Free Credit Reports:

Massachusetts residents have access to free credit reports from the three big bureaus – Equifax, Experian and Trans Union. This free access should help consumers keep track of any inaccuracies or omissions in their credit files that could depress their credit scores and raise the cost of the mortgage money they need to purchase a home.

 

This central site allows you to request a free credit file disclosure, commonly called a credit report, once every 12 months from each of the nationwide consumer credit reporting companies: Equifax, Experian and TransUnion.

https://www.annualcreditreport.com/cra/index.jsp

Credit Scoring Issues

Credit scoring has become a serious issue in the lending community and it can affect your ability to obtain or refinance your next mortgage. Credit scoring systems can gauge a mortgage applicant’s credit rating and assign an interest rate and risk value based upon information provided in the loan application. It offers several advantages – quick recommendations while taking human judgment out of the equation, efficient and, usually, inexpensive.

Fannie Mae Credit Scoring Information

Feature Story from REALTOR Magazine

Underwriting Innovation
Knowing the Credit Score

Quick loan approval or busted deal—
a buyer’s credit score can be the deciding factor. 

BY CHRISTOPHER M. WRIGHT

Why do practitioners need to worry about a technical subject like credit scoring?… Read on

Hey there, smarty pants! School is back in session and a great way to get in the spirit is by taking our little real estate pop quiz. It is designed to make you think, help you learn and celebrate what you already know. So, if a train is traveling north at 50 mph and a second train is headed south at 20 mph… just kidding.

Take your best shot and then go to our on-line adobe pdf answer sheet to view or print out the answers and explanations!

1. My agency relationships end….

A. When the deal closes
B. If the buyer or seller ‘fires’ me [although I’m sure this never happens] C. When the listing agreement or buyer agreement expires
D. Agency relationships don’t end.
E. A and C
F. A, B and C

2. I should check ‘Side Agreement’ on the MLS input form when

A. The seller pays a different / lower commission to me if I sell it in-house and there is no cooperating REALTOR®
B. Some buyers are excluded from my exclusive contract and offer of compensation
C. There are variable commission rates.
D. All of the above

3. If I have a listing with a side agreement and a buyer’s agent asks me about it, what do I have to say?

A. Say nothing, it could burn me.
B. Confirm that there is a side agreement, but do not disclose the details without the sellers permission
C. Disclose the differential that would result in a sale through an in-house buyer versus a cooperating broker

4.… Read on

First, you must hold a Massachusetts Real Estate Broker’s License in order to be a principal in a real estate firm in Massachusetts. Starting a business can sometimes seem like an uphill climb. You must plan each step before you take it. Once a business plan is developed, you must consider more than production, marketing, and accounting. You must also consider the legal environment and government regulation of business and the related forms necessary to comply with regulation.

This is just a guideline and is not a substitute for the professional advice of your attorney, accountant, insurance agent or business manager / coach. It is simply a mechanism to help you to start thinking of the many facets that go into opening a successful real estate business in our region.

There are many links to more information for your convenience, and we have tried to organize it to be an effective planning tool. Other wonderful resources are the Small Business Administration’s Starting a Business Guide and Start-up Nations 10 Steps to Business.

Get Ready – Research Stage

• Thoroughly research the real estate market – View trends and economic forecasts to help determine business feasibility. To be successful, you must have a clear understanding of the market, your competitors and your strengths in order to figure out what areas you should target, what skills you should market, and if there are resources that would help you penetrate that market better. This research will allow you to learn how to compete successfully and meet your financial objectives.

In reading the Purchase and Sale Agreement, did you ever wonder why the seller doesn’t have the ability to terminate the contract if the title 5 fails inspection?   Shouldn’t they have the ability to get out, especially if they can’t afford to fix it?

Here’s why: Nowhere in the P&S contract – or in the law – does the seller commit to pay for any upgrade or repair of the system.   The buyer can withdraw from the contract simply because he/she may be exposed to greater costs then anticipated, much like the home inspection clause.   Within 2 years of the inspection, the “owner” is responsible for compliance with title 5.

The seller, buyer [and occasionally the mortgage lender] will decide who will pay for the costs of the repair through negotiations of a P&S agreement.

According to the Purchase and Sale agreement, the only thing the seller is obligated to do is (1) get an inspection and (2) provide the buyer with a copy of the inspection report.   It makes a whole lot of sense to request that the seller perform the inspection at the ONSET of your listing agreement rather than after a P&S is executed.   Why?

If the seller and all potential buyers knew, at the beginning of the process that there were septic repairs needed, the offers and negotiations would be “reality based”, instead of a huge surprise and renegotiation during a tight inspection period.

In a nutshell, the seller need not accept the buyer’s request to [help] pay for repairs, and therefore does not need to be provided with an escape clause.  … Read on

Notes from the Attorneys of the Massachusetts Association of REALTORS Legal Hotline

Q. I have a rental listing and the owner of the unit was very clear when I took the listing that they did not want any animals of any kind in the apartment.   With that understanding in mind, I placed an ad in the local paper describing the unit and put the words “no animals” in the advertisement.   When I got into the office this morning there was a voice mail message from a nonprofit fair housing group telling me that I should change the ad immediately.   They said that the words “no animals” could be viewed as discriminatory because some people require the assistance of service animals.   What should I tell my landlord?

The most expeditious way to address this is to let the landlord know about this issue and change the ad to say “no pets”.   There are many physically challenged individuals who rely on seeing-eye dogs, hearing dogs, service monkeys and other specially trained animals.   These animals are not pets but are, in fact, service animals and more akin to an aid such as a cane or a hearing aid.   Refusing to rent to a person because they have a service animal is inconsistent with state and federal fair housing laws and can result in injunctive relief, civil damages and penalties.

Q. I am renting a first floor unit in a two family home.   A prospective tenant has called to inquire about the apartment and told me that she sometimes uses a wheelchair and, if she decides to rent the unit she will need a ramp installed.  … Read on

Notes from the Attorneys of the Massachusetts Association of REALTORS Legal Hotline

Q. I was working with a buyer for several months. I thought I had the buyer’s loyalty, though we didn’t have an exclusive buyer agency agreement. While we were in the process of executing an offer, the buyer suddenly stopped returning my calls and I haven’t heard from him since. According to public records, the buyer purchased the property a month later, and a different brokerage company was listed in MLS as the selling company. Am I the procuring cause of this sale and entitled to a commission?

A. You will need to file a request for arbitration with your local board to determine if you are entitled to a commission. Procuring cause is a complex issue. NAR’s Code of Ethics and Arbitration Manual provides an extensive list of factors an arbitration panel should consider when hearing a case. You cannot rely on any single factor to determine who was the procuring cause of a sale. An arbitration panel will base its decision on the full set of circumstances surrounding a specific case and must weigh each factor against the others.

The Law and Policy section of REALTOR.org has the Arbitration Guidelines in the Code of Ethics and Arbitration Manual (Appendix II to Part 10), which include analyses of 12 situations. Your situation may be similar to one of these situations and might help you determine if you want to file an arbitration request.

Q. I have an agreement with a buyer as their exclusive buyer agent.… Read on

“When representing a buyer, seller, landlord, tenant, or other client as an agent, REALTORS® pledge themselves to protect and promote the interests of their clients. This obligation to the client’s interests is primary, but it does not relieve REALTORS® of their obligation to treat all parties honestly.” (from Article 1 of the 2006 REALTORS® Code of Ethics)

“REALTORS® shall submit offers and counter-offers objectively and as quickly as possible.” (Standard of Practice 1-6)

Perhaps no situation routinely faced by REALTORS® can be more frustrating, fraught with potential for misunderstanding and missed opportunity, and elusive of a formulaic solution than presenting and negotiating multiple purchase or lease offers and/or counter-offers on the same property. Consider the competing dynamics. Listing brokers are charged with helping sellers get the highest price and the most favorable terms for their property. Buyers’ brokers help their clients purchase property at the lowest price and on favorable terms. Balanced against the Code’s mandate of honesty is the imperative to refrain from making disclosures that may not, in the final analysis, be in a client’s interests. (Revised 11/01)

Will disclosing the existence of one offer make a second potential purchaser more likely to sign a full price purchase offer—or to pursue a different opportunity?

Will telling several potential purchasers that each will be given a final opportunity to make their best offer result in spirited competition for the seller’s property—or in a table devoid of offers?

What is fair?
What is honest?
What is to be done?
Who decides?… Read on

You Said WHAT?

Real estate is and always has been a very competitive business. The multitude of firms that are active in the business in most markets, the entrepreneurial spirit that is a trademark of the sales people who make up the bulk of the industry, and the relative easy entry into the real estate business combine to insure competition. Over the years the real estate business has benefited from that aspect by seeing the different possible business models employed by competitors. Successful innovations take root and spread among the industry. Less successful ones fall by the wayside.

Our industry finds itself in another period where new business models are being introduced. That increases challenges and competition, just as new models have in the past. The law and our Code of Ethics serve to assure that consumers have the complete and accurate information they need to make their marketplace decisions. In the end, consumers decide which business methods will prevail and survive and which will fail. That, of course, is the heart of the REALTOR® association’s antitrust compliance program.

One of the bedrock principles of antitrust compliance is that neither associations nor their members collectively set the price of services provided by real estate professionals. That is a decision that is made independently by each firm.

This means they should never respond to a question about fees by suggesting that all competitors in the market follow the same pricing practices or to a policy of the local board or association of REALTORS that supposedly prohibits or discourages price competition.… Read on

 What is the Do-Not-Call Registry?

The cold-calling activities of real estate professionals after October 1, 2003 will need to comply with the requirements of the new federal do-not-call registry, based on rules issued by the Federal Communications Commission (“FCC”). While the federal do-not-call registry contains exemptions, these do not cover the telemarketing activities of real estate professionals. Any exemptions found in state law for real estate professionals are now eliminated and compliance with the federal “do-not-call” registry is now required by real estate professionals who engage in telemarketing.

Do I have to check the list for all sales calls I make?

Please refer to your office policy for the specific steps you must take when calling consumers regarding real estate services. There are several generic steps an agent should to take to ensure compliance:

A company can call any residential number in three (3) instances:

1. if there is a personal relationship with the consumer (“personal relationship” is defined as “family member, friend, or acquaintance of the telemarketer making the call”);
2. if the consumer’s express written invitation or permission to call, or
3. if the company has an “established business relationship” (“established business relationship” is defined as “existing clients and customers”. This relationship extends for up to 18 months after the end of a transaction. If a consumer makes an inquiry, the telemarketer can call the person for up to three months after the inquiry. There is no limit on what you can discuss with the consumer during those three months. Thus, other listings could be discussed with the consumer over the next three months.