EXCLUDING OPINIONS OF VALUE, PAYMENT IF FULL FOR REPAIRS, SEWER OR SEPTIC DISCLOSURE:     

p5, section 5b, Line #201:  Warranties that Survive Closing: Seller Warrants that Seller has disclosed to Buyer and Broker(s) all material latent defects and any information concerning the Premises known to Seller excluding opinion of value, which materially and adversely affect the consideration to be paid by Buyer.  Prior to COE, Seller warrants that payment in full will have been made for all labor, professional services, materials, machinery, fixtures, or tools furnished within the 150 days immediately preceding COE in connection with construction, alteration, or repair of any structure on or improvement to the Premises.  Seller warrants that the information regarding connection to a sewer system or on-site wastewater treatment facility (conventional septic or alternative) is correct to the best of Seller’s knowledge.

EXCLUSIVE RIGHT TO SELL:  ER VS EA;  Q: If I list a residential property or a piece of vacant land, I proceed with the EA listing contract correct?  A: Hi XYZ, No, we prefer that you use the ER Listing Agreement.  The EA allows the seller to sell the property themselves without paying a commission.  Most agents that use the EA think that they are actually using the Exclusive Right to Sell (ER) because it is first on the list in zipForms.  The ER specifies that both you and HomeSmart will be paid a commission if the transaction closes.  Please be certain to use the correct listing agreement - or you may find yourself in a position where you are unable to collect a commission for the work you have done. You must also make certain the MLS indicates it is an EA vs an ER.  

 

EXPERTISE, FIELD OF EXPERTISE: Q:  I have friends who want to use me to buy/sell homes in Prescott and Pinetop.  There appears to be an option where I can just join the MLS in those areas without joining the associations.  Will I still be able to make commissions if I do that?

 

A: Hi X, Do you have experience or have you listed or sold homes in those areas?  The code of ethics says that we should not undertake any activity that is outside our scope or field of expertise.  However, if the client is aware of this fact and elects to move forward with you as the agent, you are allowed to proceed.  The best practice would be for you to add disclosure language to page six (additional terms) of the ER Listing Agreement if you are working with a seller, or 2) add disclosure language in the additional terms and conditions section of the Buyer Broker Agreement if you are working with a buyer.  If you don't have a Buyer Broker Agreement a written confirmation that the client understands that this is not your primary marketing area and/or field of expertise such as an archived email exchange regarding this would suffice. Here is sample language for for the ER or Buyer Broker Agreement (edit accordingly):

 

Listing: Seller acknowledges that (city) is not the agent’s primary marketing area and/or field of expertise, however I/we are comfortable with (agent), an Arizona Licensed Real Estate Agent with HomeSmart assisting us and representing us in this transaction for the listing and sale of the property located 123 Main St, (city) AZ.     OR   Buyer Broker Agreement: Buyer acknowledges that selling real estate in (city) is not the agent’s primary marketing area and/or field of expertise, however we/I are comfortable with (agent), a Licensed Arizona Real Estate Agent with HomeSmart, assisting us and representing us in this transaction for the purchase property in (city) AZ.   

 

Always consider referring it out to someone with experience in those markets if it is a complex transaction or if you are not comfortable with it.  

 

As for joining those various associations and/or MLS, you will need to pay the required fees to join those in order to have access to their MLS.  For Prescott you would need to join the Prescott Area Association and MLS. For Pinetop you would need to join the White Mountain Association and MLS (these would be secondary association memberships).  FYI, here is a link to the various associations by city throughout the state of AZ:  

https://nazrealtor.com/association-reference-by-city  Remember, compensation is offered through each MLS.  If you are not a member of that particular MLS, you will need to utilize the HomeSmart form titled "Broker to Broker Compensation Agreement" which is located on your RSA portal in the downloads link.  Be sure to have that signed prior to presenting an offer.  This is how you will be paid if you are not a member of that MLS (See Attached).

 

You will also need to make sure your license is hanging with one of our Branch Offices that is approved as a member of the outside association.  Contact agent services to have them move your license to an approved branch office.  Please let me know if you have any further questions regarding this.JT  (Attachment, Broker to Broker Compensation Agreement)  Reviewed with Kyle 5/29/2020  (SEE CASE STUDY DOCS TAB)

 

(More sample language,such as xMarianexKoostrax) You may proceed, but please have a written confirmation that the client understands this is not your primary field of expertise but also elects to move forward and have you represent him/her.  An archived email exchange regarding this would suffice.  Keep that for your personal transaction records.  LANGUAGE-FIELD OF EXPERTISE:  (MKOOSTIRANAZ) “I, XYZ, acknowledge that this type of (ie, commercial) transaction is not the agent’s primary field of expertise, however we are comfortable with XXX, an Arizona Licensed Real Estate Agent/Broker with HomeSmart assisting us and representing us in this transaction for the purchase/Lease of 123 Main St, Tempe, AZ.     OR    “I, XYZ, acknowledge that listing and selling real estate in Tucson is not the agent’s primary field of expertise, however we/I are comfortable with XXX, a Licensed Arizona Real Estate Agent/Broker with HomeSmart, assisting us and representing us in this transaction for the purchase/Lease of 123 Main St, Tempe, AZ.

EXPIRED LICENSE:  YOU CANNOT CONDUCT ANY REAL ESTATE ACTIVITIES WHILE YOUR LICENSE IS EXPIRED/INACTIVE.  CALL YOUR BROKER TO CHANGE ALL LISTINGS TO TOM.  REACTIVATE ONCE YOUR LICENSE IS REINSTATED.  OPEN ESCROWS:  MOVE TO TRANSACTION COORDINATOR, AGENT WILL NEED TO COMPENSATE TC!

 

EXTEND RESPONSE TIME TO OFFER OR COUNTER-OFFER   Response time on purchase contract (or counter offer), line #xx, is hereby extended to xx/xx/xxxx at Xpm.” or “Line #437 is hereby changed to read Xpm”...you can extend the response time on a counter offer, on an Addendum, or, if the parties agree to move forward and open escrow that would show the intent to move forward even though it was past the response time.  OR “Line #437 of the purchase contract is hereby extended to time and date of Sellers signatures.”

EXTENSION (ASK FOR EXTENSION, MULTIPLE USES):  “In consideration of (Buyers/Sellers) need for and request for an extension (for X), Seller and Buyer agree that Buyer’s Earnest Money Deposit shall be increased to $X, and will be non-refundable, except in case of sellers breach, or if either party exercises their rights under the “RISK OF LOSS” provision.’ 

EXTEND EXPIRATION DATE OF LISTINGS IN ESCROW?  If your listing goes under contract and it was due to expire during the escrow period, the listing "expiration" date will automatically roll over to the COE date and it will not expire during escrow.  However, to go UCB to PEND or PEND to UCB during escrow, you must first go to ACTIVE and that will cause a listing to expire if it is past it's expiration date at that point in time.  If that happens, call ARMLS or your broker to make the correction to the expired listing date.                                                                                                                                                                                  EXTORTION SCAMS:

FACEBOOK:  I am interested in hosting open houses, is there a portal or some sort that I can contact agents with listings that is willing to let me host an open house?  Thank you

Hi Carlos.  The best recommendation I can give you on this is to 1) network with your branch office members at the monthly meetings, and 2) put the word out on social media as to your need/interest/wants/etc.  Here is a list of the HS Facebook Groups in metro Phoenix...I'd say join the one in your primary marketing area(s).  Jeff.   HomeSmart Arrowhead, HomeSmart East Valley, HomeSmart Scottsdale, HomeSmart Surpise, HomeSmart on Hartford, HomeSmart Greater Central Phoenix, HomeSmart Goodyear, HomeSmart Terravita

HomeSmart Arrowhead     HomeSmart East Valley

HomeSmart Scottsdale     HomeSmart Surpise

HomeSmart on Hartford     HomeSmart Greater Central Phoenix

HomeSmart Goodyear

IMPORTANT NOTE FROM LAURIE: 

All - we are consolidating HomeSmart Facebook Groups into one very soon.

Agents have until 8-15-20 to opt into new group

www.facebook.com/groups/homesmartarizonaagentconnection

FACETIME:  Facetime is not adequate for the final walkthrough!

FAIR DEALINGS:  A licensee only has an obligation to deal fairly with other parties to a transaction.

 

FAIR AND HONEST DEALINGS: Sorry but I'm drawing a blank....please remind me the term used when all agents are to be FAIR regardless of which side they represent??       The code of ethics says that we will treat all parties to a real estate transaction honestly and of course fairly (see screenshot).  We still have a fiduciary responsibility to our client and must act in the best interest of our client at all times (second screenshot).

FAIR HOUSING, The following best practices will help you steer clear of steering:  1) Provide clients with listings based on their objective criteria alone.  2) When a client uses vague terms such as “nice,” “good,” or “safe,” ask impartial questions to clarify their criteria, such as property features and price point.  3) Only communicate objective information about neighborhoods and direct clients to third-party sources with neighborhood-specific information.  4) Learn to pay attention to your unconscious biases. When evaluating what a client objectively wants, ask yourself why you have eliminated certain areas, if you have.

 

 

 

FAIR HOUSING:  The Fair Housing Act is a federal act in the United States intended to protect the buyer or renter of a dwelling from seller or landlord discrimination. Its primary prohibition makes it unlawful to refuse to sell, rent to, or negotiate with any person because of that person's inclusion in a protected class.[1] The goal is a unitary housing market in which a person's background (as opposed to financial resources) does not arbitrarily restrict access.   The legislation was the culmination of a civil rights campaign against housing discrimination in the United States and was approved by President Lyndon B. Johnson one week after the assassination of Martin Luther King, Jr.

The Fair Housing Act was enacted as Title VIII of the Civil Rights Act of 1968, and codified at 42 U.S.C. 3601-3619, with penalties for violation at 42 U.S.C. 3631. It is enforced by the United States Department of Housing and Urban Development.[2]

Refusal to sell or rent a dwelling to any person because of racecolor, disabilityreligionsex, familial status, or national origin.  Discrimination based on race, color, religion, sex, disability, familial status, or national origin in the terms, conditions or privileges of sale or rental of a dwelling.  Advertising the sale or rental of a dwelling indicating preference, limitation, or discrimination based on race, color, religion, sex, handicap, familial status, disability or national origin.  Coercing, threatening, intimidating, or interfering with a person's enjoyment or exercise of housing rights based on discriminatory reasons or retaliating against a person or organization that aids or encourages the exercise or enjoyment of fair housing rights.

FAIR HOUSING:  Effect of failure to display FAIR HOUSING POSTER:  A failure to display the fair housing poster as required by this part shall be deemed prima facie evidence of a discriminatory housing practice. [37 FR 3429, Feb. 16, 1972]     http://fairhousing.com/legal-research/hud-regulations/24-cfr-11030-effect-failure-display-poster

FAIR HOUSING:  HUD REASONABLE ACCOMMODATIONS     https://www.nolo.com/legal-encyclopedia/disabled-renters-housing-rights-30121.html

https://portal.hud.gov/hudportal/HUD?src=/program_offices/fair_housing_equal_opp/ReasonableAccommodations15

FAIR HOUSING/PROTECTED CLASSES/COMPLAINT/AZ ATTORNEY GENERALS OFFICE:   https://www.azag.gov/fair-housing

 

http://portal.hud.gov/hudportal/HUD?src=/program_offices/fair_housing_equal_opp/FHLaws/yourrights

 

HUD.GOV   U.S. Department of Housing and Urban Development:  Reasonable Accomadations Under the Fair Housing Act:

https://portal.hud.gov/hudportal/HUD?src=/program_offices/fair_housing_equal_opp/ReasonableAccommodations15

FAIR HOUSING, USE OF LOGO:     https://fairhousing.foxrothschild.com/2012/10/articles/fha-basics/should-the-fair-housingequal-housing-opportunity-logo-be-used-in-advertising-yes/

FAIR HOUSING:  BE AWARE OF THESE SCENARIOS:     http://realtormag.realtor.org/tool-kit/fair-housing/article/do-any-these-fair-housing-scenarios-sound-familiar

FAIR HOUSING:  4 WAYS TO AVOID DISCRIMENATION IN YOUR ADS:     http://realtormag.realtor.org/tool-kit/brokerage-marketing/article/4-ways-avoid-discrimination-in-your-ads

FAIR CREDIT REPORTING ACT     https://epic.org/privacy/fcra/

FALSE CLOSE:    http://armls.com/prevent-false-close

FEE:  CAN AGENT CHARGE A $300 FEE TO PREPARE DOCUMENTS?  NO.  REAL ESTATE LICENSEE CANNOT DRAFT DOCUMENTS AFTER BUYER LOCATED:                                                   (ALSO SEE UNREPRESENTED PARTY).

FEE SIMPLE:  In contrast to the condominium regime, you may own real estate by fee simpleFee (from the old word, feifdom) refers to legal rights in land, and simple means unconstrained. Fee simple ownership is the absolute and unqualified legal title to real property, including both buildings and land. Dec 22, 2009

REAL ESTATE OWNERSHIP:  CONDOMINIUM VS FEE SIMPLE EXPLAINED:     activerain.com/blogsview/.../real-estate-ownership--condominium-vs--fee-simple-explai..

FENG SHUI:  Feng shui or fengshui (pinyinfēngshuǐ, pronounced [fə́ŋ.ʂwèi] (About this sound listen)) is a Chinese philosophical system of harmonizing everyone with the surrounding environment. It is closely linked to Taoism. The term feng shui literally translates as "wind-water" in English. 

(In Chinese thought) a system of laws considered to govern spatial arrangement and orientation in relation to the flow of energy (qi), and whose favorable or unfavorable effects are taken into account when siting and designing buildings.   https://en.wikipedia.org/wiki/Feng_shui          http://dragongatefengshui.com/

 

FHFA Announces Maximum Conforming Loan Limits for 2020 Fannie Mae and Freddie Mac baseline limit will increase to $510,400.

 

On November 27, 2019 the Federal Housing Finance Agency (FHFA) announced the maximum conforming loan limits for mortgages to be acquired by Fannie Mae and Freddie Mac in 2020. In most of the U.S., the 2020 maximum conforming loan limit for one-unit properties will be $510,400, an increase from $484,350 in 2019.

For a list of the 2020 maximum loan limits for all counties and county-equivalent areas in the U.S. visit   https://www.fhfa.gov/DataTools/Downloads/Pages/Conforming-Loan-Limits.aspx

 

For a map showing the 2020 maximum loan limits across the U.S. visit      https://www.fhfa.gov/DataTools/Tools/Pages/Conforming-Loan-Limits-Map.aspx

FHA: AMENDATORY CLAUSE: ISSUE: Can the appraisal contingency in the AAR Residential Resale Purchase Contract be waived if the buyer is financing the purchase with an FHA or VA loan?

ANSWER: No. Buyers obtaining FHA and VA loans are required to have an FHA/VA Amendatory Clause signed by the parties. This clause states that if the property fails to appraise, “the buyer is not obligated to complete the purchase of the property and cannot incur any penalty by forfeiture of the earnest money deposit.” As such, despite the purchase contract requiring a non-refundable earnest money deposit, the buyer can cancel for failure to appraise without risking his or her earnest deposit where the buyer is financing the purchase with an FHA or VA loan and the parties signed the FHA/VA Amendatory Clause.

Arizona REALTOR® Magazine – August 2013 |Contract-Contingency

FHA 203k Appraisal Guidelines:  https://203kloanrequirements.net/appraisal-guidelines/

An appraisal conducted by a licensed and approved FHA appraiser is needed for underwriting a 203k loan. All residential home loan programs including VA, FHA and conventional (Fannie Mae, Freddie Mac) require the performance of comprehensive appraisal report. The type of appraisal required for the financing of rehab property is specified under the 203(K) appraisal requirements and guidelines.

 

The primary objective of an appraisal report is to establish the value of a subject property based on its existing condition and local market conditions. A lender evaluates other factors only after the suitable property value has been determined. The loan amount allowed by the 203(K) rehab loan program is determined based on the market value established by the FHA approved appraiser.

 

For most common purposes involving residential financing, the lender appraisal guidelines only require the “As Is” value. In such reports, the appraiser estimates the home value based on its prevailing condition. The 203K appraisal is different as it involves the calculation of the “After Repair” value.

In addition to the purchase price, the cost of the rehab and repair work can also be financed with a 203k loan. The proposed repair work, in most cases, increases the property’s market value. A 203k lender seeks the after-repair value from an appraisal report submitted to them by an approved FHA appraiser. The ARV helps the lender determine the maximum loan amount a property can support based on its value.

 

FHA APPRAISALS:  HOW LONG ARE THEY VALID?   http://arizonasmortgagetalk.com/how-long-are-fha-appraisals-good-for/

 

FHA: HUD TO ANNOUNCE LONG AWAITED FHA CONDO RULESAugust 14, 2019: 

 

https://www.federalregister.gov/documents/2019/08/15/2019-17213/project-approval-for-single-family-condominiums

 

FHA, NEW 10/19: FHA now approving spot loans in complexes that are not FHA approved!  Carolyn.drake@primelending.com  602-919-1036

 

Check out the resources below to assist you in understanding the FHA Condo Rules and in serving your clients. (As of October, 2019)  Effective October 15, 2019

 NAR’s Condominium Page        FHA Condominium Rule Assessment        HUD Condo Project Look Up        VA Condo Project Look Up       FHA Single Family Housing Policy Handbook – Condo Project Approval

FHA APPROVED CONDO LIST    https://entp.hud.gov/idapp/html/condlook.cfm      ???Request a Customized Condo Report VA Loan Guarantee https://lgy.va.gov/lgyhub/condo-report

7/24/2018—VIP Mortgage—Condo Loans Just Became Easier:  Fannie Mae has eased some of their rules for financing condos with conventional loans. The biggest change for the better is dropping the rule that required the complex have less than 50% of the units owned by investors. This is no longer an issue as long as the borrower is buying the condo as a primary residence, vacation home, or as an investment property with at least a 25% down payment. Fannie also increased the number of units in a complex that a single entity can own (from 10% to 20% of the units) and increased the amount of commercial space allowed in a complex (from 25% to 35%). These rules only apply to conventional loans.

 

FHA rules on condos are still very strict and the complex must be on FHA's approved condo list which can be found at    https://entp.hud.gov/idapp/html/condlook.cfm

 

FHA:  Q: How do I know whether chandler meadows condominiums located on 286 w. Palomino dr. Chandler Arizona are approved for An FHA loan? And is this a covered facility?  A: The best way is to contact the HOA and ask them as they are the one's who administer and keep on file any FHA approval paperwork which is required by FHA.  The HOA is also responsible for completing the condo certification paperwork required by the lender.  The following website may also be of some help, however it has been my experience that the website is often outdated and may contain incorrect data.

 

https://entp.hud.gov/idapp/html/condlook.cfm  

 

FHA 90 FLIP RULE:  1/28/2021:  The FHA 90 day flip rule says that if you are financing with an FHA loan, the contract can't be dated and signed by the buyer until the 91st day after the seller has closed on the property.  COE doesn't matter here, it's when the contract is executed between the parties.

 

FHA 90 DAY FLIP RULE:  CASE STUDY, W/TOAD AND HIS BUDDY TED O, 10/8/2019:  FHA Purchase Scenario: Original contract violated the FHA Flip Guidelines, so buyer and seller canceled the first contract and entered into a new contract that complies with the FHA Flip guidelines. In this scenario:  I checked with Kelli L, our in-house underwriter.  1) Appraisal that was completed early on during the flip prohibition period is still valid (as long as it has not expired).  2) Escrow and Earnest Money Deposit related to the first (canceled) contract is okay to use. The escrow does not need to be canceled, and the earnest money deposit may be used.    Follow Up: Kelli told me that there are a fair number of FHA lenders that require a new appraisal and new FHA Case Number (basically a total re-do) when faced with a flip scenario where buyer and seller jumped the gun the first time through. Fairway has taken the time to go directly to the HUD Regional Offices to get their sign off. The conclusion is that it’s possible, depending on the lender, to get a different answer so agents need to work closely with their lender when this happens.  MY REPLY: Thanks for the update, pretty much as we discussed.  From time to time I have been told that the lender recommends this as a strategy to get the property under contract, which I disagree with since the contract would not be enforceable.  Plus either party could change their mind and not execute the replacement contract and there would be no recourse.  Good info though!  Jeff.

 

BOTTOM LINE:  THE FIRST CONTRACT IS UNENFORCEABLE AS IT WAS WRITTEN WITH TERMS THAT DIRECTLY CONFLICT WITH HUD GUIDELINES AND WOULD BE IMPOSSIBLE TO PERFORM.  THE CONTRACT CANNOT BE DATED UNTIL ON OR AFTER THE 91ST DAY OF OWNERSHIP BY THE FLIPPER.  THIS CONTRACT IS INVALID.  EITHER PARTY CAN WALK, OR THEY  COULD REWRITE (OR AGREE TO REWRITE) ON THE 91ST DAY.

 

FHA 90 DAY FLIP RULE, REWRITE CONTRACT ON 91ST DAY:  ADDENDUM LANGUAGE: Due to the FHA 90 day flip rule, and to satisfy same, seller and buyer agree to rewrite this purchase contract on xx/xx/xxxx.  Contract will be rewritten with the same terms (or with changes) as the contract dated xx/xx/xxxx.

 

FHA 90 DAY FLIP RULE:  “Due to the 90 day FHA Flip Rule, Seller & Buyer Agree to rewrite this purchase agreement dated xx/xx/xxxx on the 91st day which will satisfy the 90 day waiting period Requirement for FHA Resales.  All terms and conditions shall remain the same.”  Exact date of replacement PC shall be determined by mutual agreement between the parties.”  Title Company to retain Buyer’s Earnest Deposit in the amount of $x in a neutral 3rd party account and is hereby instructed to transfer said EM to replacement escrow account upon notification of execution of replacement contract.”

 

FHA 90 day flip rule     http://www.neighborhood-ing.com/on-the-market/-90-day-flip-rule     http://www.homebuyinginstitute.com/news/hud-issues-fha-flipping-rules-626/

https://hudgov.prod.parature.com/link/portal/57345/57355/Article/8336/Where-can-I-find-an-overview-of-the-FHA-Prohibition-on-Property-Flipping-guidelines

https://www.thoughtco.com/huds-anti-flipping-rule-protects-homebuyers-3319963

FHA Eligibility     https://www.ifreedomdirect.com/fha-loan/eligibility 

FHA: 90 DAY FLIP RULE FILE PROCESS:  Just an FYI, clarified with Ashley G (7/18/19) regarding the FHA 90 day flip rule. The original file will be cancelled as follows: 1) Parties will sign mutual cancellation and agree to rewrite on the 91st day, 2) Escrow will provide cancellation letter for HomeSmart File. Agent will then create a new file with the new purchase contract and related documents.   

FHA Appraisal sticks for 120 days.  FHA Concessions = 6% MAX.      

FHA 90 day flip rule.    https://www.thoughtco.com/huds-anti-flipping-rule-protects-homebuyers-3319963

http://www.homebuyinginstitute.com/news/hud-issues-fha-flipping-rules-626/

https://hudgov.prod.parature.com/link/portal/57345/57355/Article/8336/Where-can-I-find-an-overview-of-the-FHA-Prohibition-on-Property-Flipping-guidelines

 

FHA: If appraisal is conditioned on repairs, and seller refuses, buyer can cancel on Loan Denial/Unfulfilled Loan Contingency.  Amendatory Clause/RE Certification will protect buyers Earnest Money.

VA Appraisal sticks for 180 days.  VA Concessions = 4% MAX.

http://www.fhanewsblog.com/2015/03/reader-questions-about-fha-loan-appraisals-when-do-they-expire/

 

FHA--Roof should have at least a 2 year life left…     http://www.fha.com/fha_article?id=257

FIDUCIARY DUTIES TO CLIENT:  ALSO SEE ADRE PAGE FOR COPY OF FIDUCIARY BULLETIN AND BROCHURE WITH HYPERLINK TO ADRE