We hinted about a project late last year, and are happy to announce that The Real-Tea Podcast is Available Now!
This twist on a Real Estate Podcast presents from a Professional view with a Client Perspective, join Tammy Murphy and Elle Sollenberger, as they spill The Real-Tea about buying and selling Real Estate. You will get to meet our hosts and learn what brought the Realtor and Client together for this fun and sometimes quirky podcast. The years they have shared in working together in multiple deals and different market scenarios is beneficial for anyone looking to Buy or Sell a house.
This year has been especially difficult for the real estate market – and in many ways has opened our eyes to be ever more diligent about PROTECTION and RIGHTS. Along that lines, criminals seek opportunities to take advantage of a chaotic environment and rely upon those not keeping up with all the things going on / happening. Our desire is to PROTECT YOUR RIGHTS in Real Estate and assist with helpful information – so please take this message as your PSA to: Protect Yourself from Deed Fraud.
Naturally, if you are in the process of buying a home with us, we are going to share with you the BENEFITS OF A TITLE POLICY – and we have seen a number of instances where the client DID follow our advice and ultimately this SAVED THEM from title troubles and legal costs to correct. While ultimately it is the client’s decision as to if they want to purchase a title policy, we believe that being INFORMED and EDUCATED about What is a Title Policy and What does it do for YOU – is the best way to ensure you make the right decision for yourself.
Our counties have registered an INCREASE in Fraudulent DEED ACTIVITIES in 2023, and for this reason, many counties are taking actions to establish further steps in the recording process, as well as setting up notification systems. Even if you are not buying a home anytime soon, or for that matter, even if you do not plan to SELL your home – having a FRAUD ALERT set on your DEED with the County CAN HELP PROTECT YOU. “The sooner you know something is wrong – the sooner you can do something about it.”
We all know that change can be good, if not sometimes painful? What you NEED TO KNOW is that there are proposed changes to the Real Estate Industry – that COULD make a real difference to YOU – as the consumer (buyer or seller). *** LONGER POST WARNING 😉 ***
I know you think this has already happened with the increased higher interest rates – right? Yep, that is one change that certainly has impacted everyone.
You also may know that the low inventory and higher purchase prices have continued – and are projected to continue for years – also correct!
However, the little known discussion that has been playing out for a number of years now – with the Department of Justice (DOJ) and National Association of Realtors (NAR) – is something “I” believe will be a BIGGER IMPACT and CHANGE TO THE INDUSTRY than most anyone even realizes.
Now while this may not be decided this year, maybe not even next year – what I see is the tsunami effect of things that is building: low inventory / higher prices; higher interest rates; and THEN if we get way-laid with the change to Realtor Compensation as proposed – the CONSUMER LOOSES! How? You may be asking…
Let’s say that for the 115+years now that NAR and Real Estate has been established, there is a way for a SELLER to list their home for sale, having professional representation by their Realtor for their best interests AND in that same agreement compensation is agreed to and offered for a BUYER’s Relator to also be paid. This works well, is openly noted and shared in the listing services of our MLS (which is solely structured around that compensation agreement BTW). Yes, Sellers can decide to sell on their own and NOT USE a REALTOR; just as Buyers can decide to make an offer and NOT USE a REALTOR – BUT, if either party uses a Realtor under the current agreements – each party is PROTECTED AND REPRESENTED in a FIDUCIARY ROLE that is bound by ethics and rules. (If I am working for the Seller – then I HAVE TO PROTECT THEIR INTEREST; If I am working for the Buyer – then I HAVE TO PROTECT THEIR INTEREST) you get the point??
Why does this work?? Because the offer of compensation is addressed with the LISTING with the SELLER and both sides of the transaction are ASSURED OF REPRESENATION. And each Realtor is getting PAID at the CLOSING of the DEAL from the Seller Proceeds.
If a Seller does a For Sale By Owner – there are NO LEVELS OF PROFESSIONAL REPRESENTATION, NO protocols of disclosures or process, and it really becomes a BUYER BEWARE (Caveat Emptor) situation.
If a Buyer decides to purchase without a Realtor Representation, well they can certainly choose to navigate the purchase, finance, inspection, appraisal and closing process ALL ON THEIR OWN – however, each of those steps COULD present an issue for those who may not be familiar with or understanding of their “rights”.
Now – back to the PROPOSED CHANGE – for whatever reason – there is a BUG up someone’s crawl that is saying this system (well proven over the 115 years) that is UNFAIR. The change is to have Sellers Pay for their Realtor Services and the Buyers to Pay for their Realtor Services. And I know, on the service – everyone THINKS that is an equitable resolution.
HOWEVER, what you don’t realize – while the Seller is likely MAKING MONEY ON THE TRANSACTION AND ABLE TO PAY THEIR REALTOR FEES AT CLOSING – the BUYER is BRINGING MONEY TO THE TABLE TO CLOSE: either in the form of their LOAN (which currently ONLY can cover the mortgage expenses), or their own FUNDS OUT OF POCKET.
I’m going to now give an EXAMPLE of what a Buyer Scenario looks like: Buyer decides they want to buy house at $100,000 (good luck finding that right now! – but easy numbers help make the point)
Buyer is “pre-approved” with a lender who has indicated the type of loan they qualify for – FHA may be 3.5% down (or $3500 down), plus closing costs and loan origination fees – well, let’s just call this a Total of about $6000 that will be needed for the Buyer to Close the Loan.
The “process” should / could involve an Inspection ($500) BUYER PAYS OUT OF POCKET AT THE TIME; and an Appraisal ($400) BUYER PAYS OUT OF POCKET TO SCHEDULE. There could be additional inspection costs (termite, well, radon, etc) all of which would ADD TO THE OUT OF POCKET COST – and ALL PAID BEFORE THE CLOSING BY THE BUYER.
To be “safe” and for Buyers to have some understanding of what they need to BUY a house, I use GENERAL NUMBERS LIKE THIS TO PREPARE THEM, and also to gauge their financial ability to make this decision to purchase. If they have ~10% of the PRICE OF THE HOME as funds available for them to use – THEN this may be a deal for the Buyer.
BUT NOW – the Proposed Change, is stating the BUYER is to PAY FOR THEIR REALTOR SERVICES – which as indicated is NOT ABLE TO BE ROLLED INTO THE LOAN (currently) so will be OUT OF POCKET COST. If the Buyer then has to come up with an extra $1000, $2000 or $3000 + to pay for their Realtor Services… DO YOU THINK THAT IS AN UNFAIR HARDSHIP??
I believe that this proposed Change is not only UNFAIR to BUYERS, it puts them in jeopardy to decide to NOT USE A REALTOR (saving the money) but loosing out on their RIGHTS AND REPRESENTATION. I believe this proposed Change is a TERRIBLE SHIFT TO AN INDUSTRY whose sole business has been based on Ethics, Integrity and FIDUCIARY RESPONSIBILITIES FOR OUR CLIENTS. It is a GAME CHANGER and NOT IN A GOOD WAY.
Why do I go to conferences, pay DUES and work hard for my clients? Because it is something I take personally, it is a DUTY I feel, and it is an HONOR THAT I SERVE. Having an industry change such as this come along and “knock out” all the 20+ years of experience of my service is a SLAP IN THE FACE. DOJ should be asking the consumers if they are REALLY READY to carry the burden of not only having higher prices due to the lack of inventory (and many governmental shortages and failures), to the higher interest rates (again, due to governmental failures and oversight), to NOW – the proposed BURDEN of having to pay for their “rights” to be a protected BUYER DURING THE HOME PURCHASE PROCESS with their Realtor Services NOW BEING ON THEM DIRECTLY.
Yes, I could go on and on about this – with REAL LIFE EXAMPLES of how I not only had Sellers who made MONEY on their Real Estate transactions – but that they GLADLY PAID FOR THE REALTOR SERVICES FOR BUYER INCLUDED, and knew / know that was the way the process amicably worked for ALL.
And more importantly, I can tell you about REAL LIFE EXAMPLES of Buyers who NEVER THOUGHT THEY COULD OWN A HOME, were negotiated into deals that WORKED for them and made them HAPPY HOME OWNERS – with as LITTLE OUT OF POCKET AS POSSIBLE – to which they were FULLY AWARE OF AND ABLE TO PAY, mainly because there was NO ADDED COST OUT OF POCKET TO THEM FOR MY SERVICES.
And, to go a step further – yes, I have the HORROR STORIES as well of people who LOST OUT because of decisions they made WITHOUT THE PROFESSIONAL SERVICES OF ME (or other REALTORS) as a result of their trying to “SAVE SOME MONEY”.
On the record I will say all of this, and what I believe is that ANYTIME SOMEONE IS TRYING TO TAKE AWAY THE RIGHT OF ANOTHER (in any form: out-right change to constitution or bylaws or process rules) THEN THERE IS ALWAYS A GAIN FOR THOSE SEEKING THE CHANGE and NOT A BENEFIT FOR THOSE WHO ARE AFFECTED.
And my passion to serve is the reason MY CLIENTS continue to use me for their Real Estate needs – they KNOW I am going to STAND UP, SPEAK UP and VOTE in this Industry for the RIGHTS OF THE CONSUMERS.
Reading the Listing Agreement your agent is presenting to you – is just the beginning. But as someone who may not have recently sold a home – you have no idea what to look for or ask.
Here are a few things to HELP YOU make the right decision.
(not just about – Is it the right decision to SELL the house or WHO is the right Realtor to use) but:
What is the difference between an “Agent” and a REALTOR?
What is the Listing Agreement TERM (are you really wanting to give someone 40 years to sell the property??) Yes – I know that sounds EXTREME – but WHO WOULD HAVE THOUGHT that was an actual thing? (Until of course the news made us all aware IT HAPPENED).
Now, we can’t name names – or identify the potential “brokerage / agents” who were involved with this ridiculous listing agreement for 40 years (due to our Real Estate Law and Ethical Code) which seems ironic that we can’t call out something as crazy as this – but THEY can DO IT?!?! (Well, that is still to be decided).
Anyway, here is my go at calling out a few things you SHOULD be aware of from the start:
An agent – MAY or MAY NOT be LICENSED with the State to Sell Real Estate. Ohio REQUIRES a Real Estate License for the activities involved with buying / selling / representing others in real estate and being compensated with payment; including PROPERTY MANAGEMENT (unless it is your own property and transaction). Your first clue – ASK IF THEY ARE A REALTOR and then you can look this up online – free, at https://elicense3.com.ohio.gov/lookup/licenselookup.aspx.
Legally and Ethically – a person cannot use the term REALTOR without being a Realtor, paying those National / State and Local Dues and adhering to the Code of Conduct. Does that mean bad apples slip in or hide from the process? Sure – but at least that is a good place for you to start.
The “Term” of your listing agreement is normally considered to be the amount of time you agree to work with that Realtor / Brokerage in the efforts to sell your property. This could be ONE WEEK (although not normally this short) – to ONE MONTH, or even ONE YEAR – really, it can be ANY length of time that is agreed between the parties; but NEVER HAVE I EVER seen one for multiple years. No one wants to do paperwork needlessly, so making an agreement by the day would be just as unlikely. If the market turnover of listings is less than six months, then agreeing to a Listing Agreement of six months would seem reasonable and customary.
SECOND, you should be given or receive a COPY of anything you sign – at any time. I like to provide a copy in advance, certainly giving you plenty of time to review BEFORE SIGNING, or at any point if you lose your copy, I am happy to provide. If you want to have an attorney REVIEW the Agreements and any Documents PRIOR to the actual Listing of your property – that is certainly YOUR RIGHT.
The next thing to raise alarm – is this part about a LIEN AGAIST THE HOUSE. In no language of our board sanctioned Listing Agreement is there anything that refers to the right of the Broker to hold / take a LIEN against your house! No reason whatsoever for this to be a part of the Listing Agreement, it is not needed in order to SELL the property and YOU should BEWARE of having to give up ANY OF YOUR RIGHTS just to try and Sell the Property. It’s almost as ridiculous as saying you have to give the title to your car just to get it serviced or washed!!
Finally, in this case that has made the news circuit – it sounds like an OFFER was made in advance of the Agreement for a “Payment” to be made to the Seller for the opportunity of the company to get the Listing Agreement. I don’t know about you – but THAT would certainly raise a red flag for me! Offering to PAY someone for the ability to SELL their home maybe be considered an inducement and I would question if that was Ethical, let alone Legal – especially since that is NOT THE NORM in our Industry.
The saying, “If it seems too good to be true – it probably is” rings loud and clear!
Moving can be a stressful time, but staying organized during the move can help to lower stress. Not everything has to be done at the same time, there are many things that can be planned ahead for. Some things can be done as far as two months out. Here is an organized list of things that can be done by week.
Don’t get stuck inside for Open Houses, phone calls, paperwork or anything that has to do with selling your home! Leave it to the professionals at RH2L that are passionate about what they do! Selling a home can be demanding. These realtors will do their best to keep you satisfied and relaxed during a stressful time. Enjoy your weekends and let the professionals sell your home!
The real estate brokerage with a heart! Helping you as buyers and sellers in today's real estate market. RH2L is "Real Homes To Love" and your choice for professional real estate services in today's market! Office hours by appointment.
