Scandalous Suggestion from Debt Commission

Author and commentator Chavez outlines how proposed changes to the mortgage interest deduction would immediately reduce the value of homes by as much as 15 percent.


http://news.yahoo.com/s/uc/20101203/cm_uc_crlchx/op_2016210

House to House: Selling A Home for the Holidays?

Photo courtesy of Amy Glover Bryant

I’ve always thought that listing a house for sale at Christmas was a bad idea. I figured that the holidays were crazy and cold enough without adding the stress of shopping for a house to people’s lists. Plus, aren’t homes just easier to sell when the flowers are blooming and the weather is welcoming? Isn’t that usually the spring and summer months (although in Arkansas you never know). Then again, I think my house always looks its best at Christmas and, with mortgage rates at historic lows right now, perhaps it’s not such a bad idea to try and sell one’s home at the holidays.

Not knowing which way to turn in my thinking, I did a little research and asked a few Realtor® and mortgage banking friends what they thought.

As I’ve previously pointed out in this column, smell has a tremendous impact on what people think of your home. In fact, the smell of fresh baked goods is the scent the Scent Marketing Institute recommends for inspiring folks to purchase a home. Christmas is full of wonderful smells: apple cider, sugar cookies, evergreen trees, peppermints. You could even leave some of the baked goodies and cider out for prospective buyers to enjoy.

I also think there is no better feeling than to walk out of a cold, blustery day into a warm home filled with yummy sights and smells. It’s cold out there and your house is going to feel like a haven in a cold world to prospective buyers.

Houses show better when decorated for the holidays. From all accounts you definitely should decorate, but do so in a way that helps your home look inviting, homey and welcoming.

Photo courtesy of Amy Glover Bryant

Cindy Meyers of Meyers Realty in Hot Springs had this to say, “Even if your home sells during the holidays it won't close until after. It's your home, live in it and enjoy the holidays with family and friends.” Karen Crowson at Crye-Leike Realtors® in Benton completely agrees, “Life has to continue,” says Crowson. “Decorate but consult your Realtor®. He or she can help keep cluttered decorations to a minimum so buyers can focus on your home’s attributes.”

According to Little Rock Realtor® Wally Loveless another reason to consider selling during the Christmas season is that any prospect that is looking for a home has a deadline. There are no casual prospects just passing time. So when you do have a showing it will be to someone who is serious.

There are also strong tax incentives motivating buyers to purchase a home before the end of the year. I’m definitely no tax professional but from what I understand the major tax factor is that the buyer can deduct most of their major closing costs such as the origination fee, appraisal, title insurance policy, etc. on their 2010 income tax. According to Loveless even if the seller pays the costs for the buyer the IRS has ruled that the cost are imputed to the buyer as included in the cost of the home.

Furthermore, in 2011 the buyer will be able to deduct their mortgage interest and property taxes on their income tax return. These deductions can be significant, particularly in the earlier years of a mortgage when you are paying off so much interest.

"In many cases, there are certain tax advantages to buying a home. Closing the loan on a new home during the holidays could lower the amount of taxes paid or increase a return - as always you should check with your tax professional," says Justin Moore, President of the Arkansas Mortgage Bankers Association.

According to Jim Cargill, President of Arvest Bank in Little Rock, not only are interest rates at historic lows right now but the services that support the home sale such as the banks, title companies and appraisal services are less busy during this season which could result in a more streamlined closing time-table.

Cargill also pointed out that although it is generally a slower time in home sales, some families are relocating for the start of a new job in a new year. “Relocating ‘at semester’ for families with school-aged children, allows for somewhat less disruptive transition to a new school, as opposed to during the semester,” he said.

As one Arkansas Realtor® put it, we all have a bit more of a “warm fuzzy feeling” at the holidays. Perhaps that “better, more softened frame of mind” will drive buyers to take that leap of faith and purchase your home – hopefully for the price you are asking.

Finally if you are concerned about the inconvenience of having to empty your house of friends and family in order for buyers to tour it remember you have the option to restrict showings to times that are convenient for you. Good luck and happy holidays!

♦♦♦

House to House is written by Amy Glover Bryant, APR and distributed weekly by the Arkansas Realtors®  Association.

Regulating Real Estate Professionals

If you have ever bought or sold real estate, you have undoubtedly employed the services of a real estate agent to guide and assist you through the process. Consumers are often uncertain who regulates real estate professionals.

Many real estate professionals are subject to two sets of rules. First, each jurisdiction has a governmental agency, typically referred to as the real estate commission, charged with the authority to issue licenses to real estate professionals and enforce related state laws and regulations. Additionally, many real estate professionals, after obtaining a license, choose to become members of a REALTOR® association, whose mission is to promote the profitability and success of its members. Those licensees agree to abide by a strict Code of Ethics, and the local REALTOR® association is responsible for assuring that members adhere to the Code.

Real Estate Commissions

Each jurisdiction has a real estate commission whose primary mission is to protect the public from unqualified real estate practitioners. As such, the real estate commission has the authority to implement and enforce real estate licensing laws. In keeping with this authority, the real estate commission serves various important functions, including:

• Authority to Issue a license, and monitor real estate activities.

• Establish requirements for maintenance of a real estate license, such as continuing education.

• Conduct investigations into alleged violations of jurisdiction licensing laws and regulations based on complaints filed by the public or on the real estate commission’s own motion.

• Perform routine audits of trust accounts.

• Enforce licensing laws and take disciplinary action against licensees who have been found in violation, including revoking their ability to practice licensed real estate activities in a respective jurisdiction.

Members of the public who suspect a real estate licensee has violated the licensing laws can direct their complaint to the real estate commission of the respective jurisdiction, which will then review the allegations and determine what action, if any, is appropriate for the jurisdiction to pursue.

REALTOR® Associations

Membership in a REALTOR® association is entirely voluntary, but carries with it the responsibility for each REALTOR® member to adhere to a strict Code of Ethics. Real estate professionals join their local REALTOR® association and, as part of their membership, they automatically become members of both the state REALTOR® association, and the National Association of REALTORS® (NAR). The NAR Code of Ethics, which establishes a public and private standard of behavior for REALTOR® members when dealing with the public and other real estate professionals, is enforced at the local level through the local REALTOR® association. It is therefore the function and authority of the local REALTOR® association to:

• Conduct hearings into alleged violations of the NAR Code of Ethics.

• Take disciplinary action against a REALTOR® member, which can include the ordering of fines or revocation of a real estate professional’s membership in the REALTOR® association.

Similar to filing a complaint with the state real estate association, members of the public can also contact their local REALTOR® association and file a complaint where they suspect a violation of the Code of Ethics has occurred. It is important to understand, however, that a REALTOR® association does not have any authority over a real estate professional’s license, as this is the exclusive jurisdiction of the respective real estate commission. REALTOR® associations only discipline REALTOR® members for violations of the NAR Code of Ethics. For all other alleged wrong doing, consumers should contact the respective real estate commission or consult with an attorney.

In conclusion, real estate professionals are held to high standards under which they must conduct their business. The real estate commission enforces its license laws, while members of a REALTOR® association must agree to follow the NAR Code of Ethics. If a real estate professional fails to adhere to these standards, appropriate action can be taken.

This article was written by the National Association of REALTORS®, in collaboration with the Association of Real Estate License Law Officials.

Holiday Safety Tips

Shopping Tips

1. Let someone you trust know about where you will be shopping, and if possible, give them a timetable for the locations you will be visiting.

2. Never take more cash and credit cards with you than you need. Ladies, carry a small purse or billfold to prevent purse-snatchers from seeing an opportunity to get easy cash.

3. Always lock all valuables in your trunk and remember that some vehicles have buttons on the inside of the passenger compartment that open the trunk. If possible lock this device away.

4. Never walk around shopping centers with a large amount of packages. As you make your purchases, place them in the trunk of your car.

5. Always walk to your vehicle with a group of people. You can ask a store security person to walk with you to your car.

6. While in your car, lock all doors and keep a look out for suspicious acting people.

7. If you are robbed, remember that your money is not worth your life. Give the robber what they want and call for help as soon as possible.

Home Safety Tips

1. Always keep your doors locked while at home. Never open your door to someone you do not know.

2. Never leave your Christmas gifts out in plain sight. If they are under the Christmas tree, place the tree in a location where the gifts cannot be seen from outside the home.

3. Always remember fire safety if you are using a real tree.

4. If suspicious activity is noticed in your neighborhood, call the police as soon as possible and remember to get a description of the suspect vehicle and persons.

Driving Safety Tips

1. Never drink and drive, period. Even one beer can impair your ability to drive. If you are going to drink alcoholic beverages, use a designated driver.

2. If you have a cell phone, take it with you just in case you have trouble.

3. Always plan your route and obey all traffic laws.

4. If you notice someone following you, drive to a safe location where you can notify police.

5. Think safety and do not panic if trouble arises.

Real Estate Brokers have “Signatures”, not “Robo-Signatures

By Gary Isom
Executive Director
Arkansas Real Estate Commission
Gary.Isom@Arkansas.Gov

Lately, the news has been full of stories about hundreds of thousands of foreclosures being delayed because of robo-signatures. The legality of many individual foreclosure proceedings are being challenged based upon the claim that the person who gave the final stamp of approval to move forward with the foreclosure action did not actually have knowledge of important facts of the case. That claim, if proven, could allegedly convert the authority’s “signature” into a “robo-signature”, thereby calling into question the validity of the foreclosure proceeding.

Fortunately, that rationale does not apply to the supervising broker’s signature on a real estate contract. Otherwise, we might have parties to real estate transactions claiming that their sales contracts were not valid because the supervising broker signed the document without reviewing and having knowledge of all the facts of the transaction. However, let’s ask ourselves this question: if the contract could be declared void because the supervising broker did not know all the facts of the transaction, would we have a lot of voidable contracts in the real estate business? Unfortunately, I’m concerned that we would.

Arkansas Real Estate Commission Regulation 10.4(d)(1) states:

“The preparation of instruments in connection with a real estate rental or sale and the closing of a sale by a licensee must be performed by or under the specific supervision of the principal broker.”

Arkansas Real Estate Commission Regulation 10.12(b) states:

“ (b) Every offer received must be signed by the licensee who receives it and by that licensee's supervising broker. Every acceptance must be signed by the listing licensee and that licensee’s supervising broker . (It is desirable for the supervising brokers of the selling licensee and listing licensee to review and sign each real estate contract before it is submitted to the seller, although that is not always possible. However, such supervising brokers shall review and sign the real estate contract as soon as possible after it is received, and, in all cases, prior to closing.)”

As for Timing for Supervising Broker Signatures, the Sooner the Better

There are often questions about when a supervising broker should sign the sales contract. The above regulation addresses that issue somewhat by stating that the brokers should always review and sign the contract prior to closing. However, the sooner a supervising broker signs a contract, the more apparent it becomes that the broker was involved in the transaction, thereby fulfilling his or her supervisory responsibilities. If a contract negotiation goes through several stages and parties are left holding multiple versions of the contract that do not include the supervising broker’s signature, it can appear that the broker is not supervising his or her agents. While it may not always be practical for the supervising broker to sign at each stage, as a matter of practice, a supervising broker should attempt to establish that he or she was supervising at the earliest stage possible. The broker’s signature does just that. Parties should be given copies of contracts as they sign them. If parties are left holding multiple copies of the contracts that are not signed by the broker, those copies will most assuredly be submitted to the Commission if the party files a complaint. It certainly looks better if those copies are signed by the supervising broker.

To sum it up, principal brokers and supervising executive brokers are responsible for knowing the facts of the sales contracts that are brokered by agents licensed with their firm.

When a commission investigator visits an office to review files, the supervising broker’s signature must appear on all sales contracts for closed transactions. The supervising broker’s signature should also appear on pending sales contracts, unless there is a good reason that the supervising broker has not had the opportunity to review and sign. The supervising broker’s signature establishes that the broker reviewed the document and was knowledgeable of the facts of the transaction. The concept of a robo-signature is simply not an acceptable option for supervising brokers in a real estate firm. The language of a formal ORDER OF NOTICE to appear before the commission would read something like “The supervising broker knew or should have known the facts of the real estate transaction”.

Always remember Commission Regulation 10.4(a)(1) which states:

“A principal broker is generally responsible for all business conducted by the broker’s firm and for all of the real estate activities of all of those licensed under or associated with the principal broker…”

NOTE: For purposes of this article, the term “principal broker” should be interpreted to include designated executive brokers of branch offices and the term “supervising broker” includes principal brokers, designated executive brokers of branch offices, and executive brokers who are assigned supervisory responsible over licensees in the firm.