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Archive for May, 2008

RESPA

J. Andrew English J. Andrew English
Friday, May 30th, 2008

The term RESPA violation is thrown out often in the real estate world, yet most individuals have no idea what it really refers to. Real Estate Brokerages are not allowed to receive undisclosed illegal kickbacks from related service providers within the industry. For example, a RE Brokerage should not receive a kickback from a local Title Company for repeatedly sending business their way. The same holds true for loan officers. A loan officer can not pay a fee to a brokerage for closed mortgage transactions.

The Federal Government takes RESPA violations seriously because they are in place to protect the public and encourage free competition. RE Brokerages are in a position of trust with their clients. Clients take the suggestions of their brokers very seriously. As a result, RESPA wants to prohibit a brokerage from profiting at the expense of this trust w/out full disclosure. Look at it this way, if a broker is sending a buyer to a loan officer in hopes of receiving a kickback later, is the broker really serving the best interest of his/her client?

NAR repeatedly stresses to brokerages to keep up to date with changing RESPA guidelines. Despite this, new stories pop up regarding serious RESPA violations and the involvement of RE Brokerages month after month. In the real estate world, the relationships that are closely monitored are between Title Companies and RE Brokerages and Lenders and RE Brokerages. These two relationships are littered with opportunities for abuse by both parties.

National MLS Listing Companies

J. Andrew English J. Andrew English
Thursday, May 29th, 2008

The bottom line is that you want to deal with your local broker directly. Only the local broker can tell you what they do and don’t provide. National companies have a history of telling clients anything they want to hear. They do this because the local broker they refer the business to is the one who will end up dealing with the unhappy customer. When you are browsing for a flat fee broker, ask the company if they are the company that is physically going to provide all of the services they promise and not refer you to anyone else. If they avoid the question, move on to a different company. You will save yourself great time and peace of mind by working with the individual who actually provides the services they promise. The most frustrating thing to me is the number of calls we get from clients who have been deceived by national companies. Unfortunately, the only way to avoid this is to do business with the companies who are responsible for providing the services they have contracted for.

NAR – DOJ – Proposed Settlement

J. Andrew English J. Andrew English
Wednesday, May 28th, 2008

Rather than go over the entire proposed settlement, a few points below: However, to view the proposal, please visit http://www.usdoj.gov/atr/cases/f233600/233607.htm

Both IDX and VOW websites will continue to be available to the public.

VOW websites will require email authentication for public use/access.

IDX related websites are not affected by the agreement.

VOW websites will continue to operate and be available to the public.

MLS’s will not be able to keep data away from VOW related websites.

NAR wasted an absurd amount of money on a 3 year legal battle that could have been settled years ago on the exact same terms.

Overall, any data that you could hand to a client in your office, you can also display through your VOW. This includes sold data, withdrawn data, expired data, pending ratios, etc… If you can give it to your client in person, you can broadcast it through your website. This is exactly what MLS’s wanted to avoid. NAR had argued that this data should be exclusive to its members, not the general public.

Misleading Sold #’s of High Rise Developments

J. Andrew English J. Andrew English
Tuesday, May 27th, 2008

If you were to talk to one of the many developers in downtown Austin, Texas, they will tell you that not only is their building almost sold out, but also other competing buildings are sold out. Potential purchasers need to know that this isn’t always true.

When a developer takes a deposit on a high rise unit, they will typically refer to this unit as sold, when in fact it is simply under contract. What developers don’t tell you is that these deposits typically represent a very small fraction of the cost of the unit. For example, a 10k deposit on a 1.2 million dollar high rise in downtown Austin is not going to keep the buyer from backing out should the market tank. Certainly, a buyer will choose to walk and lose the 10k deposit than close on a unit that is worth 200k less than what they agreed to pay for the unit 24 months ago.

The point is that just because a unit has a deposit on it doesn’t mean it will close escrow. These sales are highly dependent upon the continued health of the market. Look at Las Vegas, almost every single project that went up was completely “sold out” before construction ever began. Looking back, about 10-15% of those individuals completed their purchase. The others simply walked. Buyers in Austin of these units should be more concerned about the overall health of the market and less concerned about how many out of state speculators have put down minimum deposits.

Buying MLS Listed Foreclosures

J. Andrew English J. Andrew English
Friday, May 23rd, 2008

Through our buyer rebate program, we are commonly asked to write offers on MLS listed foreclosures. I want to add a few comments to help buyers increase the chance of an accepted offer.

First- Understand your market. For example, in Las Vegas, MLS listed foreclosures are typically receiving 5-10 offers a piece. Thus, if you plan on writing an offer well below list price, understand it is doubtful you will receive any word from the lender at all. Most lenders choose to just not respond to offers they don’t like. There is nothing wrong with throwing out low ball offers, however, just keep in mind you won’t always get a reply.

Second- Do what the lender tells you to do. When the MLS listing says that you must be pre-qualified with XYZ Bank, trust me, they mean it. When you obtain financing, you can use whomever you wish. However, when you submit your offer, send the requested pre qual from the preferred lender.

Third- Date your EMD checks correctly. Don’t send a copy of a check for an offer you wrote 4 weeks ago on a different property. The person reviewing the file will notice this every time.

Fourth- Do not ask for disclosures the lender will not provide. Most lenders will not provide real property disclosures. The quickest way to have your offer declined is to ask for disclosures when the listing states no disclosures are provided.

Lenders want to get the most money for the property. They also want the simplest deal possible, the deal they feel is most likely to close. Thus, you want your offer to be clean, easy, and give the appearance that you have done this before. It is not uncommon for a lender to accept the cleanest offer over a slightly higher offer with complications.

Abilene, TX MLS

J. Andrew English J. Andrew English
Thursday, May 22nd, 2008

Abilene has recently announced they will be joining the NTREIS MLS system within the next 60 days. This means that NTREIS will become the local MLS for Abilene and that all existing listings within the Abilene system will carry over to NTREIS. Once this merger takes place, Congress Realty will be able to list Abilene, TX properties on the local MLS.

One thing I find interesting is why the Abilene Association of Realtors® would agree to this. Common sense would tell me that their members would be strongly opposed to this. By agreeing to join the NTREIS system, Abilene is opening the doors to increased competition. The reason why smaller areas like Waco, South Padre, Pocatello, etc… have their own systems is so that they don’t have to compete with larger firms from outside of their immediate area. (How does a small Abilene brokerage compete with Ebby out of Dallas on advertising dollars?) Abilene brokerages will now have to compete with all Dallas/Fort Worth brokerages for listings in Abilene. If I am a local Abilene agent, I am very upset and very worried about my position within the market.

Don’t get me wrong, I love the merger between the two systems. Ultimately, it helps the consumer and helps increase competition amongst brokerages.

NAR and Short Sales – About 12-18 Months late

J. Andrew English J. Andrew English
Wednesday, May 21st, 2008

This week NAR announced that all Multiple Listing Services must give the listing brokerage the opportunity to disclose the potential for a short sale to all MLS members. In basic terms, it means that each MLS must add a new field to the MLS. (Short Sale – Yes or No) NAR is of course taking credit for this monumental decision after many months of deliberation and research.

“Prior to the rule change, many MLSs did not have the ability to disclose the potential for short sales to other MLS participants, so that buyers and cooperating brokers who are presenting purchase offers may not realize until they submit the offers that the sale is subject to lender approval.” (Colleen Badagliacco- Chairwoman- NAR MLS Policies)

This isn’t actually true. Most MLS’s do have a particular section for a short sale to be disclosed. Furthermore, 99% of every MLS listed short sale has a GIANT disclosure in the private remarks regarding the short sale status. Thus, while I appreciate NAR’s continued dedication to the Real Estate Market, I sincerely wish they would take these sorts of actions when the time calls for it. (like 18 months ago)

E-Lockboxes – Where we provide these and why

J. Andrew English J. Andrew English
Tuesday, May 20th, 2008

Many sellers value the importance of Electronic Lockboxes and want to know if we provide these boxes in their area. Currently, we offer boxes in the following areas:

  • Las Vegas/Henderson/Boulder City
  • Phoenix/Scottsdale/Mesa – including all surrounding cities
  • Tucson
  • Austin
  • Dallas – all surrounding cities – Fort Worth, etc..
  • Houston
  • San Diego
  • Boise/Meridian/Eagle – all surrounding cities
  • Albq, NM
  • Prescott, Arizona
  • San Antonio

On occasion, we can get boxes in areas not listed above. E boxes are programmed to work by the local association of Realtors®. The box will only work in that area, thus, a Las Vegas box will not work in Austin. The reason we can not offer these boxes in all areas is that some associations simply will not ship the boxes to any member(s). (such as Congress Realty) Instead, they require that the member physically walk into the office and pick up the box. As a result, this makes acquiring electronic lockboxes in some areas difficult for us. However, we have employees in different areas and we frequently are visiting areas for various reasons. (such as continuing ed, working with buyers, etc..) Thus, if you ever want a box in an area that we do not have listed, let us know. Many times we can get the box you need within a short time frame.

Setting showing times

J. Andrew English J. Andrew English
Monday, May 19th, 2008

Sellers, do not limit your showings unless you have absolutely have to. Every situation is unique and there are instances when you just can’t help not being available. However, do not set certain days and certain times during those specified days that the property can be shown. I see this all the time and the first thing that comes to mind is that the house won’t sell.

An example of what not to do:

Private Remarks: **Home can only be shown Tuesday and Thursday, 2-5pm, Owner must be present**

A much better way to accomplish the above showing situation would be something that gets the buyer and/or Realtor® to call you directly. Then, once you have them on the phone, suggest the time that works for you best first. However, understand, you may have to adjust your schedule. At the very least, encourage the phone call. This will at least give you the opportunity to work with the agent or buyer on the showing. If you discourage showings by setting very limited showing access, the home most likely will not sell.

Try to make your home the easiest home to show in the subdivision.

Midland-Odessa, Texas MLS added to our coverage area

J. Andrew English J. Andrew English
Friday, May 16th, 2008

Congress Realty has joined the Midland-Odessa local MLS as of 5-16-2008. We are very excited about bringing this coverage area to our Flat Fee MLS program. We will have our website updated to reflect this new coverage area within the next few days. For additional information, please contact Andrew English at 800 657 6579 ext 1.

To view complete coverage of this MLS, please click the link below.

Texas Flat Fee MLS Listing Coverage