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Your Weekly Newsletter for East Texas’ #1 Real Estate Firm
Happy Birthday 15 Holly Shaw 22 Juan Alfaro 24 Carol Starnes 25 Shirley Snowden
Legal & Ethics, Newspaper Schedule, Roundtable, Short Sale Info, How to Get in Trouble Without Really Trying……………………………………………………. …... ……………..…………Page 1 How to Get in Trouble (Cont)......................................Page 2 How to Get in Trouble (Cont)…………………….……………..Page 3
In this Issue:
May 24: Regular Ad May 31: NO AD (5th Sun.)
Legal & Ethics
Tuesday, June 9th @ GTAR Board Office
Legal: 12pm Ethics: 1:30pm-4:30pm You may sign up for one class or both. RSVP to Cam Nutt, email@example.com . 9am-
Wednesday, May 27, 9am @ Chez Bazan
We’ll discuss updated materials on RESPA, how it may apply to us , and other business practices. We’ll also discuss pricing your listings. See you there!
SHORT SALE INFORMATION
Need help with Short Sales? There is some information online that can assist you in your endeavor to complete the short sale. Check out this excellent website on short sales.: =www.shortsalesr.us Within the site, this page provides a checklist for short sales. It’s good stuff. http://shortsalesr.us/short-sale-how-to/step-by-step-short-sale/
How to Get in Trouble Without Really Trying
Seven bad habits you should kick (or never acquire in the first place).
by Avis Wukasch Often, agents and brokers ask me how to stay out of trouble in the real estate business. My answer? You can’t.
If you’re saying to yourself, “I haven’t had any problems,” I suggest you add the word yet to that thought. There’s no question that lawsuits and ethics complaints are sometimes filed over very serious matters. However, many times agents and brokers find themselves in a courtroom or in front of an ethics hearing panel due to some oversight, miscommunication, or simply because they were in the wrong place at the wrong time. Here, then, are seven habits that create trouble for agents and their brokers. Avoid them and you will significantly reduce your chances of having to defend yourself in a lawsuit, TREC investigation, or ethics charge.
Habit #1. Not reading anything regarding your profession
Have you heard of RDR? It stands for REALTORS® Don’t Read. Now, that description doesn’t apply to all REALTORS®. Make sure this label doesn’t fit you. Everyone needs to keep up with the latest in our profession. This magazine is full of good and practical information. So are our national and local magazines and newsletters. It’s your responsibility as a professional to know about trends, rules changes, forms updates, and other important developments. Make the time! Also, read all mail and e-mail from the Texas Real Estate Commission. TREC doesn’t send junk mail. Any mail you receive from TREC is likely important information that relates to your license or an enforcement action. Brokers, make sure you have a process for your agents to get their mail and e-mail reminders from TREC and from your REALTOR® associations. We often hear agents say, “I never received that … my broker did not give it to me.” Another frequent comment from agents is that they did not read any of the materials or keep any records regarding a timely license renewal. Amazing! Not only is this irresponsible, it uses up an enormous amount of TREC staff time to answer these questions and chase down the appropriate information. Stay on top of this. If you keep working after your license expires, you are violating the law, and you and your broker could be fined. Habit #2. Filling in contract forms without knowing what they mean How long has it been since you thoroughly read the TREC-promulgated contracts? Are you aware of the latest revisions? Do you know how the contract and the various addenda work together? Agents frequently contact the commission not knowing when the option period starts, how to determine the effective date of a contract, the correct way to count days, how the backup addendum works, what to do about option money on a backup offer, when to deposit the earnest money on a short sale, and on and on. Most complaints filed with TREC include an agent’s drafting error in some way or another. These types of mistakes can cost your client a lot of money and seriously change that person’s position in the transaction. For example, missing the notification date on the financing addendum condition removes the condition. Habit #3 Not knowing, caring about, or understanding agency law If you don’t know who you represent, how will you know the appropriate way to communicate with parties and what can and cannot be revealed? How will you know what your duties are? This includes intermediary roles. So many agents present the Information About Brokerage Services form at the time of signing the contract. That is way too late. Common sense—and the law— says it should be presented at the first substantive dialogue regarding the property, so that from day one, the parties and you have a clear understanding of your relationship and duties before you begin negotiations. Pay attention to the meaning of informed consent. When working in an intermediary situation, remember that you must have prior permission … not permission at the time you write an offer. Also in an intermediary situation, unless appointments are made, the agent cannot give advice and opinions. Habit #4 Advertising without regard to the law The ad reads: House for sale, call Bob Jones, 555-555-1234. No good. An advertisement must not be misleading to the public, must always identify a licensee as an agent or broker (the word
REALTOR® will suffice for that requirement), and cannot be presented with salespersons using names in business that imply the agent is in charge of the brokerage. For example, “Bob Jones and Associates” is not acceptable. “The Bob Jones Team” is fine, if paired with Bob’s broker’s name, too. Habit #5 Working outside your area of expertise or performing duties for which you are not licensed Don’t obligate yourself to take on something you have no business doing. This is a challenge for some because agents by nature want to be helpful and answer every client question. No one wants to say “I don’t know.” However, this is a valid answer if you truly don’t know. In fact, it’s the only answer when you don’t know. The Texas Real Estate Commission gets many questions asking our opinion if a contract is valid or enforceable, or who gets the earnest money, etc. Unless you are also licensed to practice law, you should not be advising people of their legal rights. If such matters are in question, your best bet is to always recommend the party contact an attorney for advice. You do not have an obligation to interpret a survey, title commitment, or other legal document, so don’t take on that duty. Once you obligate yourself, you may be held responsible and negligent if you do it wrong. For example, if a client asks you to interpret an inspection report, have the person ask questions of the inspector directly. Don’t try to sell an apartment complex with 52 units as your first listing out of real estate school or take on a listing in Amarillo when you practice in Harlingen and have never visited the Panhandle. And if the closest encounter you’ve ever had with a cow is the view from your car window while driving down the highway, you have no business selling a working ranch. Habit #6 Losing your temper, acting like a fool, and putting your interests above those of your client TREC complaint files are packed with angry e-mails between agent and client, many of which contain language that can’t be printed here. While angry words in and of themselves are not violations of the law, once a complaint is filed, enforcement will review the whole transaction. Unprofessional conduct does not help your case, so don’t hit the send button in your e-mail (or make that phone call) until you have calmed down. However, you should respond to all criticism and disagreements, even when you know the call will be unpleasant. Avoidance just makes these situations worse. Many complaints are filed with the commission simply because a client didn’t receive a return phone call. Habit #7 Paying no attention to what the client says. Judi Shanklin-Carnes, a close REALTOR® friend of mine, used to say whenever an agent would ask how to negotiate a contract detail, “What does your client want?” To know that, you really have to listen. Nowadays, not only do you need to understand what clients want and need—and how much can they afford—you also need to know what makes them tick. Agency relationships are based on trust—on both sides. You also should pay attention to people’s words and behaviors so you can steer clear of clients who will bring you nothing but trouble. Keep in mind that you don’t have to represent someone who you think is dishonest. Be wary of someone who asks you to compromise your integrity in a transaction “just this once.” The courtrooms and jails are filling up with licensees who participated in mortgage fraud and should have known a house priced at $250,000 that did not sell after a year probably would not sell for $450,000 with repairs. Also give some serious consideration before you agree to represent complainers. If they tell you about their terrible lawyer horrible former agent, and useless mortgage brokers, beware! They’ll complain about you, too. This is a great business. It offers many rewards—financial and otherwise. Pay attention to what you are doing … and help out other REALTORS® who need to break one or more of these habits. I don’t want to see your name on the list of disciplinary actions taken by the real estate commission.
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