Fiduciary Duties are Important to First Time Home Buyers

This is Part 4 in my series on Columbia SC real estate agency laws.

In Part One, I expressed the importance of discussing agency relationships with real estate licensees (agents) and agreeing on your business relationship. In Part Two, I wrote about the difference between being a Customer and a Client. Part Three discussed the importance of some sellers and all home buyers becoming Clients.

This installment will discuss your expectations of a real estate agent and their fiduciary duties to you.

If you enter into a written agency agreement, as a Client, you can expect the real estate agent and her/his real estate Company to provide the following client-level services:

1. OBEDIENCE - If, and only if, you have SIGNED an agency agreement with an agent and/or real estate company, the agent is obligated to promptly and efficiently obey all of your LEGAL instructions. HOWEVER, you MUST HAVE a signed agreement to receive this level of client services.


2. LOYALTY - This fiduciary duty obligates a real estate agent to operate and negotiate in your best interest. Unless you have a SIGNED agency agreement with an agent or real estate company, the agent/real estate company is not required to be loyal to you. Therefore, when you walk on that new construction site and begin to sign documentation, remember this................

If you do not have representation with you, the on-site agent is not required to work for your best interest!


3. DISCLOSURE - An agent must disclose all known relevant and material information. For example, your agent should educate you about any factor that might affect the value or desirability of the home being considered for purchase.

By the way, NEVER ENTER INTO A CONTRACT without reviewing the Sellers Property Condition Disclosure Statement. If you are looking at new construction, this property will not be available to you for obvious reasons.

(NOTE -- Not all homes are required to have this document. For a list of exemptions, please feel free to email me at blogger@davidpatterson.net)


4. CONFIDENTIALITY - Unless you give consent, an agent is obligated to safeguard your personal information and your ability/willingness to pay more for a home than your offer price. However, if you do not have a signed agency agreement with a real estate agent or company.....

"ANYTHING YOU SAY CAN BE USED AGAINST YOU........" (Know Your Rights!)


5. ACCOUNTING - An agent and their real estate company is obligated to account for all money, deeds, documents and/or any other property given to them by you. For example, I have a client from Virginia that is moving to our area. In an effort for me to work on her behalf, she entrust me and Russell & Jeffcoat with $1250. This money is to be held in earnest and for payment of required inspections.

When hiring an agent, you must hire someone trustworthy! $1250 is not a trivial amount to being handing over to any Tom, Teresa, Dick, Denise, Harry or Harriet!


6. Reasonable Care and Skill - This is the most ignored duty by first time home buyers! Just because you have a friend or acquaintance that has their real estate license, that does not equate to possessing the skill necessary to fulfill this and the aforementioned fiduciary duties.

An agent is obligated to use reasonable care and diligence when representing you. You should expect a standard of care that only a COMPETENT real estate PROFESSIONAL can exhibit.

You should hire someone with superior skill and knowledge of the real estate market. No agent can possess superior skill AND knowledge by having closed only 1-4 transactions in their career.

You need to hire professionals such as an Accredited Buyer Representative, a Certified Residential Specialist or a real estate professional that has closed at least 25 transactions.

In my opinion, I would not want to be in the courtroom with an attorney that has never represented someone on trial for their freedom. That same mindset should be used in hiring a real estate agent.

In Part Five of this series, we will discuss Columbia SC Real Estate Types of Agency.

Obama Endorsed by The State Newspaper in Columbia, South Carolina

It's official! After a stimulating and, at times, heated debate in Myrtle Beach, South Carolina, The State Newspaper has endorsed the presidential campaign of Senator Barack Obama from Illinois.

What is your reaction to this news? Please post your comments.

Staff Writer Ben Smith with The Politico reported this endorsement news on his blog. One of the reactions included the following quote...

"I am a Republican and would gladly work with Obama......."

Congratulations Senator Obama! I wish you much success on this journey called life and your pursuit to become the 44th President of the United States of America.

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First Time Home Buyers Should Be Clients

This is Part 3 in my series on Columbia South Carolina real estate agency laws.

In Part One, I expressed the importance of discussing agency relationships with real estate licensees (agents) and agreeing on your business relationship. In Part Two, I wrote about the difference between being a Customer and a Client.

This installment will discuss the importance of some sellers and all home buyers becoming Clients. Clients receive more services from real estate licensees than customers.

If you are a first time home buyer, I STRONGLY ENCOURAGE YOU to hire an Accredited Buyer Representative (ABR). There are ABR's that will work with you for FREE*! How can you beat that?

A seller becomes a client of a real estate company by signing a formal listing agreement with the Company. For a seller to become a client, this agreement must be in writing and must clearly establish the terms of the agreement and the obligations of both the seller and the Company which becomes the agent for the seller.

A buyer becomes a client of a real estate Company by signing a formal buyer agency agreement with the Company. For a buyer to become a client, this agreement must be in writing and must clearly establish the terms of the agreement and the obligations of both the buyer and the Company which becomes the agent for the buyer.

Let me take a moment and place emphasis on the previous paragraph. If you do not have a signed agreement from a real estate company or associated licensee, they are not required to work in your best interests!

For example, if you visit a new construction site and meet the on-site agent, they are talking to you with the best interest of the builder/seller in mind. Why do I know this? It's their Fiduciary Responsibility to represent the best interests of the builder/seller.

If you give that on-site agent information about yourself without representation, that agent has a legal duty to share it with the builder/seller. What you don't know about how they use your information could hurt you!

There are several examples of current homeowners that would never buy a new home again without the help of an Accredited Buyer Representative or Certified Residential Specialist. The ABR and CRS Designee is trained on representing and negotiating for your best interests!

Let me say this again...............If you are looking to buy a home, GET REPRESENTATION! Bad things can happen to you that could take years and thousands of dollars to correct.


In Part Four, we will discuss the fiduciary services that Clients should receive from their licensee (agent) and the real estate Company.



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Attention 2007 Home Buyers! - Remember Your Tax Deduction

As the sun rises on this morning, I am reminded of the 2007 Federal Income Tax Filing Deadline that is three months from today.

One of my annual January mailings that keep me in touch with my clients is their HUD-1 Settlement Statment from the previous year. If my clients purchased a home in 2007, they will be receiving this mailing.

Later in this month, I will be including a little extra note in the annual mailing. Do you remember the Tax Relief and Health Care Act of 2006?

This signed legislation will allow 2007 homebuyers to deduct premiums paid for mortgage insurance - which typically is required when homebuyers purchase a home with less than a 20% down payment.

This new insurance premium deduction will only apply to mortgage insurance contracts issued in 2007 and is only available to taxpayers whose adjusted gross income does not exceed $110,000 ($55,000 for married taxpayers filing separately).

What did you say? ---- You didn't purchase a home in 2007. ---- NO PROBLEM!

Legislation has been passed extending the tax deduction for private mortgage insurance through 2010.

For more information about H.R. 6111 (look in Act 419-Code 163-6050H) , contact your CPA or tax attorney.

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43 Years Young - Russell and Jeffcoat Realtors

In 1965, Bob Russell announced the opening of Bob Russell Realty and Abb Jeffcoat, Jr. became a member of the Russell Realty Team. Over 40 years later, Russell and Jeffcoat has become the largest listing and selling real estate company in metropolitan Columbia, South Carolina.

Russell and Jeffcoat is also recognized as one of the leading independent residential real estate firms in the Southeast Region of the United States.

Below is a commercial released by Russell and Jeffcoat

You Are A Customer - Columbia SC Real Estate Agency Laws

This is Part Two in my series on Columbia South Carolina real estate agency laws.

In Part One, I expressed the importance of discussing agency relationships with real estate licensees (agents) and agreeing on your business relationship.

Unless you have signed an Agency Agreement with a real estate licensee, you are a Customer.

South Carolina license law defines customers as buyers or sellers who choose NOT to establish an agency relationship. The law requires real estate licensees to perform the following basic duties when dealing with any real estate buyer or seller as Customers:

• Present all offers in a timely manner
• Account for money or other property received on your behalf
• Provide an explanation of the scope of services to be provided
• Be fair and honest and provide accurate information
• Disclose "adverse material facts" about the property or the transaction which are within the licensee's knowledge

Unless or until you enter into a written agreement with a real estate Company for agency representation, you are considered a "Customer" and a real estate Company or a licensee will not act as your agent!

As a Customer, you should NOT expect the Company or its licensees to promote your best interest, or to keep your bargaining information confidential.

In Part Three of this series, I'll discuss the importance of establishing a client relationship with a licensee EARLY in the process.




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How to Determine Whether Your Loan Officer is Reputable

Guest Contribution from Jorge Merlos
Integrity Home Finance-Rancho Cucamonga, CA
Phone: 909.945.8621 / jmerlos@ihfinance.com



In slower markets, some loan officers may feel pressured to close deals that aren't in the homeowner's best interest. In order to avoid getting into difficult and financially compromised positions with their mortgages, borrowers are well advised to be acutely aware of the signs of a responsible loan officer when selecting a mortgage professional.



First, look for a Mortgage Planner whose values are focused on helping individuals to achieve their financial goals in both the fastest and the safest way possible. A reputable Mortgage Planner will show you the numbers associated with the proposed loan and provide you with concrete information that backs up his or her claims. Review all of the numbers. If they don't add up, ask for clarification. If your loan officer can't or won't answer your questions, move on--without the loan.


Secondly, a responsible Mortgage Planner will present you with financial information that goes beyond the point of the transaction, and will illustrate the total cost of the loan over time. If your loan officer is focusing only on rates and fees, you may be working with someone who's looking out for his or her own best interests, not yours.



Responsible Mortgage Planners will also tailor their strategies to fit your unique situation. In other words, they always take your personal financial goals into account. No one should try to place you into a loan without knowing the intricacies of your personal financial situation.


Finally, if your loan officer is advising you on issues other than mortgages, you could be working with someone who is compromising your best interests. Issues like investment rates of return and real estate appreciation aren't the areas of expertise for the vast majority of mortgage professionals and should be left to the professionals who have training and direct experience in those areas.


When seeking a loan officer, look for someone who specializes in mortgage planning, which is the process of evaluating a borrower's unique financial situation and advising the borrower on a loan that best suits his or her individual needs and goals. If your loan officer is trying to put you into a loan without evaluating how that loan will effect your entire financial situation--including debt management, tax benefits, investment goals and net worth--it's quite possible that you're only getting half of the picture.

The bottom line is that your mortgage representative should always be looking out for your best interests, regardless of market conditions.

David's Footnote: For more information on Columbia, South Carolina loan officers, CLICK HERE.

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30 Things Before Putting Your Home on The Market

Guest Contribution from Jill Wente, Realtor
Prudential Gary Greene - Spring, Texas
Phone: 281.804.8626 / jwente@garygreene.com




Top 30 things to do before putting your home on the market. Make your home's "First Impression" its "Best Impression"

1. Trim your shubbery





2. Add color with flowers and potted plants





3. Powerwash the front sidewalks and driveway





4. Clean the pine needles from the roof





5. Repaint to a neutral color walls with vivid colors





6. Wash the windows





7. Refinish your front door and polish the hardware





8. Get a new door mat that says "Welcome"





9. Clean up after your pets
   




10. Organize the garage to make the space seem larger




11. Make sure all your light bulbs are working and replace any burnt out ones




12. Replace old, stained, worn out carpet. If they don't need replacing have the carpets professionaly steam cleaned





13. Remove excess furniture that make your rooms look small
    




14. Wipe down the walls. If the walls need more than a thorough cleaning, apply a fresh coat of paint.




15. Powerwash the exterior of the home



16. Set out "show towels" in the baths



17. Clear away the items on your sink vanities and store them in the cabinet.



18. Get as much stuff off the floors in your closets as possible. Thin out your hanging clothes. Neaten up the things on your closet shelves. These actions will make your closets look larger.





19. Depersonalize your home. Put away family photos, sports trophies and yoru collectibles.
    
    



20. Organize your pantry



21. Remove all the items from the top of your kitchen counters. Only leave out those items that you absolutely use on a daily basis



22. Remove everything from the top, front, and sides of the refrigerator.





23. Repair or replace any leaky faucets



24. Make your fireplace the focal point of the room instead of the television



25. Dust all the light fixtures



26. Recaulk the grout around your shower and bathtubs


27. Clean your tile grout


28. Check all the ceilings for water stains. If an active leak exists repair it. If the stain is from an old repaired leak, repaint the ceiling.





29. Dust the baseboards
    


30. Freshen the air by deodorizing pet areas

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Lexington South Carolina Approves Sex Offender Ordinance

The Lexington Town Council approved an ordinance that would effectively ban registered sex offenders from moving to Lexington.

The council made its decision after a favorable opinion from the state attorney general.

The ordinance would also prevent sex offenders from living or loitering within 2,000 feet of schools, churches, parks, playgrounds and other sites where children might gather.

State Attorney General Henry McMaster says the rule would likely stand up if challenged in court.

Click Here for more video about this story.

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Open Letter to the 2009 Outback & Capital One Bowl Committees

Dear 2009 Outback & Capital One Bowl Committees:

According to a published report in USA Today, your bowl game is a competition between the Big Ten Conference and the Southeastern Conference.

This is just a quick note to remind you of The Ohio State University Football Program bowl record against Southeastern Conference Football Programs. That would be ZERO for 9!

If you would like to present a competitive game in which the outcome is in doubt, please do not invite The Ohio State University Football Program to participate in your 2009 game.

Your consideration is greatly appreciated.

Sincerely,

David A. Patterson
Supporter of Competitive College Football Bowl Games

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Hey BCS! No more Oklahoma Sooner Games!

Oklahoma Fans! Be prepared to get MAD!

The BCS should have done their research............

Oklahoma is ZERO for 4 in their last four BCS games! They've won as many BCS games as my family since 2004. You don't believe me..... Here's the history.......

Fiesta Bowl 2008 - West Virginia 48 Oklahoma 28 (without Steve Slaton)

Fiesta Bowl 2007 - BOISE STATE 43 Oklahoma 42 (Note: Boise State is in the same conference that produced Hawaii. Hey, Hawaii.... How did Sugar Bowl 2008 work for you?)

Orange Bowl 2005 - USC 55 (yes 55) Oklahoma 19

Sugar Bowl 2004 - LSU 21 Oklahoma 14

After watching USC's, Georgia's and WVU's performances and watching the last four BCS performances of the Oklahoma Sooners, the BCS Committee should have their heads checked.

I know. I know. Oklahoma won the Big 12 Championship. Hey Missouri! You let down the whole country. We needed you in the Fiesta Bowl. This happened on your watch!

Unless proven otherwise, Oklahoma is not a Bowl Championship Series team.

For Oklahoma fans, here's wishing you better days for the football program.

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2008 Resolution #9 - Obtain My Real Estate License

Guest Contribution from Darleen McCullen, Broker
Keller Williams Realty - Raleigh, North Carolina

Phone: 919.454.8864 / darleen@darleenmc.com

So...you're thinking of obtaining a real estate license. If you're enrolled in a real estate school, no doubt, you are studying hard and may be seeing visions of monstrous commission checks and living large.

Hold your horses, my friend! Don't jump in feet first. There are some things you may wish to consider before quitting your Day Job. Here are 5 things I wish someone would've told me:

1) Have at least 6 to 12 months of living expenses saved. You may need it! Since real estate is a 100% commission business, there will be up and down months. During those down times, your bills will still need to be paid. (It would look awful if you, as a REALTOR®, are selling the American Dream - but you're unable to pay your mortgage and other living necessities, wouldn't it?)

2) If you're planning to join a real estate company, do your homework. It's wise to interview a number of agents who currently work within the firm - as well as past agents if you are able to locate them. (The current agents more than likely will tell you all the things they like about the company - but the past agents may offer some insight as to why they left. )

Also, if you're new to the business, you're going to need training. And potentially lots of it. Real estate is a contact sport - and no two transactions are alike. (Ask any of the seasoned professionals. They'll tell you!) The more training you have, the better your chances are at being able to negotiate your way through complicated situations.

There are some firms that offer new agents very little training - and it's literally sink or swim. While it does take drive and initiative to succeed in real estate, it also takes training and sometimes a shoulder to lean on when you have questions or get discouraged.

3) Start making a list of everyone who know, love, and trust you. These people could potentially be your first clients or know someone who is looking to buy or sell property. With them, you won't have to build trust - it's already there. Send a mailing to these individuals. Here's a Sample Letter I sent to my contacts. Feel free to modify it and use it as your own.

4) Have some money set aside for marketing. When I first got into the business, I relied heavily on prospecting for new business and my sphere of influence - but did not market to those individuals I didn't already know (what is known as a farm). Taking a two-tier approach would've been helpful to build my business faster.

5) Sales is about building and maintaining relationships. It's also about rejection. So you must have a tough skin and not take things personally. There are going to be those people who you consider friends who may not use your services. I have read many blogs on ActiveRain of agents whose friends and family decided to go with another firm. It happens. Someone in real estate once said to me: "Some will. Some Won't. So What? Who's Next?"

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