Duane's World of Real Estate
Realtor® Duty To Cooperate Is A Narrow One
March 12th, 2012 by bobhunt
Real estate professionals who are members of the National Association of Realtors® are, for the most part, rightfully proud of NAR’s Code of Ethics. They have all agreed to abide by it, and when a fellow Realtor® appears to be acting contrary to the Code, most react with consternation.
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Agents Have a Central Role to Play; With That Comes Responsibility.
March 5th, 2012 by bobhunt
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It wasn’t too many years ago that a lot of very smart people were predicting that real estate professionals, like dinosaurs, sloths, and saber-tooth tigers before them, were about to become extinct. It was not that they were going to be replaced by someone else – persons or a profession that would fulfill a perhaps similar, but slightly different, function – but rather that they just wouldn’t be needed at all.
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People thought this for two reasons: (1) The Internet was (and still is) making information available about almost everything to almost everybody at any time of the day or night. (2) The primary – if not sole – purpose of real estate professionals was to provide information about the market. Hence, the smart people thought, people would no longer need real estate agents, because they could easily obtain the relevant information themselves.
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As an example, the demise of travel agents was often cited. They, too, were predicted to be practically eliminated as a result of the internet. And, certainly, things have looked that way. (To be sure, other factors have been at work too.) In 1997 there were approximately 44,000 travel agencies in the U.S. In 2011, the number was roughly 20,000.
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Curiously, though, despite all the pundits had to say, the membership in the National Association of Realtors® (NAR) has actually increased, substantially, during the same period of time. Yes, it has dropped from its peak during the bubble years, but still it is noteworthy that in 1997 NAR membership was 716,078, and in 2011 it was 1,009,940.
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A couple of things explain the differences: (1) Much – though not all – of a travel agent’s inventory was fungible, which is pretty much to say, interchangeable. Non-stop coach tickets from Los Angeles to Dallas are pretty much the same, regardless of airline, with the exception of time and price. When people can get the latter information themselves, they don’t need an intermediary. (2) That is not so true of real estate. The closest thing to fungibility might be model matches in the same development; but, as we all know, two Plan B’s in the Happy Homes Tract can differ in value by many thousands of dollars.
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Another, undoubtedly more important difference, is that a real estate transaction — unlike the purchase of an airplane ticket – involves a variety of dimensions or levels. The negotiation between buyer and seller is just the beginning. To name just a few, there are also considerations involving such things as taxes, title, physical and pest inspections, insurance, settlement agents, warranty provisions, and the date of occupancy.
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The real estate professional is not the person who attends to all these things, but he or she is the one at the center – coordinating them and making sure they fall into place.
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The real estate agent has a central role to play in the transaction; but with that role also come responsibility. It is twofold.
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One aspect of the responsibility is competence. There’s a lot of stuff the professional needs to know in order to properly orchestrate a transaction closing. They can never know enough. A wise person once said: “We have two things to give to our clients – our time and our knowledge. And we are running out of time.”
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The other aspect of an agent’s responsibility is a commitment to ethics. With so many moving parts in a transaction, myriad opportunities exist for a central player to take advantage of a principal – to place the agent’s interest above that of the client. This is where true professionalism comes into play: when the competence and character of an agent combine to deliver service that is both reliable and trustworthy.
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That sort of performance is not about to be disintermediated or replaced by an automated exchange.
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Bob Hunt is a former NAR director and is the author of Real Estate the Ethical Way. His email address is scbhunt@aol.com
There’s No Getting Around It: Material Facts Must Be Disclosed
March 1st, 2012 by bobhunt
A recent memorandum from the legal department of the National Association of Realtors® (NAR) reminds us that courts are unlikely to be swayed by creative arguments designed to relieve a broker of the duty to disclose material facts. The NAR discussion concerns a case (Sutton v. Driver) that was heard by a North Carolina Court of Appeals.
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CFPB Proposes New Form For Mortgage Statements
February 19th, 2012 by bobhunt
It is regrettable that the recently-created Consumer Financial Protection Bureau (CFPB) doesn’t have an easily-pronounceable acronym like HUD or RESPA. That is too bad because the CFPB is a government entity that people in the real estate industry are going to be referring to – and dealing with – over and over again in the coming years. Would that its name rolled easily off the tongue.
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Government Gets Serious about Misclassifying Employees as Independent Contractors
February 12th, 2012 by bobhunt
Most real estate brokers and sales agents who work for a brokerage firm are classified as independent contractors. And rightly so. They are paid – via commission splits – on the basis of the results of their work, not on the time or manner of their work. They are expected to operate within the bounds of the law and, if they are Realtors®, the Realtor® Code of Ethics. But, for the most part, the manner in which they conduct their business is up to them.
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Amendment To Realtor® Code Of Ethics Reflects Changes In Business Practices
February 5th, 2012 by bobhunt
The class of persons about whom Realtors® should not knowingly or recklessly make false or misleading statements has recently been expanded. An examination of what this means and how it came to pass may be of interest.
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Informative and Entertaining Real Estate Alert from Duane Gomer That is What Our Readers Tell Us
January 31st, 2012 by Duane
Here is another effort. Thanks to all of you readers who email your comments. The opening paragraphs are important to all DRE Licensees.
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California Realtors® to Build Ethics Violations Data Base
January 29th, 2012 by bobhunt
Realtor® associations take seriously the Code of Ethics of the National Association of Realtors® (NAR). Indeed, a local Realtor® association is prohibited from “knowingly granting Realtor® or Realtor®-Associate membership to any applicant who has an unfulfilled sanction pending which was imposed by another Association for violation of the Code of Ethics.”
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No Clear-Cut Rules for Rental Occupancy Limits
January 15th, 2012 by bobhunt
The issue of occupancy limits and restrictions in rental housing is a continually vexing one. Sometimes what one person thinks is too many is, in the eyes of another, not enough. And sometimes what seems enough to one may seem too much to another. Further compounding matters is the fact that different jurisdictions may employ different standards. Moreover, the standards may be applied differently in different situations.
In 1986 the Los Angeles, California, City Council adopted an ordinance limiting the number of people who could occupy a rental unit. The Los Angeles Times reported that, according to the ordinance, “70 square feet of sleeping space would be required for two persons and another 50 square feet for each additional person. City officials calculate that this formula would permit up to 10 people in a moderate-sized two bedroom apartment.” This formula can be found in section 503(b) of the Uniform Housing Code. Additionally that code requires that a dwelling unit have at least one room that is at least 120 square feet in size. « Read the rest of this entry »
Duane’s Facebook Postings
January 11th, 2012 by Duane
About a month ago I sent you my recent Facebook postings. The response was so great I am doing it again. Enjoy.
If you would like to read them daily, go to www.DuaneGomer.com/DuaneGomerSeminars and press the like button. You will have to be registered with Facebook which will take you just a few minutes.
By the way, if you want to renew a Real Estate License or a Notary Commission or get a Sales or Broker License or MLO Courses, call 800-439-4909 or go to www.DuaneGomer.com. We are ready to help. That is our business.
BUSINESS GIFTS
One gift that has been well received by our clients is a year’s subscription to Sunset Magazine. 12 issues with your name on every issue. We have been receiving copies for years from Terry Yapp, Mission Viejo Realtor, and D.J. and I appreciate them greatly. One strong selling point. The cost is only about $16.00 per year. Well worth it. Other gifts we have used successfully are movie tickets, Danish Kringles, Gas Cards and James Salt Water Taffy.
CONGRATULATIONS LINDSEY
This month Lindsey Virginia Gomer gets her degree from CSUN with a Real Estate Major. She passed her DRE Sales test in June, 2010 and now has all her broker courses done. Since she has a four-year degree she needs no experience and will take her Brokers Test soon. Hopefully, she will follow in the footsteps of her father, David Gomer, also a CSUN Real Estate Major and now a Reverse Mortgage Specialist, and Grandpa Duane, a Real Estate Speaker. Look out world here comes Lindsey. « Read the rest of this entry »