December 27th, 2021 at 11:55 am
The AAR Residential Purchase Contract has many time obligations for each party. Failing to comply with those obligations could cause the deal to fail and could cost the party money.
Within the entirety of the agreement, the buyer has about 11 obligations, while the seller has 17. Each obligation carries with it a timeline in which the party must comply.
Does every buyer know what they must do and by when?
Does every seller know that they must do and by when?
The answer to both is a resounding NO!
Most clients have little to no knowledge or understanding of those timelines or the issue itself, simply due to the fact that they have never seen that document prior to entering this contract. Thus, who must they lean on to keep them on track?
YOU!
Every client is different. A cash buyer has fewer obligations and some different ones compared to a buyer obtaining a loan. Same is true for the seller.
The role of every agent is first to know the party’s obligations. Not word for word, but at least a knowledge of the obligation, the timing of that obligation and where to find it on the contract.
Every agent must be able to build a timeline and keep the client informed. And the agent must determine the timing of advance notice of an upcoming obligation, meaning, how long the client has before the obligation is due. Each one is different.
Again, know the contract and supporting addenda. No need to know word for word, but at least the concept and where it is located. If your client runs past an obligation, which impacts their ability to perform, they will look to you as to why that occurred. That will be a tough conversation to have with your client.
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November 18th, 2021 at 1:02 pm
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November 11th, 2021 at 10:21 am
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October 4th, 2012 at 8:37 pm
Real estate agents are a slice of society as a whole. As members of this society, we have the same concerns and possibilities as any other sales person, any other business field and any other member of society. Bookstores have complete sections on self-help, motivation, sales tools, marketing and business promotion. We have all watched the sales gurus tell us how to make it rich quick and we have all heard the seminars of the best ways to increase our business. So what?
I have witnessed good real estate agents find themselves in a malaise; a slump. Every professional goes through that. If you have a 3 out of 10 closing ratio, you might consider another field. If a football quarterback completed 3 out of 10 passes in college, they would be working in the corporate world after college. But if a baseball player got a hit 3 out of 10 times, they would be batting .300 and teams would be clamoring for them. It is all perspective.
I have also witnessed real estate agents go to sales seminars, motivational rallies and the like, get all fired up, claim they are going to turn things around and use what they learned, and they fail to do it. Why? Because they don't think out of the box!
It is simple. I could write a book on sales techniques, but it would be a short book. One page or maybe only half of a page.
Here it is for free. Do you want to have more business in 2013 than you will have in 2012? Call 20 new, different or referral rich people 3 days a week.
That's it. Call them, talk to them, ask how they are doing, how's the family, what about the weather and in turn, tell them why you are calling. Be honest. You are asking for business or referrals. Don't hang up until you tell them why you called.
It is that simple. If you called 20 cold calls today, 20 warm calls tomorrow (follow up from days, weeks, and months ago from someone who asked for that) and 20 calls to referral rich contacts the third day, you would talk to 60 people a week. Simple math; call and talk to 60 people a week, and you will obtain 3-5 good actionable leads. Work those leads the other 4 remaining days of the week. Next week, start all over again.
4 good leads a week are 16 good leads a month. Can you close 4 of them, 5 of them, 6 of them? All of them? Close even 4 of them, and that is 48 closings for the year. Have you ever sold 48 properties a year?
Think outside the box. Ignore all the hype and marketing and sales techniques. Call 20 people a day 3 days a week every week of the working year, and you will vastly increase your business.
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August 28th, 2012 at 5:06 pm
Taking a new listing is one of the exciting parts of a real estate career. It is potentially the beginning of a relationship that if cultivated properly could result in subsequent sales and referrals for years to come. Sadly, not every listing provides those benefits. Some are problems from the start and are flat-out un-saleable. The sooner you realize the trouble signs and take action, the better you will be
What is your time worth? Have you ever sat down and determined what your hourly income is? This can be an eye-opening experience, because once you know what you are paid each hour, you will be less inclined to allow someone to waste your time. Once you know that, you will work to lessen or completely avoid those situations that take up your time and do not provide revenue.
The current market of lender-owned and short sale properties, coupled with many sellers in bankruptcy often creates a situation where the property is un-saleable. Here are the more common reasons why and the reasons why you should think of cancelling the listing and moving on…
- Uncooperative or uncommunicative seller. In short sales, the sellers are often frustrated and worried, and will be less willing to cooperate. In either case, such as making certain disclosures or not paying some of the buyer's costs might render the property un-saleable. If the seller has dropped out of sight, does not return any calls, e-mails, faxes or any other means of communication, you might need to walk away.
- Seller turns down reasonable offers. You know what's reasonable. No matter what the list price is, if your seller refuses to accept a reasonable offer, or at least provide a reasonable counter-offer, that might be time to cancel the listing. Give this stronger consideration after the seller does this more than once.
- Sellers are divorcing, fighting or not agreeing with each other. Certainly sales can occur with a divorce situation, or sellers who are arguing with each other. But, at some point, when the situation becomes untenable, when you are constantly being put in the middle of their fight, you need to think about your options. When one divorcing party clearly defies a court order and does not cooperate, or one sibling has made it clear that they will not agree to sell mom and dad's place, it might be time to throw in the towel.
- Sellers refuse to be reasonable on pricing or making repairs. Pricing today could be a moving target. If the seller does not agree to price adjustments to reflect the current market, and activity is slow or non-existent, then you might be wasting your time. If the seller refuses, either now before a contract, or in response to a contract, to make even the slightest repair, then it might be quitting time.
We never like to lose a listing. It often feels like failure. But in many cases it is not your failure. It is the seller. If they put you in the boxing ring blindfolded with your hands tied behind your back, how do they expect you to win the fight? Without their cooperation, participation and assistance, you might be wasting your time.
So, measure each listing with the above factors, and if the decision is to cancel the agreement, first confer with your broker to determine how you accomplish that.
If you determine that you are worth hundreds of dollars per hour, this will be an easy decision for you. If you determine that you are worth $8 an hour, you will seek to find buyers and sellers who will be ready to act, thus raising your hourly pay.
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July 29th, 2012 at 1:47 pm
The investor buyer has an accepted contract on a property, and plans on listing it either for sale or for lease. Let's assume that the property is vacant. Must they wait until they close on it and have title, or can they list it now?
Certainly, unless the contract they wrote with the seller forbids that activity the buyer has the right to market the property. Yes, it would be better to obtain the sellers permission, especially if the buyer wants access to show the property, but again, that is not absolutely required.
A buyer in escrow, anticipating a successful close, has an equitable interest in the property. While they do not have title to the property, an equitable interest provides them with certain rights, which includes the right to list it for sale or lease.
Any such listing, and certainly any contract they execute with a buyer or tenant must contain a disclosure that the seller is acquiring title but does not yet have title, and a contract for sale or lease should be contingent on the seller or landlord obtaining title. There should be no prepossession, a tenancy could not begin until the client owns the property, and while a buyer might be allowed to do inspections and a walkthrough, they would not be allowed to begin any work or move anything into the property. If a lease requires the landlord to redecorate, repair, paint or clean, that should not commence until after they own the property.
Be sure to discuss any potential transaction such as this with your broker.
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November 8th, 2011 at 12:43 pm
That is a common statement real estate agents make when they are asking their broker for help with a landlord or tenant. While they are involved with the day to day issues of a tenant and landlord, they insist they are not managing the property.
So, what's the problem? The Arizona Revised Statutes identify the activities of a property manager and go on the say that if a licensee is a property manager (by definition) they must execute a Property Management agreement between themselves and the landlord. This is where real estate agents get themselves into trouble.
It is important to understand the activities that constitute property management, and once you recognize them, act accordingly. And, always be certain that your broker allows property management before executing an agreement with a landlord.
Since the question often arises from the agent that listed the property for lease and was successful in getting it rented, we will use that scenario. From the moment you list the property for lease, up until the tenant moves in, all of your activities are considered part of your listing obligations. No problem there. But, once that tenant moves in, and keys and money are exchanged, your obligations as the listing agent end. If you are not managing the property, you should not have any interaction with that tenant and that landlord about that property until that lease is ending. Talking to the tenant about repairs, calling the landlord in Ohio and telling them the tenant needs pest control and any activity like that IS property management and doing that without a valid PM agreement is a violation of state statute.
If your broker allows you to manage properties, great. You may do so under a valid property management agreement yet keep in mind, if you are handling rent monies, that money must be deposited to your broker's trust account or delivered direct to the landlord. You may not deposit those funds to any account other than the trust account or the landlord's account, and you personally may not be in receipt of those funds in any way.
With the sheer number of rentals increasing as a result of our recent market, more and more agents are handling leases. It is critical for any licensee to understand what activities constitute property management, what their obligations are and what they need to do to protect the landlord, tenant and themselves. If you are not sure, you must talk to your broker.
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September 2nd, 2011 at 4:23 pm
Have the rules regarding the MARS disclosures changed?
Our market was not complicated enough before we needed to make disclosures to our sellers that we would not attempt to hurt, scam or lie to them about short selling their homes. But, nonetheless, these requirements for disclosure came on the scene in early 2011 and have been part of the
landscape since.
The original rule from the Federal Trade Commission (FTC) came out in February. Soon thereafter, The Arizona Department of Real Estate (ADRE) enacted additional rules which brought us the 4 MARS disclosures that are required. The MARS disclosures are typically 4 different forms. First is Advertising Disclosure, then the Consumer Disclosure, The Offer-Contract Disclosure and lastly the Lender-Servicer Disclosure. (They will often have slightly different titles from broker to broker if the broker did not use the forms that AAR provided). While all 4 were required there was confusion as to when the agent needed to have them completed.
Needless to say, there was considerable confusion about what we needed to disclose and when. But, as the months have marched on, we now have settled into a moderate routine that does not seem that bad.
In early July, the rules were rescinded…maybe. The FTC announced that although the rules are still in place, they would not enforce them on real estate licensees. When news of this arrived, the citizens rejoiced. No more MARS disclosures. The party lasted only a day or so, before ADRE delivered a message that basically said “…not so fast…” While the FTC relaxed their enforcement, ADRE said that we still needed to make the disclosures, could not charge the seller for short sale negotiation and identified who could negotiate a short sale for a fee.
Was that clear to everyone? No, so what we have now is loose and limited adherence to the MARS disclosure rules, as brokers across the state have interpreted the two statements differently.
Now with the confusion of ADRE and the FTC saying different things, there is more confusion as to if the forms are needed at all, and if so, which ones and when.
Your obligation to be in compliance falls to you and your broker. Thus, if you are listing short sale properties, to insure that you are most current on the MARS disclosures, you need to research as much as you can, and ultimately follow what your broker says. Some brokers have relaxed the rules, while others have maintained adherence to the rule.
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April 16th, 2011 at 4:34 pm
Arizona HB 2001 Signed by the Governor
HB 2001, called the “Jobs Bill” was signed by the governor in late February. With little fanfare or debate, the 214 page bill was approved that will give tax incentives to businesses to help them hire more employees. But, buried within the bill was one funding provision that might increase the property tax on thousands of homes in Arizona.
Here's how it works...Most Residents of Arizona did not realize that their property tax on primary residence, 2nd home and/or vacation home was lowered by a credit from the state general fund to the county in which the property sits. That credit was automatic for all Class 3 properties, which included primary residence, 2nd home and vacation home properties.
This bill changes all that. First, only primary residence homes will be Class 3 properties. 2nd home and vacation home will become Class 4, taxed at a higher rate as rentals. And, here's the kicker. Homeowners will have to “opt-in” for the credit by completing an Affidavit every other even-numbered year, starting in 2012, attesting that they or a family member occupy the home. That affidavit will be mailed with the Notice of Full Cash Value that is typically sent in February of every year. Homeowners will have 60 days to complete and return the affidavit in order to remain as a Class 3 property. If they fail to submit the affidavit, on the 61st day, that property will become a Class 4 property and their tax bill will increase by as much as $600, according to budget estimates.
This bill will provide incentives to businesses even if they do not hire any additional employees. But, this bill will certainly affect thousands of homeowners, already struggling to cover the costs of the home, by increasing their taxes. All owners of 2nd homes and vacation homes will see their taxes increase. Many people who might be entitled to the credit will overlook the form in the mail, or might complete it improperly, and they will see their taxes increase. While they always maintain the right to appeal the valuation of their home, they cannot appeal this re-classification. They would need to wait 2 years before the opt in is available again, when the notices are mailed in 2014 and so on.
For real estate agents and brokers, this is an opportunity to notify every homeowner you know and every buyer who closes in 2011 and beyond. Your information could save them hundreds of dollars and they will thank you for that.
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April 12th, 2011 at 11:36 am
MARS Rules and the Realtor
This should not be any news to you that both the Federal government and the Arizona Department of Real Estate have established rules, guidelines and disclosures that licensed agents must follow when listing a short sale property. These rules are confusing, challenging and oppressive, yet, as licensees, we must follow them.
My only advice here is that as a licensee, if you have a listing right now that is a short sale, or if you believe that anytime in the future you might list a short sale, you must, and I repeat MUST, know the rules, guidelines and disclosures that are needed before you go forward.
One source right now is The Arizona Association of Realtors website, www.aaronline.com and more specifically, at this link…
There you will find the rules and guidelines, as well as suggested disclosure forms for you to use. Until your broker provides specific and detailed information, I suggest that you print Michelle Lind's article regarding MARS and the disclosures that follow it.
Once your review all of that, you might question yourself as to why in the world would you want to assist the seller in negotiating a short sale.
The back-story here is that the Feds and ADRE really want us out of the short sale negotiation business, so they have imposed some extremely burdensome rules to affect that end result.
These rules will constantly be revised so your best source for information is AAR and/or your broker.
Don't ignore this! Our industry is being watched by several agencies and they are itching for a test case of an agent assisting in the short sale and not following the rules and disclosure obligation. Don't be that test case…
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