too high for first-time buyers, who always help second and third-time buyers move up the ladder.
INTEREST RATE EXPECTATIONS When rates were at 5.25% in 2005, an increase to 6.5% (June 2006) on a 30-year loan seems ominous.
MARKET PSYCHOLOGY Buyers like certainty. When there’s mass uncertainty about whether prices will keep going up, they wait. I heard it a lot this year. “We don’t want to buy at the peak of the market”, that is, we don’t want to be suckers, and we have been told prices will start coming down. It becomes a self-fulfilling prophecy.
UPDATE October 2007 California Association of Realtors Report: The median home price in California will decline 4 percent to $553,000 in 2008 compared with a projected median of $576,000 in 2007, while sales for 2008 are projected to decrease 9 percent to 334,500 units, compared with 367,500 units (projected) in 2007. “Tighter credit standards, affordability concerns, and a continued standoff between buyers and sellers will contribute to continued weakness in the market going into next year,” said C.A.R. President Colleen Badagliacco. “Now is not the time for homeowners to ‘test the waters’ – only serious sellers should put their homes on the market in what will continue to be a challenging sales environment. Sales could decline more steeply in 2008 if the current liquidity crunch in the mortgage markets has a longer-than-expected duration or if interest rates unexpectedly increase,” she said.
Our goal at RE/MAX is to sell your house. Having 100 listings doesn’t do anybody any good if they aren’t selling. Once the house is priced right, and looks lovely, and has inspections to reduce surprises, what next? Of course, we put it on the Multiple Listing Service, put extra photos on Realtor.com, feature it on our websites, present it in the Pine Mountain Lake News, and the local Yosemite Highway Herald. But we have to go a step beyond, and that is to find every reason to reassure buyers that a purchase now is a good move.And we have to do it honestly.
Advertising in the 1990’s
First, a little history. In 1997, I wrote an “Advertising Overview” for our recession-weary sellers. “If someone has never heard of Pine Mountain Lake, how do we get them up here to buy? These are some of the ways…” Then I proceeded to list and describe what worked and what didn’t. Remember, this was written before the internet had much impact.
What worked in 1997 that we don’t use, or doesn’t exist any more?
24 Hour Telephone Information Hotline, Northern California RE/MAX magazine, PML Buyers and Visitors Guide, 64 sq ft billboard in Chinese Camp (was vandalized by chainsaw), Highway 120 Litter Pick Up signs East of town, Groveland Map and Business Directory (this is now a Chamber of Commerce product), Sunset and Via magazines (very expensive), Bay Area Parent, Private Pilot magazine.
The 1997 list of what worked that we still use:
Multiple Listing Service, websites, RE/MAX International Referral Directory, Tuolumne County Visitors Guide, Yosemite Highway Herald
And what didn’t work in 1997:
Newspapers:
Wall Street Journal, San Francisco Chronicle, Union Democrat
Magazines:
Unique Homes, Golf Today, Sierra Seasons, Senior Magazine, Inflight, Aviator’s Hotline, Harbinger, Vine Times, Yosemite Guardian, Central Valley Homes Tour, Homes and Land (of Contra Costa County), Travel Holiday, Jewish Bulletin, Movie News Guide
Other:
RSVP color Card Decks mailed in San Jose, billboard at the ballpark.
Starting in 2000 the market was so busy we didn’t need to spend a lot of money out-of area to attract buyers. Only on unique or high-end properties was it necessary. Advertising was geared more to sellers than buyers. About 95% of our listings sold.
2006 RE/MAX Yosemite Gold Advertising
Internet (also see How do You Find Your House on the Internet?) for a complete guide
Go to www.Realtor.com and enter the 95321 zip code. Now look at any of the properties. Notice that some of the property descriptions have custom text, 6 to 25 pictures instead of just one, a scrolling text, a headline, and a link to the agent’s website. To create those “Enhanced Listings” on Realtor.com costs extra every year, and the RE/MAX agents are enhancing their listings. This is money well-spent.
You can now see almost all the listings in the United States by going to www.remax.com and without wading through all the annoying ads on realtor.com.
All four of our websites rank high in the search engines and generate good leads. This is partly due to strong content, and partly to the efforts of the web hosts (Escapia, Realigent and Z-57). Our office website is www.pinemtnlake.com. We paid an outside vendor to create Virtual Tours on quite a few of our listings in the last year, but found that it did not lead to showings or sales any more than houses with no Virtual Tours. We switched instead to detailed full-color flyers that we create ourselves and put as PDF files on our office website.
We purchased three new domain names that are re-directed to PineMtnLake.com:
REMAX-Yosemite-Gold-Real-Estate-Groveland-California.com
PineMountainLakeVacationHomes.com
GrovelandCaliforniaRealEstate.com (Did you know that there are four other Grovelands in the USA: Florida, Illinois, and Massachusetts?)
Our agent websites are www.lauree.com and www.ecarlson.com. Ann and Constance are working on creating individual websites, which will add to our exposure.
The vacation rental website is www.YosemiteGoldVacations.com. In 2006 and 2007 we spent extra on GoogleAdWords and MSN links and this was very successful in generating reservations. Our vacation rental department also generates potential buyers. Many of our guests eventually buy their own home or lot.
Institutional Print Ads
These focus on our area or the company, not specific properties. This year we used:
Union Democrat annual Gold Country Recreation Guide, distributed throughout the area.
SBC Yellow Pages. For 2007 we have gone full color.
Yosemite Chamber of Commerce color folded Map and Service Directory, and website listing on Groveland.org.
Yosemite Pines RV Park map, distributed to all of their campers-done in 2006-discontinued in 2007
Union Democrat Know It All Annual Guide Ad with pictures of all four agents, picture of Pine Mountain Lake, toll-free number and website, in color. Distributed to all subscribers of the Union Democrat and in local businesses.
GAINS Service directory, distributed locally.
These ads are geared more to vacation rentals:
Golf Show Shiner $1800 this year for rotating color ad at PML Golf Shop.
Tuolumne County Visitors Guide Inside front cover with other Groveland businesses. About 90,000 copies distributed all over California and at Visitors Bureau in Sonora.
When we advertise our website addresses in print ads we know we will get a lot of inquiries that we cannot trace to the print ad. They don’t call and say “I’m looking at your ad in the newspaper”. They call us, or go on the web and send us an e-mail.
Our company sends $6,060 per year to RE/MAX of California which they use to promote the franchise throughout the state.
Specific Property Ads
Yosemite Highway Herald : one page in color on the back of the first section of the newspaper. We usually put new listings here with multiple color photos of the inside and outside. This is a good way to showcase houses and acreage to local buyers. It is mailed to everyone with a Groveland, Big Oak Flat, Greeley Hill, Coulterville and LaGrange address.
Pine Mountain Lake News : two pages in color inside the paper.
We reduced the text in the summer of 2006 to increase the impact of the color. We would prefer to reduce this cost significantly since it does NOT sell houses, it just looks good to sellers. Unfortunately, when we have reduced the size of the ad or gone to black and white, some people have wondered if there is “something wrong” with our company!?
Bright Future Homes, a new magazine. Quarter-page color ad and we got no calls, either with a low priced home or a high priced home.
The Parade of Homes, or open houses, on the Saturday before Memorial Day, is heavily advertised by our Hetch Hetchy Association of Realtors. This is an annual event started in 1996 with 30 selected homes. At the first three “Parades” we offered $1,000 closing cost bonuses to buyers. The “Parades” only became really effective between 2000 and 2004, when buyers were hungry for real estate. They now allow every house to be on parade so 130 homes were open in 2006. Two sold in 2006: 4-579 And 15-5. In 2007 not ONE house sale was traced to the Parade of Homes, and 133 houses were open on that day, May 26,2007.
Modesto Bee Saturday Valley Homes Magazine. Once a month they do Sierra properties, and we tried this. Ads were scattered throughout the magazine in several sections with no special effort to group or even identify the area of the houses. We were disappointed.
RE/MAX agents who pay for their own advertising get all the leads from those ads, unlike most companies that route the ad calls to whoever is “on the floor” that day. So our agents have tried the following advertising:
Livermore Monthly Advertiser-lots of leads, one sale
Equestrian Magazine, Northern California-too soon to tell
Postcards about new listings and recent sales sent to neighbors
Vanguard, a Bay Area newspaper that goes to police and firemen.
Other Marketing
In other areas agents rely heavily on FOR SALE signs and OPEN HOUSES.
We can’t use signs in PML as per our 1996 agreement with PMLA.
Open Houses mainly attract neighbors and people who already own other houses in PML and want to change locations or upgrade. We can’t effectively advertise open houses in the monthly local papers. Readers in Sonora and Modesto rarely are attracted by Groveland open houses. Security Gates effectively limit access. Some houses get no visitors. Houses on the busier streets get a few lookers. We did have one house on Clements Road get an offer as a result of an open house.
I believe we have to beef up our internet presence and responses, try advertising in markets where the market is still strong (like San Mateo and San Francisco), and use innovative headlines backed by solid information to convince people to buy.
Suggested Headlines
BUY A HOUSE AT 2004 PRICES WITH 2006 STOCK PROFITS
IT’S NOT THE PEAK ANY MORE – WHY NOW IS A GOOD TIME TO INVEST IN REAL ESTATE
SEE PINE MOUNTAIN LAKE AND GET A FREE LUNCH
SWAP YOUR CITY RENTAL FOR A COUNTRY CABIN AND PAY NO CAPITAL GAINS
TAKE THE MONEY AND RUN – HOW A 1031 TAX EXCHANGE CAN PUT YOU IN YOUR MOUNTAIN DREAM HOME FOR ALMOST NOTHING
Future Options to Investigate:
The biggest networking site: MySpace, and others specifically geared to real estte professionals: WannaNetwork and Active Rain Real Estate.
E-Bay and Craigs List, which in the past suffered from not enough real estate selection to attract serious seb searchers, but may be worth a try now.
Auctions
Here’s a summary of the results of the 7 th Annual California Association of REALTORS® (C.A.R.) Internet Versus Traditional Buyers Survey:
- The typical buyer is now an Internet buyer. Homebuyers who used the Internet as an integral part of the home buying process increased significantly from 28 percent of all buyers in year 2000 to 70 percent in 2006, as high-speed Internet access became increasingly popular. (close to 80% in 2007)
- Home buyers considered the internet an information resource rather than a substitute for a real estate agent. Nine of ten homebuyers hired an agent to assist in the home buying process.
- Internet buyers devoted more time researching on their own before meeting with an agent compared to traditional buyers, but they spent less time working with an agent, during which they viewed significantly fewer homes before making a purchase.
- Buyers reported that the Internet provided a greater sense of control, especially with real estate Web sites becoming more consumer-friendly. More than nine of ten Internet buyers indicated that the Internet helped them better understand the home buying process and put them in more control of that process.
- The Internet played a more important role in the home buying process for first-time buyers and Gen Xers than repeat buyers and Baby Boomers.
- In the future, agents who want to maintain their competitive edge will need to become familiar with the ever growing array of online consumer home buying tools, broaden their online presence, and enhance their communication with clients through the use of the latest Web trends.
Do I need to hire an appraiser to determine the value?
Should we sell it with the furniture?
Should we do any remodeling first to get a higher price?
What do I have to disclose?
What should I do to get my house ready to show well?
Will we as sellers be represented fairly by a dual agent?
If the market is slow, should we just rent it for a while?
How much capital gains tax will I pay?
What kind of properties qualify for deferred capital gains under a 1031 exchange?
I just found out that California takes 3.33% of my gross sales price at closing as their “estimate” of my capital gain. Are there exemptions or alternatives to that?
Do other real estate companies in town show your listings?
Is your commission negotiable?
How many months is the typical listing agreement for?
What happens if my Realtor is out of town, or ill?
What if we can’t find a place to move to after we are in escrow?
What if I change my mind about selling it?
Do I have to buy title insurance, or is there a way around it?
Why should I list with a RE/MAX Realtor? Why you?
Your RE/MAX Realtor can explain the answers…Ask away!
- Community Property with Right of Survivorship may be a better way to take title than joint tenancy, regular community property, or even a trust?
- There’s really no such thing as an AS IS sale in California?
- A buyer can try to force you to sell to them by filing a lawsuit, filing a lis pendens notice, and making it nearly impossible to sell to anyone else?
- Groveland and Big Oak Flat are in different climate zones for California’s energy standards for construction?
- In 2004 the feds closed a loophole that would allow you to convert property you acquired as a rental in a 1031 tax-deferred exchange into your primary residence, then sell it two years later and pay no capital gains tax. NOW you have to have owned that house for 5 years before you can sell it as your primary residence.
- Damage to decks from fungus is responsible for several times the costs of repairs from termite damage in real estate sales in Groveland.
- The Pine Mountain Lake Country Club was originally going to be located at the Lake Lodge beach?
- Sellers and agents have to disclose that a house within 300 feet of a GCSD sewer line may have to hook up to the sewer if they have to repair or add on to their septic system?
- Over the last ten years, the real estate agents at RE/MAX Yosemite Gold have on average sold 3 or 4 times more real estate than the average of other agents in Groveland?
Arbitration is a method of dispute resolution by which parties to a dispute: (1) select a neutral person(s) to consider the merits of the conflict, (2) present evidence to the neutral person(s) to support their positions and (3) agree to abide by the decision of the neutral person(s) rather than seek redress in a court of law.
What are some of the advantages of arbitration?
- An arbitration will almost always be resolved in a more timely fashion than a court action.
- Attorney fees are usually lower than in litigation because less time is needed to resolve the claim and the procedural and evidentiary rules in arbitration are less burdensome.
- Arbitrations are private. Accordingly, sensitive information should not be widely disseminated because the hearing is not open to the public.
- Arbitrators, who are selected by the disputants, are usually experienced in the field of the dispute. The necessity of educating the decision-maker in the area is substantially reduced and the parties should feel comfortable that the award was made by a knowledgeable person.
- Arbitration awards are final, binding and legally enforceable.
What can be considered a disadvantage of arbitration?
- There is only a limited right of review of an arbitration award.
- If a party fails to comply with the award, then court action is needed to enforce it.
- The parties must pay for the services of the arbitrator.
Are there different types of arbitrations?
Yes. The obligation to arbitrate may be created contractually or judicially. Contractual arbitration exists when parties enter into an agreement to arbitrate a current dispute or any dispute which may arise in the future. Judicial arbitration exists when parties without a contractual arbitration provision are required to arbitrate pursuant to court order.
Thus, there are situations in which the obligation to arbitrate is voluntarily agreed to by the parties, such as the agreement REALTORS ® make, pursuant to the N.A.R. Code of Ethics, to submit disputes with other REALTORS ® to Board/Interboard arbitration, and situations in which arbitration is imposed involuntarily upon the parties, for example, through judicial arbitration in the course of a lawsuit.
Arbitration may be binding or non-binding. In binding arbitration, the participants are required to comply with the decision of the arbitrator(s) which is final and usually not appealable. In non-binding arbitration, the decision of the arbitrator(s) is advisory only. Some arbitrations are formal proceedings which require compliance with discovery, evidentiary and procedural rules similar to a trial in a court of law, while others may be informal.
Arbitrations can be decided by one or more arbitrators depending upon such factors as the arbitration agreement, the type of claim, the dollar amount of the dispute and the rules controlling the arbitration.
The arbitration clause found in the California Association of Realtors contracts is an example of contractual, binding arbitration in which evidentiary and procedural rules are relatively informal, but the parties are granted pre-hearing discovery rights.
What are some examples of these different types of arbitrations?
|
|
Features of C.A.R. Purchase Agreement Clause |
Contractual |
Yes, by initialing the optional arbitration clause in a contract. |
Voluntary |
Yes. Participants have no obligation to enter into a contract containing an arbitration provision. |
Binding |
Yes. |
Pre-Hearing Discovery |
Yes. |
Formal Evidentiary Rules |
No. |
Formal Procedural Rules |
No. |
Number of Arbitrators |
Usually one. |
How do I file for arbitration?
Arbitration may be commenced by submitting the following to the arbitrator or the organization administering the arbitration:
- Signed copies of the written agreement to arbitrate;
- Identification of the parties to the dispute;
- A statement of the subject matter of the dispute and the amount of money involved;
- The remedy sought; and
- Any applicable administrative fee.
Who can administer an arbitration?
Any individual or any organizational entity may administer an arbitration.
In recent years many individuals and organizations have entered the arena of providing arbitration services. One source of locating these arbitration providers is your local phone directory. A county or local bar association (association for attorneys) may be able to supply you with a list of providers.
Who can serve as an arbitrator? Is formal training required?
Any individual can serve as an arbitrator. While there are no California laws specifying minimum qualifications or training of arbitrators, certain organizations may have their own set of qualifications and should be contacted directly for that information.
If the parties cannot agree on an arbitrator and one has to be appointed, the arbitrator must be a retired judge or justice, in the case of a C.A.R. deposit receipt dispute. In the case of a C.A.R. listing agreement dispute, the arbitrator may also be an attorney with at least five years of residential real estate experience.
How much does it cost to file for arbitration?
The cost of an arbitration varies depending on who is conducting the arbitration.
Do I have the right to have my case in an arbitration decided by a jury or an active judge?
No. In an arbitration, the dispute will be heard by a single arbitrator or, in some instances, a panel of three arbitrators. The arbitrator(s) will not be active judge(s). There will not be a jury.
Will a trial be held in arbitration?
No. A trial takes place in a court of law where evidence is presented to a judge or jury in accordance with specific rules and formal procedures. In arbitration, by comparison, a HEARING will be held in which evidence will be presented to the arbitrator. Neither the arbitrator nor the disputants are bound by any formal rules of court other than those previously agreed upon or ordered by the arbitrator.
What is discovery?
Discovery is the legal term describing information gathering through written questions, verbal testimony and presentation and inspection of documents and other evidence.
Do I have the right to conduct discovery in an arbitration?
Yes, if the arbitration provision allows for "discovery." The arbitration clause in the C.A.R. contracts grants these rights to the disputants by incorporating discovery rights pursuant to California Code of Civil Procedure Section 1283.05.
Can I subpoena witnesses to appear at an arbitration or can the opposing party be required to produce relevant documents prior to or at a hearing?
Yes. These rights are granted. Subpoenas which are issued and signed by the arbitrator, but otherwise blank, are to be completed and served by the requesting party.
What if the opposing party does not comply with a discovery request?
The arbitrator has the power to order discovery and impose the same liabilities, sanctions and penalties as a court of law except an order of contempt which could result in arrest or imprisonment.
Are formal rules of evidence used in the arbitration hearing?
No. The arbitrator alone determines the admissibility, relevance and materiality of evidence offered. Conformity with the technical judicial rules of evidence is NOT required. The arbitrator must, nevertheless, comply with basic concepts of due process, treat all parties fairly and admit all relevant testimony and evidence.
Am I entitled to have an attorney present at the hearing?
Yes. California law allows any party to be represented by counsel. Additionally, you may be allowed to be represented by someone other than legal counsel if the arbitrator or administering organization allows it.
Are attorney's fees recoverable in arbitration?
As a general rule, attorney's fees are not recoverable unless a contract term provides for recovery of such fees. All the C.A.R. forms containing the arbitration clause provide for recovery of attorney's fees to the prevailing party in ANY action or proceeding or arbitration. The arbitrator has the authority to include them in the award, provided the party has requested attorney's fees at the hearing and before an award has been rendered. However, the right to attorney's fees may be lost if a C.A.R. form had been used and the prevailing party had not first attempted to mediate a dispute.
What remedies may be awarded to a prevailing party?
The arbitrator has the authority to award any remedy requested (other than criminal sanctions) including:
- Specific performance;
- Damages;
- Punitive damages;
- Injunctions; and
- Declaratory relief.
Is the decision of the arbitrator binding on the disputants?
Yes. The decision of the arbitrator, called an AWARD, is binding on all parties to the arbitration.
What is the legal effect of this binding award?
An award has the same effect as a written contract until and unless the award has been confirmed by a court. Prior to court confirmation, the parties are obligated to follow the award just as parties to a contract are required to comply with the terms of the contract. If the award is fully satisfied by the disputants, court confirmation will not be necessary.
How may an arbitration award be confirmed?
If a party fails to honor the award, the prevailing party must file a petition to confirm the award in court. The petition must set forth:
The agreement to arbitrate;
The names of the arbitrators; and
The award itself.
All parties to the arbitration must be named in the petition.
What is the legal effect of an award which has been confirmed by a court?
Once an award is confirmed by a court, a judgment is entered. This judgment has the same force as a judgment entered by a court of law in a civil action, and can be enforced the same way. This gives the prevailing party the ability to obtain writs, impose a lien on the property of the judgment debtor attach assets of the judgment debtor and take other actions allowed a judgment creditor.
Is there a time limit in which a petition to confirm an award must be made?
Yes, four years.
May I appeal an award if I do not agree with the decision of the arbitrator?
No. An arbitration award may not be appealed on its merits; however, you may, in certain narrow circumstances, petition a court either to vacate or correct an award.
What are the grounds upon which a court will vacate an award?
Generally, an award will be vacated only if:
- There was corruption in one of the arbitrators;
- The rights of the parties were substantially prejudiced by misconduct of a neutral arbitrator;
- The arbitrator exceeded his/her power;
- The arbitrator refused to hear material evidence or allow a postponement request made with sufficient cause;
- The award was procured by fraud or corruption or other undue means;
- An arbitrator failed, to disqualify him/herself, upon receipt of a timely request, if a judge would have been required to disqualify him/herself if the matter had been heard in court.
AN ARBITRATION AWARD WILL NOT BE REVIEWED OR VACATED BASED UPON THE MERITS OF THE CASE. In other words, the court will not re-hear the arbitration.
What may a court do if it vacates an award?
The award will be nullified. Then, depending on the circumstances, the court may order a rehearing before the same or a different arbitrator, or grant other relief.
What grounds exist to correct an award?
Generally, an award may be corrected to remedy an evident miscalculation or mistake. For example, if the arbitrator awards the prevailing party $500 in damages and $500 in attorney fees but incorrectly totals the two sums to equal $900, the court would correct the award to $1,000.
Does the arbitrator have the power to correct an award?
Yes, but only for very limited period of time. The party seeking a correction from the arbitrator must request it within 10 days after the arbitration award has been signed and served.
What is the effect of an award which has been corrected?
The arbitration award, as modified by a court or the arbitrator, is binding on the parties.
Is there a time frame within which a petition to vacate or correct an award must be made?
Yes, 100 days after service of the award.
Mediation is a method of resolving disputes in which a neutral person (mediator) facilitates discussion and negotiation between the parties to a dispute. The mediator does not have authority to impose a settlement upon the parties but instead explores with the parties the possibility of settlement.
What are some advantages of mediation?
- A mediation can often be held within a few days or weeks after a dispute has arisen;
- Meditations are private, which allows for issues and feelings to be openly discussed without fear of sensitive information being widely disseminated;
- Mediation allows the parties to express their point of view directly to each other;
- Attorney's fees can be reduced or avoided entirely if the mediation results in a settlement;
- Mediators are often trained in techniques valuable in overcoming stalemate or impasse in negotiations; and
- The parties themselves are empowered to reach their own agreement rather than having one imposed on them by an outside source such as a judge or arbitrator.
What can be considered a disadvantage of mediation?
- The parties must pay for the services of a mediator;
- If a settlement is not reached at the mediation, another dispute resolution mechanism such as arbitration or litigation may be required to resolve the dispute; and
- If a party fails to comply with a mediated settlement, then court action or arbitration will be needed.
Who can serve as a mediator? Is formal training required?
Any individual can serve as a mediator. Currently, California law does not specify any minimum qualification for or training to become a mediator. Many mediators are lawyers or retired judges, many others are professionals with a background in therapy and many others are individuals with a strong desire to see disputes resolved without resorting to violence or court action. Many mediators have taken extensive training or received education on the mediation process and mediation techniques.
Who can administer a mediation?
Any individual or organizational entity may administer a mediation.
How do I initiate a mediation?
Contact a mediation service or individual mediator. If the mediation is pursuant to a written agreement, the mediation provider may want to see a signed copy of the agreement to mediate. The mediation provider will need to know the names of the parties to the dispute. Many mediators will require payment of any applicable fee either at this time or before the mediation commences.
How do I contact providers of mediation services?
In recent years many individuals and organizations have entered the arena of providing mediation services. One source of locating these mediation providers is your local phone directory. A county or local bar association (association for attorneys) may be able to supply you with a list of providers. Also, your Association/Board attorney or personal lawyer may be able to direct you to some mediation providers in you area.
Additionally, you can contact your local County Board of Supervisors, city or county attorney's office or the California Department of Consumer Affairs Dispute Resolution Office.
How much does it cost to file for mediation?
The cost of mediation varies depending on who is conducting the mediation. Some services receive some public funding and are able to charge as little as a few hundred dollars (or even nothing at all for those unable to afford any expense), others charge an hourly fee. When contacting a mediation provider, it is important to fully understand the fee structure before initiating the mediation.
Are there different types of mediation?
Yes. Because mediation is an informal process, it is extremely flexible. Some mediations keep the parties separate most of the time and conduct a sort of shuttle diplomacy, others let the parties themselves decide when to separate and when to have joint sessions, some mediators actively participate with ideas and analysis, others prefer to be involved only as necessary to allow the parties to communicate with one another.
What typically happens in a mediation?
Typically, the parties will be greeted by the mediator who will then make some opening remarks in order to explain the process and ground rules for the mediation. At that time the parties, and anyone else present at the mediation, will usually be asked to sign a confidentiality agreement (an agreement in which the parties agree that anything said or written in the mediation session will not be admissible in a court of law). The parties are then each given a chance to make an initial statement explaining how they view the situation leading up to the mediation. From this point forward, mediation styles vary. Regardless of the format or style followed by the mediator, one thing is certain, the mediator will make all attempts to keep the lines of communication open so that progress can be made in the effort to enable the parties to reach their own agreement for resolution of the dispute.
Who should be present at the mediation?
The parties to a dispute who have the authority to enter into a settlement.
Am I entitled to have an attorney present at a mediation?
Yes.
Am I entitled to bring witnesses to the mediation?
While witnesses may help, it is important to remember that a purpose of mediation is to understand the other party's point of view, not to convince the mediator of one party's position over the other. Most mediations will probably start without witnesses present. However, if all parties to a dispute agree to listen to a witness at a later time, such a point of view can be useful.
Are attorney's fees recoverable in mediation?
A mediator does not issue any award or rulings. Whether the parties' settlement includes attorney's fees is up to the parties themselves.
If the mediation concludes with a settlement, what happens then?
Typically the agreement is reduced to a writing which all parties sign.
What if a party does not comply with a mediated settlement?
If this happens, then a court action or arbitration must be commenced. However, mediation providers report that the overwhelming number of mediations that result in settlement are complied with by the parties.
Accessorial (Additional) Services
Services such as packing, appliance servicing, unpacking, you request to be performed (or are necessary because of landlord requirements or other special circumstances). Charges for these services are in addition to the transportation charges.
Additional Transportation Charge (ATC)
This regionally adjusted charge compensates the carrier for services performed in areas where the labor rates are higher than the national average. It also compensates the carrier for additional costs incurred due to traffic congestion and added time traveling to an area for pickup or for delivery.
Advanced Charges
Charges for services of others engaged by an agent or the carrier at your request. These charges are advanced to your bill of lading charges. For example; having a pool table dismantled by 3rd Party Service provider is an advanced charge.
Agent
A local moving company authorized to act on behalf of a larger, national company.
Appliance Service
The preparation of major electrical appliances to make them safe for shipment.
Auxiliary Service (Shuttle)
If the assigned over-the-road van is unable to make a normal pickup/delivery because of physical constraints and a second, smaller, vehicle is needed, this is considered Auxiliary Service (a shuttle). Examples of such physical constraints include situations such as a road or driveway that is too narrow, a bridge unable to support the weight of the van, and the inability to park the moving van within a reasonable distance of the pickup or the delivery residence. Charges for the second, smaller, vehicle are assessed on an hourly basis, in addition to charges for the extra labor involved in making the pickup with the shuttle truck.
Bill of Lading
This is your contract with the carrier. It is your receipt for your goods and the contract for their transportation. Your signature acknowledges that your goods have been loaded on the moving van and released to the carrier.
Binding Estimate
A binding estimate is an agreement made in advance with the mover that guarantees the total cost of the move based on the quantities and services shown on the estimate. Also see Non-Binding Estimate.
Booking Agent
The agent who accepts the order for your move and registers it with the van line. The booking agent may, or may not, also act as your origin or your destination agent.
Bulky Article
Items such as cars, boats, snowmobiles and campers usually carry a bulky article charge to compensate the carrier for the difficulty of loading and unloading such articles, and their unusual bulk or low weight density. In some cases, an additional weight additive is applicable.
Carrier
The company providing transportation for your household goods and on whose interstate or intrastate operating authority the shipment is moved.
Claim
Shipper's statement of loss or damage to any of his or her household goods while they were in the care of the carrier or its agent. Such a statement is generally made on a Claim Form.
C.O.D. (Cash On Delivery)
Shipments where customer pays moving charges at the time of delivery. For C.O.D. shipments, payment is required in cash, or by traveler's check, cashier's check or credit card (pending a prior credit card approval process). Personal checks are not accepted for payment of C.O.D. charges.
Consignee
The person to whom the shipment is to be delivered.
Consignor
The person from whom the shipment picked up from.
CP (Carrier Packed)
Articles packed into cartons or crates by the carrier, not the shipper.
Cwt.
This abbreviation stands for the rate or charge per 100 pounds.
Declared Valuation
The shipper's indication of the value declared for the possessions being shipped, thereby establishing the carrier's maximum liability for loss or damage to the shipment. If no value is declared, the liability is then controlled by the tariff under which the shipment is moved.
Destination Agent
The agent designated in the destination area to be available to assist or provide information to you or the van operator regarding your shipment.
Elevator Carry
A charge to compensate the carrier for the additional labor required to move a shipment by way of an elevator.
Estimate
A professional assessment as to the van space requirements, weight of your household goods and cost of the move determined by the physical visual inspection of a shipment by a representative of the carrier. Also see Binding and Non-Binding Estimates.
Expedited Service
A program which, for an additional charge, allows a specific delivery date to be requested. If the date is not met, only standard charges apply.
Extra Stop (Extra Pickup or Delivery)
If a van operator is required to make an extra stop at either origin or destination (other than the main pickup or delivery points) an extra charge is assessed - the charge is determined by the tariff.
Flight Charge (Stair Carry)
An extra charge for carrying items up or down flights of stairs.
Full Value Replacement Protection
A valuation program which does not incorporate depreciation as a factor in settling claims for loss or damage.
Guaranteed Pickup and Delivery Service
An additional level of service whereby dates of service are guaranteed, with the mover providing reimbursement for delays. This premium service is often subject to minimum weight requirements.
High Value Article
Items included in a shipment that are valued at more than $100 per pound.
Inventory
The list itemizing the goods (and their condition) that you have released to the carrier.
Intrastate move
A move that does not cross state boundary, typically over 40 miles. See Interstate move or Local move.
Interstate move
A move which crosses a state boundary regardless of the amount of miles. See Intrastate Move or Local move.
Linehaul Charge
The tariff transportation charge to move your shipment from point of origin to its final point of destination.
Local move
A move within a state, typically 50 miles or less. See Intrastate move or Interstate move.
Long Carry (Distance Carry)
A charge assessed when a shipment must be moved more than 75 feet from the rear of the moving van to the entrance of the residence.
Non-Binding Estimate
A non-binding estimate is the carrier's approximation of the cost based on the estimated weight of the shipment and the accessorial services requested. A non-binding estimate is not binding on the carrier and the final charges will be based on the actual weight and tariff provisions in effect.
Operating Authority
Certification issued by a state or federal governmental entity authorizing a carrier to move household goods between designated geographical areas. A van line's agent may also have its own separate operating authority issued by a state or federal governmental entity, to move shipments within a certain geographical area.
Order For Service
The document authorizing the carrier to transport your household goods.
Order For Service Number
The number used to identify your shipment. It appears in the upper right corner of the Bill of Lading and on the Order for Service.
Origin Agent
The agent designated in the origin area to be available for preliminary readying of the shipment before movement (such as packing cartons), or to provide information to you regarding your move.
Overflow
Articles that are left behind due to insufficient space on a van, to be loaded on a second van for transportation and delivery.
Peak Season Rates
Higher line haul charges that are applicable during the summer months.
Pickup and Delivery Charges
A separate transportation charge applicable for transporting your shipment between the SIT warehouse and your residence.
PBO (Packed By Owner)
Articles packed into cartons or crates by the shipper, not the carrier.
Re-weigh
Second weighing of shipment performed at destination at the shipper's or the carrier's request.
Shipper
The person (customer) whose goods are being moved.
Shuttle Service
The use of a smaller vehicle to provide service to residences that are not accessible to the mover's normal linehaul equipment.
Short Haul
A move that takes place under 450 miles. Short hauls are (generally) performed with straight trucks, although tractor-trailers are often employed to complete large short haul moves.
Storage In Transit (S.I.T.)
Temporary storage of your household goods in the warehouse of the carrier's agent, pending further transportation.
Straight Truck
A truck, generally one-half the size and capacity of a tractor-trailer. Straight trucks are single cab and body vehicles (as opposed to a tractor-trailer on which the cab can be separated from the trailer).
Survey
The booking or origin agent examines (i.e.: surveys, or visually inspects) the shipper's goods to develop a cost estimate.
Tariff
The carrier's provisions, including rates, for services performed during the course of moving a shipment.
Third Party Services
Services performed by someone other than the carrier at your request or as required by federal, state or local law.
Unpacking
The removal of your goods from containers (boxes) and crates, and the disposal of such containers and packing materials.
Valuation
Shipper's declaration of the value declared for the possessions being shipped, thereby establishing the carrier's maximum liability for loss or damage to the shipment. If no value is declared, the liability is then controlled by the tariff under which the shipment was moved.
Van
A term used by movers to identify all types and kinds of trucks used for moving.
Van Operator
The driver of the vehicle carrying your household goods.
Warehouse Handling
An additional charge applicable each time SIT service is provided. This charge compensates the mover for the physical placement and removal of items within the warehouse.
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