Part 8 in the Realtor Code of Ethics Series – Article 11

Part 1   Part 2  Part 3 Part 4 Part 5 Part 6 Part 7

Article 11 of the  REALTOR Code of Ethics mandates that members practice within their competence level of the real estate disciplines in which they engage.  Most members achieve competence in one or 2 areas, like residential or land, but may know nothing about other areas such as commercial or industrial property.  A true professional will not take on something she can’t handle; for instance a seasoned residential agent would probably be uncomfortable taking a listing on a high-rise office building or negotiating a commercial lease, and should probably refer such transactions to someone more competent.  Article 11 and its Standards of Practice clarify these situations:

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Article 11
The services which REALTORS® provide to their clients and customers shall conform to the standards of practice and competence which are reasonably expected in the specific real estate disciplines in which they engage; specifically, residential real estate brokerage, real property management, commercial and industrial real estate brokerage, land brokerage, real estate appraisal, real estate counseling, real estate syndication, real estate auction, and international real estate.

REALTORS® shall not undertake to provide specialized professional services concerning a type of property or service that is outside their field of competence unless they engage the assistance of one who is competent on such types of property or service, or unless the facts are fully disclosed to the client. Any persons engaged to provide such assistance shall be so identified to the client and their contribution to the assignment should be set forth. (Amended 1/10)

• Standard of Practice 11-1

When REALTORS® prepare opinions of real property value or price, other than in pursuit of a listing or to assist a potential purchaser in formulating a purchase offer, such opinions shall include the following unless the party requesting the opinion requires a specific type of report or different data set:

1. identification of the subject property
2. date prepared
3. defined value or price
4. limiting conditions, including statements of purpose(s) and intended user(s)
5. any present or contemplated interest, including the possibility of representing the seller/landlord or buyers/tenants
6. basis for the opinion, including applicable market data
7. if the opinion is not an appraisal, a statement to that effect (Amended 1/10)

• Standard of Practice 11-2

The obligations of the Code of Ethics in respect of real estate disciplines other than appraisal shall be interpreted and applied in accordance with the standards of competence and practice which clients and the public reasonably require to protect their rights and interests considering the complexity of the transaction, the availability of expert assistance, and, where the REALTOR® is an agent or subagent, the obligations of a fiduciary. (Adopted 1/95)

• Standard of Practice 11-3

When REALTORS® provide consultive services to clients which involve advice or counsel for a fee (not a commission), such advice shall be rendered in an objective manner and the fee shall not be contingent on the substance of the advice or counsel given. If brokerage or transaction services are to be provided in addition to consultive services, a separate compensation may be paid with prior agreement between the client and REALTOR®. (Adopted 1/96)

• Standard of Practice 11-4

The competency required by Article 11 relates to services contracted for between REALTORS® and their clients or customers; the duties expressly imposed by the Code of Ethics; and the duties imposed by law or regulation. (Adopted 1/02)

Related articles

• The Realtor Code of Ethics – What consumers and Realtors should know – Part 7 (spake.com)

The Realtor Code of Ethics – What consumers and Realtors should know – Part 8 is a post from: Memphis Real Estate Buzz Blog

The week’s best real estate stories:

• Short-Sale Fraud by Realtors
  From Jim the Realtor, in Southern California. The way short sales work.
• Buying more beneficial than renting in 64% of metros | HousingWire
  In 64% of metro areas nationwide, buying a home is a better financial decision than renting for residents planning to stay in their home for at least three years, Zillow claims in a new report. 
• The Pleasures and Pitfalls of Frank Lloyd Wright Homes – WSJ.com
  For those willing to accept the challenge of owning a dwelling designed by America’s most-famous architect, there are about 20 Wright homes currently up for sale in eight states.
• Is It Better to Rent or Buy? It Depends on Location and Time
  There are many difficult choices to make when deciding whether to rent or buy a home, but one of the most important factors is also among the easiest to determine: How long do you plan on staying in the home or neighborhood under consideration?
• Tightened lending standards improve credit quality
  Tighter lending standards have improved the housing market to pre-housing bubble norms, with only 2.5% of mortgages originated in 2010 becoming delinquent within their first three years, an article in the Chicago Tribune reported.
• Is an FHA Loan Right for You?
• CoreLogic: Real estate recovery is locally driven
  I have been saying for years: All real estate is local, and even micro-local

All my curated real estate links are archived at http://delicious.com/joespake/realestate. What are your thoughts? If you are interested in one of these stories, start a conversation in the comments section below.

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RE Buzz – Real Estate News Roundup – May 21, 2013 is a post from: Memphis Real Estate Buzz Blog

The week’s best real estate stories:

• Realtor.com Upgrades Listings Database to Continue to Provide the Industry’s Most Accurate Housing Data
• Low Credit Scores Hold Back Many Borrowers | Realtor Magazine
• Realtor.com to Ramp Up Data Accuracy | Realtor Magazine
  Realtor.com has made several upgrades to its listing database that are all aimed at providing the industry’s most accurate housing data. Data accuracy is where all the big national real estate portals fail. Consult a local Realtor!
• Sellers: Make a Better Offer, Without Contingencies | Realtor Magazine
  As the inventory of for-sale homes remains at low levels, sellers are getting more comfortable at the bargaining table and telling buyers to cool it with the contingencies.
• 5 Bob Vila ‘Must Do’ Projects for May
• Hiring A Realtor
  Useful information for consumers
• 5 Homes Jay Gatsby Would Love
  “… It was a factual imitation of some Hotel de Ville in Normandy, with a tower on one side spanking new under a thin beard of raw ivy, and a marble swimming pool and more than forty acres of lawn and garden. It was Gatsby’s mansion.”
• Retirees Face Unique Loan Qualifications | Realtor Magazine
  More and more retirees looking to obtain a home loan may find that solid retirement accounts and a sterling credit rating are not enough.
• Student loan debt situation mirrors the housing market | REwired
  Education debt is out of control, and young adults are finishing college with the equivalent of a mortgage or at least a downpayment in debt.

All my curated real estate links are archived at http://delicious.com/joespake/realestate. What are your thoughts? If you are interested in one of these stories, start a conversation in the comments section below.

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RE Buzz – Real Estate News Roundup – May 14, 2013 is a post from: Memphis Real Estate Buzz Blog

Part 7 in the Realtor Code of Ethics Series

Part 1   Part 2  Part 3 Part 4 Part 5 Part 6

Article 10 addresses discrimination

Article 10 of the Realtor Code of Ethics begins the section entitled Duties to the Public.  The article goes beyond US Fair Housing laws in mandating that Realtors not deny equal professional services to, nor be parties to discrimination against, any person for reason of race, color, religion, sex, handicap, familial status, national origin, or sexual orientation. The article and standards of practice cover most aspects of real estate professionalism – dealing with consumers, providing information, advertising, and hiring.

 Article 10

REALTORS® shall not deny equal professional services to any person for reasons of race, color, religion, sex, handicap, familial status, national origin, or sexual orientation. REALTORS® shall not be parties to any plan or agreement to discriminate against a person or persons on the basis of race, color, religion, sex, handicap, familial status, national origin or sexual orientation. (Amended 1/11)

REALTORS®, in their real estate employment practices, shall not discriminate against any person or persons on the basis of race, color, religion, sex, handicap, familial status, national origin, or sexual orientation. (Amended 1/11)

• Standard of Practice 10-1

When involved in the sale or lease of a residence, REALTORS® shall not volunteer information regarding the racial, religious or ethnic composition of any neighborhood nor shall they engage in any activity which may result in panic selling, however, REALTORS® may provide other demographic information. (Adopted 1/94, Amended 1/06)

• Standard of Practice 10-2

When not involved in the sale or lease of a residence, REALTORS® may provide demographic information related to a property, transaction or professional assignment to a party if such demographic information is (a) deemed by the REALTOR® to be needed to assist with or complete, in a manner consistent with Article 10, a real estate transaction or professional assignment and (b) is obtained or derived from a recognized, reliable, independent, and impartial source. The source of such information and any additions, deletions, modifications, interpretations, or other changes shall be disclosed in reasonable detail. (Adopted 1/05, Renumbered 1/06)

• Standard of Practice 10-3

REALTORS® shall not print, display or circulate any statement or advertisement with respect to selling or renting of a property that indicates any preference, limitations or discrimination based on race, color, religion, sex, handicap, familial status, national origin, or sexual orientation. (Adopted 1/94, Renumbered 1/05 and 1/06, Amended 1/11)

• Standard of Practice 10-4

As used in Article 10 “real estate employment practices” relates to employees and independent contractors providing real estate-related services and the administrative and clerical staff directly supporting those individuals. (Adopted 1/00, Renumbered 1/05)

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Related articles

• The Realtor Code of Ethics – What consumers and Realtors should know – Part 1 (spake.com)
• The Realtor Code of Ethics – What consumers and Realtors should know – Part 2 (spake.com)
• The Realtor Code of Ethics – What consumers and Realtors should know – Part 4 (spake.com)
• The Realtor Code of Ethics – What consumers and Realtors should know – Part 5 (spake.com)
• The Realtor Code of Ethics – What consumers and Realtors should know – Part 6 (spake.com)

The Realtor Code of Ethics – What consumers and Realtors should know – Part 7 is a post from: Memphis Real Estate Buzz Blog

The week’s best real estate stories:

• Five Statements That Will Keep You Living With Your Parents
  H/T Brian Copeland
• Report warns that Memphis metro area tops list for ‘job sprawl’ » The Commercial Appeal
  Now a think tank has compared job sprawl among cities nationwide and decided Memphis ranks first. In no other midtier or smaller metropolitan area has such a large share of jobs disappeared from the old core while a new wave of work emerged miles away.
• Squatters Cite Laws to Stay in Homes for Free | Realtor Magazine
  With the number of vacant homes dwindling, house squatters are getting bolder. They’re moving into homes and staying for free, citing adverse possession law in some states, which allows a person to claim title to an abandoned property after occupying it for a certain amount of time.
• Real estate website fraud becomes issue | HousingWire
  RENTERS BEWARE! If you are looking for a rental, PLEASE be aware of this scam, which has moved from being a Craigslist thing to now appearing on Zillow. If you can’t go through the advertised unit with a local agent, don’t send deposit money to an out of town PO Box.
• HUD-Owned Homes Expected to Surge
  More HUD foreclosures will be hitting the market.
• Vacancy rates drop alongside homeownership rates | HousingWire
  Vacancy rates across the U.S. suggest more Americans are slowly coming back into the housing and rental markets, but at a very controlled and deliberate pace.
• Country Legend George Jones’ Estate on the Market for $8 Million | Zillow Blog
• Homeownership rate lowest since 1995
  The U.S. homeownership rate fell to the lowest in almost 18 years, reflecting rising demand for rentals and investor purchases in the housing market, writes Bloomberg Businessweek.

All my curated real estate links are archived at http://delicious.com/joespake/realestate. What are your thoughts? If you are interested in one of these stories, start a conversation in the comments section below.

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RE Buzz – Real Estate News Roundup – May 7, 2013 is a post from: Memphis Real Estate Buzz Blog

Part 6 in the Realtor Code of Ethics Series

Part 1   Part 2  Part 3 Part 4 Part 5

Article 9 of the Realtor Code of ethics deals with paperwork, getting agreements in writing and making every effort to keep them as understandable as possible.  Of course things have changed in the last 100 years – now email transmissions are acceptable; and is anyone not accepting verified electronic signatures?  Still it is the responsibility of the Realtor to make sure all the t’s are crossed and the i’s are dotted and that parties are clear on what they are signing.  Bottom line for Article 9: Put it in Writing. Keep it clear. Furnish copies to all parties. Keep documents up to date. Make reasonable effort to explain what is being signed.

Article 9
REALTORS®, for the protection of all parties, shall assure whenever possible that all agreements related to real estate transactions including, but not limited to, listing and representation agreements, purchase contracts, and leases are in writing in clear and understandable language expressing the specific terms, conditions, obligations and commitments of the parties. A copy of each agreement shall be furnished to each party to such agreements upon their signing or initialing. (Amended 1/04)

• Standard of Practice 9-1

For the protection of all parties, REALTORS® shall use reasonable care to ensure that documents pertaining to the purchase, sale, or lease of real estate are kept current through the use of written extensions or amendments. (Amended 1/93)

• Standard of Practice 9-2

When assisting or enabling a client or customer in establishing a contractual relationship (e.g., listing and representation agreements, purchase agreements, leases, etc.) electronically, REALTORS® shall make reasonable efforts to explain the nature and disclose the specific terms of the contractual relationship being established prior to it being agreed to by a contracting party. (Adopted 1/07)

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Related articles

• The Realtor Code of Ethics – What consumers and Realtors should know – Part 1 (spake.com)
• The Realtor Code of Ethics – What consumers and Realtors should know – Part 2 (spake.com)
• The Realtor Code of Ethics – What consumers and Realtors should know – Part 3 (spake.com)
• The Realtor Code of Ethics – What consumers and Realtors should know – Part 4 (spake.com)
• The Realtor Code of Ethics – What consumers and Realtors should know – Part 5 (spake.com)

The Realtor Code of Ethics – What consumers and Realtors should know – Part 6 is a post from: Memphis Real Estate Buzz Blog

The week’s best real estate stories:

• Country Legend George Jones’ Estate on the Market for $8 Million
• Investing in Crosstown – Not Cross-Purposes « Smart City Memphis
  Putting emphasis on the core city
• Realtors Urge Preserving of Homeownership Tax Policies
  Mortgage interest deduction?
• Tight Housing Supplies Plague Spring Market | Realtor Magazine
  Home sales are “stuck” this spring due to the limited number of homes available to buy, says Lawrence Yun, chief economist for the National Association of REALTORS®.
• Housing market driven by local fundamentals | HousingWire
  "The housing market is now being driven by local economic fundamentals,"
• Attend Livable Memphis’ Annual Summit: Fund the Places We Live
• Why Home Sales Stalled in March – Developments – WSJ
  Where’s the inventory? The demand is there but supply is not.
• Calculated Risk: Lawler on Housing: Table of Cash Buyers in March, Updated Table of Short Sales and Foreclosures for Selected Cities
  41.2% of Memphis real estate sales are cash.

All my curated real estate links are archived at http://delicious.com/joespake/realestate. What are your thoughts? If you are interested in one of these stories, start a conversation in the comments section below.

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RE Buzz – Real Estate News Roundup – April 30, 2013 is a post from: Memphis Real Estate Buzz Blog

 Part 5 in the Realtor Code of Ethics Series

Part 1   Part 2  Part 3 Part 4

Articles 7 and 8 of the Realtor Code of Ethics are short and straight forward.  Article 7 deals with Realtor compensation and the requirement of full disclosure in informed consent of clients if the Realtor receives compensation from more than one party.  Article 8 requires a separate special account for handling monies from other persons, ie: no co-mingling of funds with a Realtor’s business or personal accounts and monies being held on behalf of others such as earnest money.

Article 7

In a transaction, REALTORS® shall not accept compensation from more than one party, even if permitted by law, without disclosure to all parties and the informed consent of the REALTOR®’s client or clients. (Amended 1/93)

 Article 8

REALTORS® shall keep in a special account in an appropriate financial institution, separated from their own funds, monies coming into their possession in trust for other persons, such as escrows, trust funds, clients’ monies, and other like items.

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Article 7 – fair dealing, disclosure and transparency.  Article 8 – No co-mingling of funds.  Sounds like good business to me.

 Related articles

• The Realtor Code of Ethics – What consumers and Realtors should know – Part 1 (spake.com)
• The Realtor Code of Ethics – What consumers and Realtors should know – Part 2 (spake.com)
• The Realtor Code of Ethics – What consumers and Realtors should know – Part 3 (spake.com)
• The Realtor Code of Ethics – What consumers and Realtors should know – Part 4 (spake.com)

The Realtor Code of Ethics – What consumers and Realtors should know – Part 5 is a post from: Memphis Real Estate Buzz Blog

The week’s best real estate stories:

• A race against time: Student loan debt stalls first-time homebuyers
• Surviving a Home Inspection—WSJ House Talk – WSJ.com
• The Housing Bubble Blog » Hitting The Market With Unrealistic Expectations
  “So how can the average American afford this place? How can I buy a house in 2013 dollars when I currently (after two paycuts) make 1999 dollars?”
• 75% of Americans would rather buy now than later
• Trulia’s Real Estate Regrets Survey Infographic
  Homeowner and Renter regrets
• Zillow Chief Economist Discusses Home Affordability on Fox Business | Zillow Blog
  Zillow’s data shows home affordability is 37 percent better than it’s ever been historically, but if you take away today’s incredibly low interest rates and just look at home prices compared to incomes you’ll find homes are actually 15 percent more overpriced than they’ve been in the past.
• A Growing Segment of Buyers: Female Baby Boomers | Realtor Magazine
  Single women make up the second largest segment of home purchases, with one out of every five homes purchases by a single woman, according to the National Association of REALTORS®. With more than 25 million single women over the age of 45 — whether never married, divorced, or widowed — it is making up a growing demographic
• Are Home Prices Rising Too Fast?
• They’re Back: Mortgage Schemes
  "False statements on loan applications, inflated appraisals, and loan modification schemes are just some of the ways fraud is reappearing in the mortgage market. And with government loans on the rise—the number of mortgages insured by the Federal Housing Administration has nearly doubled since 2006—the potential for mortgage fraud increases, especially among applicants in shaky financial condition."
• Help offered to financially distressed homeowners in Memphis » The Commercial Appeal
  Since the state started the Keep My Tennessee Home program more than a year ago, it has spent $7.9 million to help pay the mortgages on 613 homes for financially distressed families in Shelby County alone.
• Home Starts Surge on Rental Construction Demand
  Demand for rentals is high in many areas.
• Downsizing Baby Boomers Head to Urban Areas
  I see a lot of suburbanites wanting to get to the city.

All my curated real estate links are archived at http://delicious.com/joespake/realestate. What are your thoughts? If you are interested in one of these stories, start a conversation in the comments section below.

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RE Buzz – Real Estate News Roundup – April 23, 2013 is a post from: Memphis Real Estate Buzz Blog

Part 4 in the Realtor Code of Ethics Series

Part 1   Part 2  Part 3

This installment of the Realtor Code of Ethics series features 2 short but very important articles.    Articles 5 and 6 both deal with proper disclosure.  Article 5 deals with a Realtor’s personal interest in a property, either present or contemplated, and the requirement of disclosure to all affected parties. Article 6 requires the disclosure of financial benefits that might be received from referral of products or services and the requirement to inform and receive consent from the client before receiving any compensation on behalf of the client.  Variations on the tone of  Article 6 are covered by Federal Law in the form of  RESPA – the Real Estate Settlement Procedures Act.  Here are the Articles:

Article 5
REALTORS® shall not undertake to provide professional services concerning a property or its value where they have a present or contemplated interest unless such interest is specifically disclosed to all affected parties.

 Article 6

REALTORS® shall not accept any commission, rebate, or profit on expenditures made for their client, without the client’s knowledge and consent.

 When recommending real estate products or services (e.g., homeowner’s insurance, warranty programs, mortgage financing, title insurance, etc.), REALTORS® shall disclose to the client or customer to whom the recommendation is made any financial benefits or fees, other than real estate referral fees, the REALTOR® or REALTOR®’s firm may receive as a direct result of such recommendation. (Amended 1/99)

• Standard of Practice 6-1

REALTORS® shall not recommend or suggest to a client or a customer the use of services of another organization or business entity in which they have a direct interest without disclosing such interest at the time of the recommendation or suggestion. (Amended 5/88)

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As I mentioned in the last segment, it’s all about fairness and the Golden Rule.  We hear more and more about transparency every day.  The honest transaction makes things better for all parties involved.

Related articles

• The Realtor Code of Ethics – What consumers and Realtors should know – Part 1 (spake.com)
• The Realtor Code of Ethics – What consumers and Realtors should know – Part 2 (spake.com)
• The Realtor Code of Ethics – What consumers and Realtors should know – Part 3 (spake.com)

The Realtor Code of Ethics – What consumers and Realtors should know – Part 4 is a post from: Memphis Real Estate Buzz Blog