This past Tuesday was the Spring Vernal Equinox-welcome to spring! The weather outside reminds me of July. It’s warmer in Traverse City than in Brownsville Texas by 10 degrees. The market is "hot" as well. I hear reports that the time change and warm weather have agents working overtime to keep up with their clients. We’re making hay while the sun shines.
Thank you so much for all of your new questions, comments and feedback. I do enjoy reading them and researching answers for upcoming editions! Here are this week’s questions:
I have a prospective buyer that wants to see a home in a neighborhood that I consider to be very dangerous. However, this neighborhood is primarily made up of a number of ethnic minorities. What can I do?
A Prudential agent should never refuse to show (or even discourage a buyer from seeing) a particular house that a buyer/client has asked to see based upon the agent's assumption that the buyer would not like the neighborhood. Historically, a large number of Fair Housing Act cases have involved agents who have allegedly steered clients to particular neighborhoods where the agent thought the client would be “most comfortable.” If a client makes a specific inquiry about crime statistics, the Prudential agent should not offer their own perceptions as to an area, but should refer the client to places where official statistics may be available. Any search engine, like Google, will work great.
Hey, Jim- I have a question for you. I'm a dual agent on a transaction. Do I have to fill out a Buyer Agency Addendum (where a buyer's agent is asking for a commission to be paid at close from the seller) when I have a Listing Agreement stating what the seller will pay at close for commission?
A solid question! Please note that your office manager can always require any form that they feel is necessary, so please defer to your own office rules.
That being said, from my desk, you would not need the Buyer Agency Form (#BAA). This form is designed to reinforce the verbiage in the Buyer’s Agency Contract and the cooperative agreement agreed to between brokers through the MLS system. It would be redundant to sign this form since Prudential is the only broker involved. The BAA discloses, to the buyer and seller, that these fees are to be paid to the broker (a fact that many times gets overlooked until closing). What I really like about this form is that if there is a special increase/reduction in the commission(s) paid before or after the closing these can be noted here - in writing and in clear view for both parties. Line #3 gives you plenty of room to define all details of the modification.
Clearly written and signed contracts/addendums are the tools that we use to protect all parties to the transaction in the world of “Best Practices” for the Prudential agent. I suggest using any form available to accomplish this goal.
Is that talking out of both sides of my mouth or what? Clear as mud, right?
Jim – I have a cash buyer that made an offer just a week ago and placed $125,000 earnest money deposit (EMD) into the company earnest money or trust account. It is a $482,000 sale. The offer was accepted by the seller on March 17th. Yesterday, the buyer called and asked for a return of $50,000 of the EMD to help them purchase new furniture for the home (a great indication that they will close). I did an addendum to the buy and sell agreement reducing the EMD from $125,000 to $75,000. All involved parties have agreed to the change. The original check was certified funds drawn upon a well-known bank in Canada. How soon can I get the check from accounting so I can overnight it back to my buyers?
Tom - are you just testing me? I checked the pending report and I did not see a $482,000 sale with Tom Rich's name on it. However, this sounds exactly like a scam that's been going on for a few years now.
The Prudential Accounting Department has a policy in place to address this issue. All agents should be aware of this policy: ANY EMD (whether certified, money order and/or cashier’s check) is subject to a 10 day hold on the funds to ensure that they clear the account. If it’s an out of the country certified check, it may be subject to a 30 day hold to ensure the funds have cleared. Yes, there have been times when a certified check is returned by the bank. I learned something new on this one too.
Best practices would look for a check drawn upon a Michigan Institution (or at least a US Institution that can ensure payment.) There really is no payback/refund to the monies and accounting reserves the right to hold the monies or decline such a request.
Until next week, go sell something…