With more people attempting to sell their homes over the summer months we will see an increase in the number of homes on the market.  When more homes are on the market for sale, more homeowners may become dissatisfied with their current listing agent opening up opportunity for another agent to contract with the seller to list and sell the home once the original contract to sell the home expires.  These homes that have "expired" off the market are fertile ground for real estate agents attempting to build their listing inventory.   Contacting the homeowner of an expired listing is a perfectly legal and acceptable practice but real estate professionals should be cognisant of a few issues before initiating conversations with homeowners who are about to be expired off the market.

Contrary to popular belief, a real estate agent may speak with a homeowner who is currently under a listing agreement with another broker for the sale of their property.  This call has come in to our broker support line often enough that we felt it important to stress that although the agent is allowed to talk to the seller that communication must be initiated by the homeowner and not the agent.  Once the communication is initiated by the homeowner, the real estate practitioner should be careful to only do the following:

a.    Talk about what they can do to sell the home.

b.    Talk about the price they think the home will sell for.

c.    Look at comparable sales.

Real estate agents in speaking with a "not so expired" listing homeowner should always be careful to leave out any reference to the current real estate practitioner or brokerage that has a listing agreement in place with the homeowner.  To follow what is allowed to say it is wise to make sure that you stay away from addressing any of the below when talking to the homeowner of a "not so expired" listing:

a.    Talk about the job the current real estate practitioner is doing for the homeowner.

b.    Comment on what you would do different than the existing real estate agent.

c.    Mention anything with regard to the current real estate agent or brokerage.

d.    Give the homeowner any information on how to get out of their current listing agreement.

As long as you stick with the above guidelines all should be well with your pursuit of the expired or not so expired listing.  Good luck and please do not hesitate to inquire with the Broker Management Team should you have any questions related to this type of marketing.

Listing Pictures & Change to Listing Agreement

Two recent issues have been discussed by the Broker Management team regarding listing pictures and a change required to the Exclusive Seller Listing Agreement.  The issues involve agents inadvertently violating copyright law when using listing pictures from a previous listing and a paragraph in the Exclusive Seller Listing Agreement that affords protection to the wrong party.  Although these issues are separate and unique we thought them to be prudent subjects for this broker update. 

With the number of homes listed for sale today and the extended days on the market numbers for existing and new home sales, the expired home listing market place has become even more active than at other times in our industry.  Sellers become frustrated when their home sits on the market and often times it is the Listing Agent that takes the brunt of the Seller's angst due to the non activity on the home.  When Sellers discard their previous Real Estate Professional for a new real estate practitioner it is quite tempting to use some of the old listing pictures, especially in the case of seasonal pictures that show prettier landscapes or different angles of the home which are not currently possible.  Using pictures of common areas in subdivisions such as the sign or clubhouse may put the real estate agent at risk for being sued as violating copyrights or trademark rights of the owner.

Although this practice has been rather common, it is certainly one of danger to the standard business practice of today due to pending litigation against real estate practitioners and their respective brokerages for re-using listing pictures taken by a previous agent or using otherwise copyrighted photographs in their advertisements including online listings placed with the MLS.  Based on this information the Broker Management team recommends you as the agent take your own photographs and obtain written permission from the owner if using any pictures taken previously by anyone other than yourself. 

With regard to the Exclusive Seller Listing agreement, we have identified a misprint in paragraph 10 that references "Buyer" in place of the "Seller" which should be the referenced party.  The recommendation from the Broker Management team to remedy this error, until resolved permanently by the contract committee, is to add a stipulation to the agreement which reads:

All parties agree that all instances of "Buyer" in section 10, with the exception of 10A, shall be replaced with "Seller".

Credit Checks 
In today's real estate market, rentals have gained in popularity.  Agents that have never worked leases / lease purchases are finding themselves in these transactions for the first time with often times little or no formal training.  Of the many different considerations on a Lease or Lease / Purchase transaction, the Buyer's ability to buy or the Tenant's ability to perform the terms of the lease are critical to the decision making process of the owner / landlord.  To this end, the credit report is increasingly a topic of conversation among agents and their clients.

We have had a number of requests from the Broker Team lately for recommendations on companies that our agents can use for credit checks in leasing transactions.  Although this could be viewed as performing that "extra mile" service for our clientele, in fact the agent and brokerage incur a great amount of risk and liability when procuring credit check services on behalf of others. The amount of money to be earned from performing credit checks is far outweighed by the liability to the agent and the brokerage so therefore our policy is to allow our tenant and landlord clients to search for and obtain the services of their own credit check service provider.

It's hot out there so make sure you keep your cool.

The spring season is upon us and agents will be negotiating many deals on the purchase and sale of real estate. Some of these negotiations go very well with both sides feeling they have won for their clients and some of the negotiations turn to a more adversarial tone with one or both sides drawing a "line in the sand".  It makes sense to keep your wits while interacting with all parties in a transaction to make things go a little smoother.  The focus of this blog is just that, "Keeping Your Cool in Negotiations". 

1.     Attempt to understand the motives of the other side.

What somebody says and what they mean sometimes are mutually exclusive.  If you understand why someone has the position they have then it will be easier to deal with them fairly and still get what you want.  The struggle here is to hold your initial thoughts until you find out what is driving the other side's position.

2.     Ask what is important to the other side.

One of the most important facets to controlling a situation is to make the other side feel that you are working with them in a sense of really trying to make the deal work by getting them what they want.  This willingness to help the other side will build trust and make your points easier for the other side to concede later on down the road.

3.     Avoid getting in the way of the deal with your emotions.

Sometimes a request or statement may be deemed offensive but make sure the client's feelings come first and if they are not offended the best plan is to forget any feelings of anger toward the other side and work for the common good of the deal.  This is truly placing your client's best interest first.  Keep in mind there is nothing stopping you from mentioning to the other agent your feelings later on after which everything has been agreed.

4.     Understand the wants and needs of your client.

Keeping your client's wants and needs first and foremost on your mind will go a long way to diffusing a potentially contentious situation.  Knowing what your client wants will allow you to effectively negotiate on their behalf and keep the emotions to a minimum.   

2011 Forms Changes
Short Sale Exhibit & Notice to Terminate

Short Sale Contingency Exhibit (F94)

The short sale contingency has been modified with the following:

a.    Bold Faced language saying "If the mortgage lenders and, if applicable, other lien holders, agree to take a reduced payoff, it shall be the sole responsibility of the seller to verify that they are also releasing seller from further liability."

This clause is important as it will protect real estate professionals from any claim that they may have been responsible for obtaining any sort of release of responsibility for the seller from the seller's lender.   

b.    Requires the consent of all lien holders to the short sale.

c.    Language was added to the exhibit to require compliance with the HAFA program.

The HAFA program mandates that a buyer of a short sale property must not resell the property within 90 days of the closing of the purchase. The buyer must also certify that they are purchasing the home as an "arms length" transaction.

Unilateral Notice to Terminate; Agreement to Disburse Earnest Money (F83)

The Unilateral Notice to Terminate; Agreement to Disburse Earnest Money allows for the following:

a.    Replaced the Notice to Terminate; Termination and Release Agreement.

b.    Allows either Buyer or Seller to terminate the purchase and sale agreement for various reasons such as Buyer's right to terminate during a due diligence period or for either party's right to terminate based on a failure of a contingency to which the contract was subject.

c.    Allows for either party to terminate the agreement based on the default of the other party.

Agent as Principal

We have had a number of calls regarding agents working their own deals.  This is a very common practice but we feel that some points need to be mentioned so everyone is clear regarding company policy and GREC regulations regarding Agents acting as Principals in their own transaction.

Agent Personal Transactions - General Information
GREC requires Licensee to notify Broker in writing of participating in ANY real estate transaction as a principal. This notification must be sent to Broker from Licensee BEFORE transaction is underway. For example, if Licensee will be purchasing a property, notification should be sent when the home search begins, not after the contract is accepted. ALL notifications are to be sent to: broker@solidsource.net.

GREC also requires Licensee to fully disclose that Licensee is a licensed real estate agent in the state of Georgia and holds his license with Broker as an Independent Contractor.

Solid Source Gives Back

On Saturday, March 5, 2011, Approximately 25 Solid Source Realty staff members, agents and there families participated in the annual Warthog Waddle 5k road race to benefit the Wiphan Care Ministries.   The event was held at the Fellowship Bible Church in Roswell, Ga.  The weather was not very nice as it was cold and drizzly but everyone seemed to have a great time enjoying the run, fellowship and the chance to help a great cause.  

Two members of the Solid Source Family actually placed in the run taking home prizes for their respective age groups.  The event was a great success and everyone is looking forward to the run next year.

Portraying your listing in the most positive light is very important in today's market when an oversupply of homes for sale exist and buyer's are hesitant to pull the trigger on an offer / purchase all the while thinking there may be a better deal just around the corner.  Agents spend hundreds of dollars on virtual tours, custom printed flyers, door hangers, custom web sites and open houses to showcase and advertise listings in the hope that these things will bring that all allusive, fully qualified buyer.  One of the items that did not make the above list and often times seems to be overlooked is quality listing pictures.

As one peruses through the vast amount of homes listed for sale it is striking to note the varying degrees of quality with regard to listing pictures.  It is also interesting to see the different ways real estate practitioners choose to highlight various aspects of their respective homes by camera angles, vantage points, lighting and so on.  With all of the emphasis placed on separating your listing from all the other ones on the market it is amazing and at the same time quite humorous to see some listing pictures.

A recent home search in the Roswell, Georgia area uncovered some very unique pictures to say the least.  Real Estate professionals marketing a product worth several hundred thousand dollars had out of focus pictures, pictures so dark you could not make out the room, pictures of the ceiling so close that you could not make out any detail, main pictures of the home partially blocked by cars in the driveway or Real Estate signs in the yard.  The list of pictures that do not fit the job of marketing a home in today's market could go on and on however my personal favorite was a closely cropped shot of the inside of a pantry with packages of food available to view.  The picture was taken inside the door frame so your perspective was if you were standing in the pantry looking at the snack foods from about a foot away. 

The city of Roswell is hosting a "Shredfest" this coming Saturday, February 12, 2011.  The event is open to anyone that would like to destroy important or sensitive documents in a safe environment.  The location of the "Shredfest" is the Roswell Public Works facility located at 1810 Hembree Road in Roswell, Ga.   Residents and non-residents may bring their sensitive materials for shredding to the facility between the hours of 8am - noon at no cost.  This is a first come, first serve event as space is limited to the capacity of the shredding truck.  Participants may shred up to five (5) boxes or two-hundred (200) pounds of documents per vehicle.

The city of Roswell will offer this "Shredfest" several more times throughout the year as an attempt to assist residents and non residents in the Roswell area to be more environmentally conscious.  The proposed dates for the remaining "Shredfest" events are as follows:

May 21, 2011
August 13, 2011
November 12, 2011

So plan on attending these events to safely dispose of sensitive documents.  For more information on this event please visit the following web site:

            In recent years, short sales have made up a diportionately large number of all real estate transactions and probably will contimue to do so for some time.  However, there are important limits on how far a real estate agent can go in representing their seller when it comes to short-sales.  The most far-reaching limitation is imposed by the Georgia Residential Mortgage Act (the "Act") which was modified recently to comply with the Secure and Fair Enforcement for Mortgage Licensing Act (the "S.A.F.E. Act) which is a key component of the Housing and Economic Recovery Act of 2008 ("HERA").

Pursuant to the Act, "it shall be prohibited for any person to engage in the activities of a mortgage loan originator without first obtaining and maintaining a mortgage loan origination license".    A mortgage loan originator is defined as someone who takes a residential mortgage loan application or offers or negotiates terms of a residential mortgage loan.  The term "mortgage loan" includes the renewal or refinancing of a loan". 

The Act specifically exempts real estate brokers and agents from licensure, but only to the extent that they are performing real estate brokerage activities.  Notably, real estate brokers and agents are not exempt to the extent that they "directly or indirectly negotiate, place or find a mortgage for others".  In any of those events, they must be licensed as mortgage loan originators or mortgage brokers. 

            Normally, real estate brokers and agents do not get involved in negotiating the terms of loans for their clients and should not run afoul of the Act.  However, what about in short-sale situations?  If an agent contacts the seller's lender trying to negotiate terms for a short-sale, does this violate the Act?  We do not have any definitive case law on this yet, but the answer certainly appears to be "yes". 

So, what's an honest agent to do?  In short, the agent should limit their role to that of information provider and have no hand in actual negotiations with the seller's lender.

It is okay for a real estate agent to gather information about the property, undertake a market analysis, create a BPO, suggest a list price for the property, assist in the negotiation of the terms of the sale to a buyer, and to generally do all the things agents normally do for non-short-sale sellers.

It is probably fine for an agent to provide all of the above information to the seller's lender and to provide the lender with any other information or documentation it may request.

In Georgia, when a property is Owner occupied, the property owner may qualify for a reduction in property taxes through the Homestead Exemption Act.  Please check out the information below and check with the local county to file for your Homestead Exemption. 

Homestead Exemption

• Individuals 65 Years of Age and Older May Claim an exemption from state tax on their home and 10 acres of land surrounding the home                    
  Individuals 65 years of age or over may claim an exemption from all state ad valorem taxes on their home and up to 10 acres of land surrounding the home. Ad valorem tax for state purposes will be due on the assessed value of land that exceeds the 10 acre limitation. (O.C.G.A. § 48-5-48)

Information taken from: https://etax.dor.ga.gov/ptd/adm/faq/real.aspx#exemptions

WASHINGTON (Reuters) - The U.S. government is taking action to speed the resale of foreclosed properties by temporarily expanding access to Federal Housing Administration mortgage insurance, U.S. housing officials said on Friday.

Effective Feb 1, the Housing and Urban Development Department will waive for one year an FHA rule that prohibits insuring a mortgage on a home owned by the seller for less than 90 days, giving FHA borrowers access to a broader array of recently foreclosed properties.

The move is to allow homes to resell as quickly as possible, helping stabilize real estate prices and revitalize neighborhoods after the U.S. housing market collapse.

"This change in policy is temporary and will have very strict conditions and guidelines to assure that predatory practices are not allowed," HUD Secretary Shaun Donovan said.

FHA research shows acquiring, rehabilitating and reselling foreclosed properties to prospective homeowners often takes less than 90 days, HUD said.

The current rule discourages sellers from signing contracts with FHA buyers because of holding costs and the risks of vandalism from allowing a property to sit vacant more than 90 days, the department said.

"FHA borrowers, because of the restrictions we are now lifting, have often been shut out from buying affordable properties," said FHA Commissioner David Stevens.

The policy change will permit buyers to use FHA-insured financing to purchase HUD-owned properties, bank-owned properties or properties resold through private sales.

http://www.reuters.com/article/idUSTRE60E5YP20100115

We at Solid Source are always thrilled to keep everyone updated with an exciting look at what is happening with the precious widows and orphans we support in Africa!  We praise God for calling us to be a part of this ministry (www.wiphan.org) that started in 2008 and for providing the resources through your transaction fees and monthly dues to make a significant difference in the lives of so many.

In the last update, we were given the wonderful news that the school we support got running water and electricity.  It is difficult to imagine even one day without either of these amenities that people in Africa may go a lifetime without.  Currently, a new fellowship hall is being built and lunch is still being provided to the school by Solid Source all five school days every week.  There are no words to thank everyone who is a part of Solid Source for being here and for being a significant part in providing for these 600+ widows and orphans.  

Click here to see pictures and a video about Solid Source in Africa.

The real estate market has weathered quite a storm over the past few years.  Throughout the late 90's and first half of the 2000's the real estate market flew high on the promise of easy money from lenders and a frenzy created by low inventory.  It seemed to sell a home all you had to do was put a sign in the yard and wait several days to a week for several competing offers to roll in.  The mortgage crisis of 2006 changed everything.  Homeowners began to default on the loans that were so easily acquired, inventory levels began to climb and home values began to drop.  Out went the advantage of the seller and in roared the buyers market.

When markets change, the companies that survive are the ones that adapt to their surroundings and work with the changing market as opposed to fighting to keep things the way they were.  Many have said that Einstein's definition of insanity was continuing to do the same things over and over but expecting a different result.  Many real estate companies and agents have struggled with trying to adapt to the changes in the market place.  Those who could not adapt are still struggling or have closed their doors.  

Solid Source Realty began in 2003 as a new way for real estate agents to conduct business in the state of Georgia.  Solid Source wanted to find way to help real estate agents do more business and remain competitive in the marketplace by being able to keep more of their hard earned commissions.  Traditional brokerage models called for splits on average of 20 to 50 percent of sales commission to be paid to the broker for each sale.  What followed was to be a revolution in the way agents interacted with their broker, their office... and their clients.

After introducing its new way of doing business, Solid Source was featured on CNN for creating the first paperless real estate office software.  Not only did this software house data electronically but it created an interface for the agent to manage clients and business more efficiently.  This led to the creation of unheard of low monthly fees and a flat rate transaction fee for the agent.  No more costly splits to the broker and high office fees.  

Solid Source now has over 2800 agents in its family of companies.  Their transaction fees have remained the same since opening in 2003 and they are proud to serve their agents and customers as a debt free company while offering their agents and customers an impressive list of Hi-tech services to keep everyone involved placed firmly on the cutting edge of the real estate market.  

If you are looking for a company that has adapted to meet the challenges of this new economy, please call 770-475-1130 and type in HELP (x-4357).  Anyone looking to join a stable debt-free firm with the name recognition necessary for business can attend a free information session any Wednesday starting promptly at 10:30am to 12 noon at their Buckhead Office at 20 Lenox Pointe, Atlanta, GA 30324.  This session covers all of the free, cutting edge services offered to Solid Source Agents and included in their amazingly low monthly fees.

So make sure you don't get left behind.  The market is constantly changing.  Be sure to get your information from a company that has a proven track record of changing with the market.