SB 476: This Law May Prevent 1031 Exchange Consumer Losses

In “Nevada’s 1031 Exchange Law: How Will It Work and Is California Going to Act to Stop Okun-McGhan Like Disasters?”, we described SB 476, our opinion on it’s practical uses, and it’s effectiveness in preventing the “looting” of consumer monies. In part 2 we will investigate the law’s provisions for “written approvals”,”separation of funds”, and our reaction to this legislation.

According to “QI Laws Passed in NV, Proposed in California” (Michelle Napoli’s great article) SB 476 may very well be significant in preventing fraud in the 1031 industry. The first reason is the provision on written approvals: “. . . money held in any account for a client may not be withdrawn from the account without the written approval of the licensee and the client.” If this provision is “policed” and “penalized” with appropriately tough legal and criminal actions, then SB 476 could be a template for the rest of the country.

SB 476 states the following regarding separation of funds: “all exchange funds must be kept separate from money belonging to the licensee and must be deposited in a financial institution that is federally insured or insured by a private insurer approved” under the law, “unless another financial institution has been designated in writing in the exchange agreement.” This provision, in hand with written approvals for withdrawing funds, is the very basis for bolstering today’s sagging consumer confidence in the 1031 Exchange industry. All of these assumptions are based on the fact that the state of Nevada will make an exchanger pay a high price in both criminal charges and civil expenses if they step out of line.

Consequently it remains unclear how well this law will actually work in prevention of the Ed Okun/McGhan type of consumer losses. At the very least it is a very positive step in the right direction.

If you have further questions please contact Dean Guadagni at Saving San Francisco Bay Area Buyers Thousands or ???

The real estate world is teaming with hundreds of independent and national chain discount brokerages and business models. The newest, in my experience, to flash on the scene is I found this company on google in a sponsored (paid) link which raised my level of skepticism. Here is what makes snapAcommission new and possibly a viable option for buyers.

The Model:SnapAcommission’s business model is based on representing buyers who are set on purchasing property from a home builder. Home builders are an attractive solution to many buyers for their willingness to negotiate upgrades, floor plans, add-ons, and in some cases provide the buyer with options in financing. Consequently snapAcommission only works with customers who are going to purchase from a home builder. According to “Many people are not aware that builders allow you to be represented by a Real Estate Agent for the purchase of a newly constructed home.”

In my opinion, snapacommission does have a viable point. The majority of new home buyers really do not understand some of the advantages and disadvantages to buying from a home builder. The savy home buyer may be best served by investigating snapacommission first for their value proposition-to be outlined below. The idea would be to use snapacommission as a “bargaining” tool when interviewing an “open” Realtor. The Realtor may be worth the extra commission monies if he/she can demonstrate and justify their capabilities.

The Pitch: SnapAcommission says that (in general) most home builders factor in between 2 and 3% sales commissions into the sales price of a new home. They then offer this commission to the selling broker/agent for bringing them (builder) a buyer. Here is where things get interesting according to snapacommission “We enjoy sharing 40% of this commission with our clients as they inevitably are and active part in the search for new homes. . . and we reward them for this.”

The following is the example savings provided by snapacommission:

I. Purchase price: $1,500,000
Commissions offered by builder: 3%

You get $18,000! ($1,500,000*.03*.4 = $18,000)

II. Purchase price: $1,500,000
Commissions offered by builder: 2.5%

You get $15,000! ($1,500,000*.025*.4 = $15,000)

The example is interesting and confusing to me because of one statement made earlier on snapacommission’s home page of their site: “ will refund you up to 40% of this commission if you use one of our experienced agents to represent your transaction. ”

Where did those two ugly little words, up to, come from in this pitch? The entire site gives examples of a 40% savings on a 2-3% agents fee. That means that savings are on a sliding scale with the best that the home buyer can do is 40%. What are the rules constituting a savings less than 40%? That would require the buyer to make a through investigation.

The Rest of the Story: Snapacommission has page of conditions that I will abbreviate here. If you are thinking of using this service remember to review the conditions page in it’s entirety-please do not rely upon this summary to suffice your legal requirements. With that moment of “cya” let’s get to it.

1. Condition #1 is that a snapacommission Real Estate agents must, first, meet you and register with you at the sales office for the property the buyer is interested in purchasing. This notifies the builder that the buyer is being represented by an outside Real Estate agent.

2. The home builder has to offer at least a 2% commission to the selling broker/agent who is representing the buyer.

3. The snapacommission “rebate” must be approved by the buyer’s lending institution.

4. Buyer Agency Agreements with snapacommission must be in writing in accordance with California laws.

In my opinion, snapacommission is worth investigating. Always remember that a full service Realtor or Real Estate agent with experience in a specific market will be able to show you a much broader array of properties than a home builder with one site in one area. Also remember that the really solid professional Realtors, The Harper Team, earn their commissions through their expertise and knowledge of the “deal”, the area of interest, school systems, climate, building plans for an area, and many of the nuances that are valuable intangibles in purchasing a home.

If you have further questions please contact Dean Guadagni

Nevada’s 1031 Exchange Law: How Will It Work and Is California Going to Act to Stop 1031 Exchange Disasters?

In what may become a series within my 1031 Exchange series, Nevada acts! Will others follow? Part 1: A long awaited law to regulate 1031 Exchange Qualified Intermediaries was passed and signed into law by the state of Nevada. SB 476 was passed on June 4 and signed into law on June 14 by Governor Jim Gibbons. The law, designed to regulate Qualified Intermediaries, became effective July 1.

According to Net Release Forum’s Michelle Napoli, “It transfers the regulation of licensing authority affecting QIs from one division of the Nevada Dept. of Business & Industry to another. Rather than the Real Estate Division, QIs are now regulated by the Division of Financial Institutions. The DFI commissioner is empowered to investigate exchange facilitators operating in the state and to fine and/or suspend their licenses for violations.”

The new 1031 “Cop” is required to perform a number of functions. The first line of defense to prevent the type of losses that happened in the Ed Okun 1031 Tax Group or McGhan’s Southwest Exchange fiascos is as follows. Let’s take the points, reported by Michelle Napoli, one at a time:

* “The DFI must audit all Qualified Exchange Intermediaries at least once every five years. . . “

Why this (audit) is not once every year or every other year is beyond me. It seems to me that Nevada does not want to spend the money, time, or man power to properly enforce this law.

* “Conduct random “Partial” audits on licensees with a history of violations. . . “

Why would the state even entertain the idea of allowing licensees who have violated the regulations or laws to maintain their license to practice as a Qualified Intermediary? What is a “Partial” audit? And would a “Partial” audit be enough to determine if a QI is getting ready to cheat it’s clients?

* “Money movers would have to pass a background check and they would be required to register with the state. . . purchasers of QI businesses have to pass background checks and be licensed by the state before purchasing the business.”

Registering “money movers” with the state is a good idea. It’s a great idea if the state would then stand behind some type of guarantee. If the state grants a registration, then it (Nevada) should be equally responsible for any losses suffered by victims of 1031 exchange rip offs. In my opinion, it would take a commitment of this depth to ensure the public’s safety and restore consumer confidence.

Another good idea is requiring all purchasers of 1031 businesses to pass background checks as long as the checks are performed with a “fine tooth comb.” In order for the purchaser to take title to the 1031 business he/she/it would have to have a Nevada 1031 Exchange license. In my opinion the best model to emulate would be the tough Nevada Gaming Commission’s stringent rules for attaining Gambling licenses in Nevada.

*”. . . QIs are required to maintain a minimum $1-million fidelity bond coverage and a minimum $250,000 errors and omissions coverage. Certain exceptions are made for QIs that are owned by public companies and/or other regulated entities such as banks.”

The requirements of $1-million fidelity bond coverage and minimum of $250,000 errors and omissions coverage on the surface seems fair and good. Yet there is NO language outlining the actual requirements of payout that victims’ situations would have to meet in order for the insurer to pay off. Simply put the insurance company has the right to pick and choose which deals they choose to pay out to victims. How does this actually work?

Please come back as Part 2 of this Series will describe “the rest” of SB 476 and what California is doing to pass laws regulating the 1031 Exchange industry.

If you have any further questions please contact Dean Guadagni at

LifeLock: “Credit Identity Self Defense or Possible Culprit-You Decide”

In a previous effort, I investigated and described the credit security company Life Lock. As a former Trans Union employee, I had first hand knowledge into the challenges consumers face when attempting to protect their identity, monitor their credit report, and (most difficult of all) getting the credit bureaus to act on their behalf. In the article “LifeLock: A Vital Resource for Realtors and Mortgage Professionals” I outlined the many solid benefits that LifeLock offers it’s clients.

In recent months, LifeLock has come under fire for the resignation of their former CEO Robert Maynard Jr.. In the article “LifeLock Founder Resigns Amid Controversy.” The controversy brought the company under suspicions but it did not close down their business. Consequently, a case is made for the opposite by TechCrunch writer Michael Arrignton.

Arrington wrote an insightful, interesting, and important article on LifeLock titled “The Very Organized Hit Job On LifeLock.” Arrington’s instincts are right on. His guesstimate that one of the Credit Bureaus was behind a smear campaign to discredit LifeLock was right on the money. As a former credit bureau representative, I have seen first hand (albeit 10 yrs ago) examples of why LifeLock is a pain in the neck to the credit bureaus. Suffice it to say that LifeLock provides a layer of protection the bureaus claim to provide-yet seldom perform well.

Ultimately it is up to every American consumer with a credit history to police their identities, credit profiles, and possible attacks against their social security numbers. In my opinion, LifeLock is a good place to start this monitoring.

What Used to Have Peacock Feathers, Hot Tubs, and Now Supports An Average Residential List Price of $1,233,945?: Marin County


photo courtesy of
I was born in San Francisco, California and I spent my formative years in the Marin County city of San Rafael. As a native of Marin for 22 years, I have watched the explosion in real estate home appreciation, gentrification of it’s demographics, and solidification as one of the most exclusive counties to live in in the United States.

My parents bought their first house in Terra Linda, a unincorporated section of San Rafael, a new middle class town in Marin County back in 1967. They paid $19,000. They sold our little “Kenny” home in 1979 for $175,000 in order to move to a larger house in Novato. Five years later, Mom and Dad sold that home for $243,000 as they were transfered to Connecticut.

Today their Terra Linda home is worth in excess of $750,000 and their former Novato digs have been appraised at $950,000. Although my parents are always looking to the future, they have never quite gotten over the explosion in growth Marin offers to homeowners willing to stay. A great source of documentation for this growth was provided by Marin Magazine’s August 2007 article “Marin County Real Estate by the Numbers.” Here is what they found:

*Total Real Estate Sales for year 2006: $3,104,299,994. That is 3 Billion One Hundred and Four Million Two Hundred and Ninety Nine Thousand Nine Hundred and Ninety Four dollars. This from the smallest county in terms of land size and population.

*Average Residential Sale Price: $1,218,506

*Number of Realtors in Marin County, a county with a population approximately 225,000, 1,750.

*Highest Priced Home for Sale: Blanding Estate, Belvedere at $65,000,000

*Marin County Sales Averages 1985 to 2005: 1985 2,874 units sold-Avg price per unit $200,557. 2005 3,407 units sold-Avg price per unit $1,078,819.

According to Bay Area Real Estate Information Services Inc., 10 of Marin’s cities have average home prices of 1,000,000+. The highest average priced city is Kentfield weighing in at a hefty $3,489,218.

What do all of these numbers mean? In terms of telling the Marin County story, these numbers are important but tell just half the story. What they do represent is an example of the value and growth that luxury California real estate has shown through a consistent track record over decades.

Tips for Maintaining Positive Energy

The following article is the first in a series of articles to help Realtors and real estate professionals maintain a positive attitude through positive thought process. This series will be authored by myself and Susan Hanshaw, inspirational teacher, coach and speaker. This article, written by Susan Hanshaw, gives steps you can take to make positive thinking a method to achieve happiness and relieve stress. Thank you Susan!


How do you maintain a constant positive thought process without letting the stresses of the outside world interfere?

Positive thinking really can become a habit if you work on it. It just takes practice. There are many things you can do to practice:

  1. Begin every day with some kind of practice that reminds you that whatever you manifest in your life begins as a thought in your mind. Your create your life through what you think about. Make a habit several times throughout the day to remind yourself by bringing this idea to your awareness.
  2. Be aware of your thoughts and the control that you have over them. If you catch yourself thinking negatively, stop the thought and replace it with a positive one.
  3. Approach your world from a place of gratitude. Focus as much as possible on all the things you have to be grateful about. It’s impossible to experience a negative thought while you are dwelling in gratitude.
  4. Develop a strong faith in the good of the Universe. Expect that all your needs will be met and that you have absolutely nothing to worry about.
  5. Think of your mind as a sacred place and protect it. Don’t allow yourself to participate in negative energy. Claim your power to change or remove yourself from negative environments.
  6. Look for beauty in everything you encounter.
  7. Think of your experience of life like starring in a movie that takes place in your mind. If you want to experience happiness, think happy thoughts. If you want to be miserable, fill your mind with negative thoughts.

Remember that you don’t have to put up with the negative thoughts that may seem to naturally dart through your mind. They may continue to show up uninvited, but that doesn’t mean you have to let them in the door to visit.

Thank you for visiting. Here’s to a life of richness!

Susan Hanshaw

MK Restaurant Chicago: What Does Quagmire and a Former Beauty Queen Have In Common?


Editor’s Note: This post was written in 2007. We have not visited MK restaurant since that time and they may have greatly improved their service and polices. Please give them a chance and take this review with a grain of salt. We are hoping that they have improved and are now reaping the benefits of growth through experience.

I recently visited my parents in Oak Brook a suburb 22 miles west of downtown Chicago. I came to Chicago because I had not seen my parents in months and I wished to introduce them to my new love interest. During our five day jaunt, I planned one day and evening in Chicago. With Priceline’s help, we snagged a 4 Star luxury hotel suite for less than half the original price at the Westin River North. The room was fantastic and the location was next to the river, the House of Blues, and Harry Carey’s.

Our big treat was a trip to Restaurant MK (Michael Kornick) not far from our new digs. In 2002 I ate at MK and loved every bite and gulp. Fantastic food, huge portions, a electric room and crowd to match. The place oozed New York “It.” Everything was pure pleasure. Then it happened.

Like “Family Guy’s” Quagmire or a former beauty queen past her beautiful stage in life, MK has become clueless to it’s decline. The food still remains a solid bet as it is both tasty and plentiful. But there have been major changes that prevent me from recommending it to anyone.

1. The Staff has the attitude that they are “doing you a favor” by allowing you to dine at THEIR place.

2. The Sommelier constructed his wine list as if Quagmire took over his brain. Too many white wines on the list were from Red winery specialists. Likewise there were red wines on the list from white wine producers who make poor red wines. Add to this weird mix, the fact that there is no value section at all unless you think that a $35 per bottle corkage fee is value? Like a 3rd World country, this list has it’s downtrodden poor and it’s super rich. Consequently unless you are willing to spend $60+ per bottle, very few selections are worthy of the food.

3. The Service and Attitude was both over the top and under the table. The waiter acted like a snooty society snob. He had NO clue about wine or wine etiquette. No restaurant should ever assume that it is their right to pour the wine. They should ask if the patrons would like to control the wine or if the waiter should pour away. At MK they get pissy if you tell them hands off the bottle. The other etiquette breach? They took our bottle off the table and then expected us to wait for our server to go find it to then pour it. That is a terrible idea and one I quickly squashed. The whole issue made for an uncomfortable experience.

At the end of the night, I tipped but it killed me. I was kind of wishing I could pull a dine and dash like the good ole high school days when the local bowling alley guy was too hammered to chase us. But this time I would have been the bowling alley guy and I would have never made it out of my seat.

If you are looking for great food in Chicago try Charlie Trotter’s, Greek Town, most any Steak House, or something eclectic. Just save yourself, and that Brinks roll, and avoid MK for now. Maybe in the future they will wake up to the fact that their beauty is gone and it costs dearly to be a Quagmire!

Student Loan Scandals Abound: “Where Do San Francisco Parents Turn for Help?”

The rocket-jet stratospheric rise in College tuitions is hitting an all time high with no end in sight. This is a monster burden most parents are not prepared to take on when the time comes to send their children to college. Complicating and aggravating matters is the ongoing student loan scandal that continues to rock the nation’s universities.

In one of the worst examples of kickbacks, the University of Texas (Austin) fired their Director of Financial Aid Lawrence Burt. According to the University, the firing was handed down due to “improper conduct.” This conduct included “the determination that Burt had more ties to a student loan company than had been previously known and that Burt had begun recommending the lender to students a few months after he bought stock in it’s parent company.”

With multiple stories of this ilk littering our scholastic landscape, it is no wonder parents are feeling distrusting, outcast, and unsure where to turn for financial help. High schools are understaffed with guidance counselors often assigned hundreds of students. In many cases these counselors are not informed in alternative forms of student tuition financing. The information flow can be slow or even misinformed in some cases. Where do parents turn for answers?

Consequently “College Planning Specialists” main platform will be to provide pertinent, alternative, and important financial aid information for the parents of college bound students in the San Francisco Bay Area. For more information about the student loan alternatives, we invite readers to follow our upcoming series “Student Loan Alternatives: Answers for Parents.” If you need immediate assistance, please contact Dan Evertsz of College Planning Specialists 415 756.6007.

If you would like to ask questions off line please contact Dean Guadagni at Thank you!

Pioneers of the Sexual Revolution: Jim Mitchell Gone But Not Forgotten!

For anyone over the age of 45, the late 1960’s, 1970’s, and the early 1980’s were a time of Sexual awakening and revolution. Norms and traditional roles for women and men were being challenged, sexual behavior was being redefined, and an awareness of one’s “body” was both embraced and encouraged.

One of the driving forces behind this freedom of expression were the Mitchell Brothers. Jim and Artie Mitchell, two local boys from Antioch, created a pornography empire with their crown jewel centerpiece the Mitchell Brothers O’Farrell Theatre in San Francisco. Jim and Artie challenged and fought for freedom of speech and expression for 30+ years. They pioneered and paved the way for many of the freedoms enjoyed by the television, cable television and print medias today.

The “boy’s” crowning achievement was their production of the movie “Behind the Green Door” starring Marilyn Chambers in 1972. The movie was and still is considered the “Citizen Kane” of the pornography world; it was the most successful film of it’s time and spawned an entire industry. Chambers went onto world wide fame and the Mitchell Brothers empire was off and running.

It was with a sad heart and fond memories that Jim Mitchell, surviving Mitchell Brother, was laid to rest at a Memorial service in his hometown of Antioch, California on Thursday. Funeral attendees included former San Francisco Mayor Willie Brown, writer Warren Hinckle, and ex San Francisco District Attorney Terrence Hallinan. Also amongst the crowd were movie producers, strippers, actors, and other entertainment people.

According to the San Francisco Chronicle reporter Peter Fimrite: In a final and fitting tribute, Mitchell’s son Raef stood up and said that although his father had his faults, he was a man of his word. “He always told me, ‘Son, I’m not the greatest man. I’m not perfect,’ Raef said. “Don’t try to be the greatest man. Just be a man.’ ”

God bless Jim Mitchell not a great man but definitely a man’s man.

Positive Thinking: A Realtor’s Guide to Prosperity, Joy and Stress-Free Living

The real estate profession is fraught with challenges and obstacles. Stress levels often run high and maintaining a positive pristine attitude can be difficult. The business of the real estate transaction has many moving parts that can run off the proverbial road. It is the largest most emotion packed purchase or sale most customers will experience in their lifetimes. Consequently, Realtors are expected to “wear many hats”: housing market expert, community resource, schools system consultant, and psychologist to name a few.

Compensation is almost exclusively on a 100% commission basis. Each Realtor is CEO running their individual businesses. Expenses are out of pocket and rarely if ever subsidized through a traditional “salary” or car compensation package.

Compounding a Realtor’s stress level are uncontrollable factors. Constantly changing housing markets, interest rate fluctuations, buyer and seller indecision, unreal buyer or seller expectations, and stiff competition are always part of a Realtor’s life.

With all of these factors in mind, becoming a successful real estate agent or professional is often a long road of hard work, perseverance, luck, and preparation. What is so often left behind, in the rush to perform all of these functions, is the awareness that positivity in attitude and thought is vital to success.

I am happy to announce a new series that will focus on positive thinking, stress management, and maintaining positive attitude/energy. I am very excited to announce Susan Hanshaw as a major contributor and driving force behind this project. The author of Unleashing Your Soul: Finding the Courage to Follow Your Heart and blog Sanctuary for Change, Susan was a recent guest on Maggie Mistal’s “Making a Living” formerly “Career Talk” show for Martha Stewart “Living” Radio channel on Sirius Satellite Radio. Susan’s business includes inspirational coaching and speech writing. Welcome Susan!