Thursday, September 4, 2014

Top 20 Ways to Avoid REALTOR JAIL!

The following information is provided to help keep you out  of “Realtor Jail”…


This is a list… not in any particular order of things you should always complete or check prior to signing a listing agreement or an offer to purchase.


1.    Seller Net Sheet- Always request the Seller provide this info and ask if they are current on mortgage(s), credit lines, taxes, etc. 
2.    Have Buyer meet with a Local Lender prior to writing contract – In todays credit score driven market this is a must…plus in a multiple offer situation it can instill seller confidence in your buyer. Also it will help protect the buyer from losing their due diligence fee and valuable time. 
3.    Seller Disclosures- Make certain Seller fully completes the form by checking every box and filling in explanations…and make certain each Buyer fully reads and understands each disclosure given on the form. 
4.    Keep a copy of the active MLS sheet for your files- Listing Agents could change something of importance (Like Gas Hot Water to Electric) and you will need it later for a reference. 
5.    Always keep your sketch and calculation sheet when measuring for square footage. The NCREC may require you provide these if a complaint is filed regarding square footage. 
6.    Check the Sex Offender website for surrounding area when listing a home (most buyers will)…Keep your clients educated! 
7.    Is there vacant land adjacent to the property? Check and see who owns it,  the current zoning, and possible future uses. Here in NC, Progress Energy owns thousands of miles of right of way... that has no power lines on it…Yet! 
8.    Make sure all addenda is added to listing agreements and Offers to Purchase…many localities require certain forms such as air traffic noise addendum, future highway project addendums etc. 
9.    Home Inspections should always be strongly suggested…along with Lead Paint, Radon, Termite, and Well/Septic. If the Buyer selects not to have them done… get them to sign a form stating they are aware of the dangers and you advised them to have these tests performed.
10.  If the home is on a well/septic…pull the permits and assure the system permit coincides with the number of bedrooms the home has. Have the well tested not only for water quality but for the gallons per minute it produces. 
11.  Surveys…some lenders no longer require a new survey…Not a good idea in my opinion…I suggest the buyer always pay for a new survey… an costly encroachment may slip by without a survey… which may rear its ugly head later! 
12.  If a buyer is writing a cash offer, always get a proof of available funds letter from the buyer’s financial institution. If the buyers are legitimate… they will not mind you asking for one. 
13.  Google search the property address and buyer, seller names…you’d be surprised what you can find with a simple Google search. 
14.  If something seems fishy or unethical, talk with your Broker in Charge, better to play it safe and ask questions than to get caught in a mess. If the buyer, seller, or other agent is trying to bend the rules don’t take part in it…walk away! If there is a clear and blatant violation of the law, you hold an obligation to report it to the proper authorities. 
15.  Check for unpermitted square footage…This is becoming more and more common…if there is a red flag, ask and check! 
16.  Check HOA association for pending assessments and if the seller is current on dues…Many agents put under #7(d) of the NC Offer To Purchase… “None- if any Seller to pay”. This is very bad wording for the Seller. If the pending assessment becomes a true assessment anytime post-closing, the Buyer could hold the Seller responsible for the payment… even months or years after the closing. 
17.  Check for flood hazards…(another good reason for a new survey) 
18.  Check restrictive covenants for subdivisions and give the Buyer a copy to review or a link to go to…your Buyer may have an intended use for the property the restrictive covenants will not allow…once they have closed it is too late. The NCREC states licensees are not attorneys and should not be “de-coding” or explaining the intricate details of neighborhood covenants to clients. If they have questions direct them to their closing attorney for answers. 
19.  Always request repairs to be done by a licensed contractor and suggest buyer pay to have all repairs re-inspected… 
20.  Get EVERYTHING in writing! A proper paper trail will keep you out of REALTOR Jail better than any slick New York Attorney! Keep detailed records of phone conversations and follow-up with an email to verify and confirm understanding of all parties. Keep voicemails and compile all emails into one folder. With electronic cloud storage being dirt cheap…I suggest you just keep everything…you never know when you will need it! 
I am sure there may be others but this is a few of the items I see agents running into problems with….your local area may have other specific concerns…if so, add them to your list! 
Eddie Brown  ©2014