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RED FLAGS/DISCLOSURES Common red flags include: Cracks in drywall or stucco, water stains on the ceiling, water stains anywhere, a moldy or mildew like odor in the property, a multitude of pest control items, an unkempt or discolored pool, obvious recent correction of a leak, crack or stain, casual conversation with seller resulting in a possible disclosure, obvious presence of wildlife, such as snakes, coyotes, javelin, or others, or presence of condiionns, security bars on all windows and doors (and perhaps on all of neighbors windows and doors), any type of stain on ceilings, walls, flooring, water draining toward the property, cracked or broken fencing or walls, roof rat or other vermin traps on the property, termite treatment drill holes in or around the property, grey water draining into yard, a wash on or adjacent to the property, a vague answer on the SPDS, insurance claims on the property, obvious rust on any plumbing or water heater, recent renovations or additions to the property, obvious external factors such as power lines, very noisy dogs, low flying planes, or canals, raised or missing roof shingles or tiles, a vacant lot for sale next door, a multitude of properties for sale in the same neighborhood, dilapidated or leaning structures. REFERRAL: NON-RESPA REFERRALS, IE, SOLAR, WATER, SECURITY, 3/9/2021; Q: I've been contacted by many companies in the past and presently about being paid a "referral fee" for sending them clients. Is there a dollar limit or disclosure that has to be considered for any time of referral payment? I've always declined as I don't want the hassle, but now solar companies are approaching me, since that's my niche in business, and they are offering even more lucrative referrals. Thanks for any information about this.A: Hi X, I talked with our DB Rich LaRue...we all know these "referrals" occur from time to time with solar, security, water purification and other 3rd party vendors that have nothing to do with RESPA. So, rather than take a published position or create some new policy, at this time Rich prefers to just keep them quiet and let agents deal with them individually and keep any details about that under the radar, so to speak. So for now, that is our position, and like anything else is subject to change if circumstances change. Feel free to reach out if you would like to discuss further. Take Care, Jeff.
REFERRAL, PAYOUT PROCESS: Per AshleyXG 9/2020: 1) In house referrals and 2) outside referrals: Both are paid from title unless the file is incomplete then checks are sent to HomeSmart. If we have W9 we will release check to outside agent. REFERRAL EXCHANGE PROGRAM: Send to Agent Services, here is their response email: Q: Hello - Is there a person, department or number I can call to learn more about the referral exchange program? A: We're pretty hands-off when it comes to the Referral Exchange. You will want to log in to realsmartagent.com, click MARKETING and then click Referral Exchange to get started. The number provided for help setting up your account is: (415) 683-7732 If you give that number a call they should be able to answer your questions. Let me know if you have any trouble getting a response. REFERRAL EXCHANGE PROGRAM: CASE STUDY: Q: A current client of mine is selling his home and moving to Middletown, Delaware. Asking if I/we have any resources in that city. If not, how would I connect with an agent there to help establish a relationship and perhaps a referral fee? A: We don't have an office in Delaware yet, but here is a contact for the HomeSmart operations manager in Maryland. Shoot her an email and see if she can direct you to someone in that area. Her name is Sam Sinanan, her email is sam.sinanan@hsmove.com Otherwise, you would google top producing realtors in the area and reach out to whoever you choose...NOTE: We also have a partnership with a company called referral exchange, there is a link in the marketing tab on your RSA portal called Referral Exchange. They register agents to send and receive referrals, for a fee of course. I'm not too familiar with how they operate, but you might want to check it out. Let me know, Jeff. SEE TABLE OF CONTENTS PAGE FOR MORE ON REFERRAL EXCHANGE PROGRAM REFERRAL PROCESS: YYYY, these are all documents that our agents have access to and utilize for this type of transactions. 1) As for the referral, you will need to complete an outgoing referral form and have them sign acknowledging they will be paying you a referral fee. The form is on your RSA Portal under the downloads link. 2) The HomeSmart W9 is also on your RSP Portal under the downloads link, click on downloads and then type W9 into the search box...the W9 will populate for you there. 3) The HomeSmart Corp License is also on your Portal under the downloads link, search Brokerage License and it will populate for you there as well. OR Q: I am referring out a listing. When should I send the referral form to the other agent? Before or after it is listed? And, I fill out and send to them, correct? A: Theoretically, you should have the form completed by the originating agent and brokerage and the receiving agent and brokerage prior to allowing contact with the client. It doesn't always quite work that way, but that is the safe bet to discourage anyone from trying to go around and bypass you to work directly with the client. OR We need the following uploaded to the file before we can release the referral check: 1) a signed copy of the referral agreement, 2) a completed W9 and 3) a copy of the Brokerage's license prior to paying any referral to an outside Brokerage. Copies of most real estate licenses can be obtained online through the Department of Real Estate for each particular state. REFERRAL: SIGNATURE: Please sign off on this referral form and return to this email address for a broker signature. The agent should always sign first to document your acceptance of the referral terms. OR “Our policy is that the agent must sign showing their agreement to the terms prior to the broker signing. Please sign and resubmit and I'll sign off and return right away.” REFERRAL TRANSFER TO NEW BROKERAGE: Q: I have a referral file, how do i transfer that to new brokerage? A: We don't transfer referrals. It will be paid to you as it normally would be paid. REFERRAL: FILE SET UP PROCESS, Unknown Dollar Amount, Address: Q: recently got this referral and it's my first one - What do I do with the form? Is it something that gets signed by a broker? And/or uploaded to my RSA portal? A: I signed this referral for you. Please sign it yourself and return it to the agent that you have referred the business to. You will also need to create a referral file with this document in RSA. You can wait until you have a property to upload the document so the closing department can reference something when the check comes here! Stay in touch with the agent so you know what is happening. Q: When I go to enter it in my HomeSmart portal, it asks for a referral amount which is a percentage... But it seems like it wants me to enter a dollar amount. A: Two options here: 1) Set it at 0 and the commission dept will input the number once the check is received, or 2) Set it at 0 and edit the number yourself once you find out the amount. OR Referral agreements do not fall under the "5 day" submission rule, basically you can submit those right up to closing. So, you could hold the form until you have an address, dollar amount, etc, or you can set up the file with "temp" info and go in and edit that once you have the updated information. Please let us know if you need any further clarification on this… REFERRALS: AM I ALLOWED TO CO-LIST WITH AN AGENT IN PRESCOTT? Q: Hi - I have a potential listing that is in Prescott Valley. I contacted a HomeSmart agent up there about listing the property for sale. I am not part of the Prescott Valley MLS - and The Realtor in Prescott Valley is not part of the MLS here in Phoenix. So I am assuming we cannot co-list. Would it be ok if I listed the property down in Phx and the other Realtor listed it up in Prescott Valley? (Trying to get more exposure is the purpose.) Or if there is a better way. Thanks. A: XYZ, You are correct, you cannot do a co-listing as that is a separate brokerage with a separate ADRE state license number. The seller can only sign one ER, so the property cannot be listed in both (unless the listing agent is a member of both). It has to be one or the other, but not both. Or, you could just refer to the agent up there. REFERRALS: See rule of 3 COMMERCIAL BROKERS: Ken Clark, 602-803-0933, Ken Clark Properties, Steve Weber, 480-752-2100, Peak Commercial Properties, Laurel Lewis, 602-762-1795, NAI Horizon AJF INSPECTIONS AND ENGINEERING ADVANTAGE HOME INSPECITONS BURNS PEST CONTROL BUDGET BROTHERS TERMITE AND PEST Jack the Roofer http://www.waagesurveying.com/ Water Testing IBE Labs Spencer Ropte. Lab Manager, Inner Basin Environmental, LLC, 2355 North Steves Blvd, Suite C, Flagstaff, AZ 86004 928-440-5168 https://www.paradisevalleyseptic.com/residential-septic-services/
Mold Inspections: Pure Maintenance; https://puremaintenanceaz.com/mold-removal/ RESA Environmental Solutions; https://www.resaaz.com/ LAND: Mike Mullan, 602-531-8256 or email at mike@classicsouthwest.com
Real Estate Attorney’s: 5/20: Michael Orcutt, Esq. Lipson Neilson P.C. 5343 North 16th Street, Suite 140 Phoenix, AZ 85016 Ph: 602-626-8888 │ Fax: 602-626-5588 MOrcutt@lipsonneilson.com CELL: 602-326-6379 4/5/2021: Rick Mack, ZELMS ERLICH & MACK 4600 E. Washington Street, Suite 300 Phoenix, AZ 85034 O 623.250.6954 rmack@zelmserlich.com zelmserlich.com
5/20: Milt Wagner Wagner Law 340 East Palm Lane, Suite 255 Phoenix, AZ 85004 (602) 456-4166 Patrick McQueen, website: https://www.mandglawgroup.com/
5/20: Adam Buck Radix Law 15205 N. Kierland Blvd. Scottsdale, AZ 85254 602-606-9300 Combs Law Group, Chris Combs: https://www.combslawgroup.com/
Andrew Hull (Hull, Holliday & Holliday, PLC) http://www.doctorevictor.com/ Forms and notices Bob Bass 602/274-9452 EXP Dax Watson 602/626-8888 BURCH & CRACCHIOLO 602-274-7611 Per Laurie MCdonnell: An attorney can send letter in advance of taking any legal action per se. A letter even an email from attorney can generally get things back on track. You should have referrals in broker drive. (Laurie) PER TRUDY: the attorney fees will be on the buyer. we do not pay. just wanted to clarify. (Trudy)
REFERRAL AGREEMENT: 4/14/2021: ZachNeff situation: I talked with Paul at the aar legal hotline a few minutes ago regarding this situation with our agent and the AAR Referral Agreement in general. His opinion: Unless there is language in the Referral Agreement to the contrary, it is an enforceable, legally binding contract between the brokerages up to or even past the expiration date as long as a sale or lease agreement has been signed prior to end of the Term, regardless of the closing/settlement date. It does not matter if it was cancelled and relisted multiple times, it is specific as to the seller and property location. It would be enforceable against the brokerage even if a different agent from the same brokerage ended up listing and selling the property on behalf of the client.
REFERRAL TO TUCSON: Q: I have a buyer that I referred to the HomeSmart franchise office in Tucson - see attached. What form do I submit to our agent portal? A: For an outside brokerage you would use the Referral Agreement on zipForms. This one is only for in-house (corporate) agents. Tucson is a Franchise location and they operate under a separate brokerage license from ADRE.
REFERRAL TO CALIFORNIA: Q: I am paying a referral fee to a CA agent. Title is asking me if they should send the referral agents check to Homesmart or directly to the agent!?! A: 7/22/2020: Per the closing dept, referrals are usually paid directly from the title company to the agent, so yes title can pay the agent directly. However, if the HomeSmart File is not marked complete, the referral payment would be sent to HomeSmart and released once we confirm we have a W9 from the outside agent. Referrals are usually paid directly from the title company to the agent, so yes title can pay the agent directly.
REFERRAL FEE TO CANADA: Yes, 1) referral form 2) copy of license 3) copy of W8 (tax form) REFERRAL FEE, CLIENT, CAN PAY TO CLIENT?: Q: Can I pay a referral fee to an agent that is also the client? I'm representing a seller that has a license in California. A: Krista, that would be allowable, but why not just reduce their commission fee to you? If they are paid, they will be 1099'd for the income. A reduction in commission that they pay you would not be a taxable event to them (or you either for that matter…) REFERRAL: LATE OUTSIDE AGENT REQUEST FOR REFERRAL FEE: Q: I am a dual agent on my listing. Contract is dated the March 5th. The Buyer is now telling me that she is a broker in Washington State, and would like a referral fee. This was never discussed prior to contract acceptance. Do I owe her a referral fee? and if not how do I tell her I am not going to pay that in a tactful legal way? A: You do not owe a referral fee. We are required to tell one another at the earliest practical opportunity that we are a licensed RE agent, that includes other realtors, prospective clients, anyone that we interact with during the normal course of our business. And she is just telling you this now? Without a signed, written commitment to pay a referral fee, then there is no obligation or requirement to pay the fee. That being said, hopefully she doesn't try to cancel the transaction if you tell her no, you will just have to play it out and see what happens and decide accordingly. REFERRAL: LICENSED REALTOR, Q: Would it be ok if I represented a licensed realtor buying for herself a new build who’s broker doesn’t allow her to represent herself? She’s a good friend and I’d want to do referral fee of all of it minus the &300$ owed to HomeSmart back to her. Contract dated three months ago due to close next Friday and builder ok with allowing me as realtor on record. A: A bit unusual at this point, but would be ok as long as the builder is good with it. Jeff. Q: Would I owe taxes on referral amount? A: Hi X, the first comment is that you need to run it past your accountant :) My understanding is that we go off of what's specifically shown on the final settlement statement as your commission when we issue our 1099's, so that's the amount you will be taxed. That said, if you are taxed on money that you actually referred you should be able to expense that on your taxes. REFERRAL, RELEASE FORM, RELEASE LANGUAGE: Nothing formal, sample: Q: My clients often ask me if I know a good contractor: plumber, electrician, roofer, pool guy, etc. I often give a few licensed references and explain that I have no business affiliation nor am I paid any type of referral fee. Is there a release form that I can have them sign to protect me? A: We don't have a release form for that, but you could say something in an email like "While referrals may be provided by agent from time to time, client acknowledges that neither HomeSmart or it's agents are affiliated with any of the referrals, do not guarantee their services and do not benefit financially or receive any type of referral fee from services provided." REFERRAL: WHO GETS PAID? Q: I have a New Build closing soon. Back in February I had a referral agreement with a agent from CA regarding his son purchasing a home in Goodyear. The Dad at the time was a active agent with a brokerage. The son was trying to sell his home is CA through his Dads brokerage. During all this they had a falling out with that broker. The Dad went inactive and the son ended up selling his home through a different broker. Now the New Build here in Good Year is getting ready to close. The Dad finally sent me over the w9 and Broker license from the original broker last night. I get a call from the son today saying he is worried his Dad will not get paid for the referral from that Broker because of the bad blood between them. I inquired is his Dad active and he said no at this time. A: Mike, our hands are tied on this. We will have to pay whoever the broker was when the referral agreement was entered into. That would be the fathers employing broker at that point in time. The father can still be paid by that broker, even if he is no longer licensed with them. REFERRALS: OUT OF STATE REFERRALS: Q: How do I find a referral in Utah? A: We don’t maintain a list of referral agents in other states. You will have to find someone online...maybe search the larger brokerages in the city where your client wants to buy...you can usually see who the top producers are. You will have to do some legwork but you should be able to find someone willing to work with a referral client. REGISTRAR OF CONTRACTORS: (ALSO SEE NEW BUILDS): Q: I’ve been trying to reach the Registrar of Contractors to verify their minimum industry standards regarding new home builders and their warranties. I have found where it states warranty coverage needs to be two years, however didn’t they used to also state 10 years for structural (given the circumstance)? A: Joni, I am unaware of the builder warranties, you will need to confirm with the registrar of contractors and/or the builder themselves. I would be interested to know what you find out. (From Agent 10-9-18): A: Two years workmanship only! No structural…….I could swear in the early 2000’s it was different, but maybe it changed! Or maybe I had been blessed to work with 2-10 warranty REGISTRAR OF CONTRACTORS, LICENSING REQUIREMENTS, AZ REGISTRAR OF CONTRACTORS: (Also see unlicensed builder…) https://www.aaronline.com/2015/11/20/arizona-registrar-of-contractors-licensing-requirements/ REINSPECTION: Section 6j, line #278-280: Receipts/Repairs to be completed three (3) days, or “x” days prior to COE. REINSTATE OR RESURRECT PURCHASE CONTRACT OR LISTING: “Contrary to the prior cancellation instructions, Buyer and Seller acknowledge that the terms and conditions of the original purchase contract dated xx/xx/xxx are reinstated, the cancellation is rescinded, and the purchase contract is now considered in full legal force and effect.” (Close of escrow is to be May 25, 2016. Should Buyer not perform per above, Buyer is aware that the earnest money shall be forfeited. All other terms and conditions remain the same). REINSTATE LISTING: “Contrary to the prior cancellation instructions, Seller & Listing Agent acknowledge and agree that the terms and conditions of the original listing agreement dated xx/xx/xxx are reinstated, the listing cancellation is rescinded, and the listing agreement is now considered in full legal force and effect.”
REJECTED OFFERS: Q: Hello, for a rejected offer on a house, do I have to upload something to the portal? Thank you. A: Yes. 1) Make sure the rejected box is marked and initialed by the seller on line #473 or 2) If rejecting a counter offer, write "REJECTED" in bold letters across the top margin of the counter offer and have your client initial next to that. 3) Deliver a copy back to the other agent. 4) email rejected offers to paperwork@hsmove.com. In the subject line write in cap letters "REJECTED OFFER". We will keep on file for the minimum one year as per ADRE requirements. REJECTED OFFERS: Yes, that is our policy and also recommended by both ADRE and AAR as we need to keep rejected offers on file for the minimum statutory requirement of one year. Line #473 needs to be marked and initialed by seller as confirmation that the offer was in fact rejected. You should email all rejected offers to Paperwork@hsmove.com with the words "REJECTED OFFER" in the subject line. We will keep on file as noted above. REJECTED OFFERS: Q: Before submitting an offer & after talking to the agent, I had reason to believe that the agent was not going to present the offer to the seller, is there anything that we can do about this or not? A: We advise all of our agents to have their client mark and initial line #473 if the offer is rejected. There is no provision that says it MUST be done, rather we want to do it as a professional courtesy, as we would appreciate that same thing being done for us and our client. Unfortunately, there is nothing you can do or say to "force" compliance with this request. NEW in 2019: SOP 1-7, Send email asking for documentation! SEE CASE STUDIES PAGE LATER IN DOCUMENT: GODDAMMIT! If you want to reject the counter offer you can write the word "REJECTED" in big bold letters across the top margin and have your client sign or initial next to that. RELATED TO SELLER OR BUYER: “One or more members of the selling/buying LLC holds an active Arizona Real Estate License.” OR “Seller/Buyer holds an active Arizona Real Estate License and is a managing member of the selling/buying entity/LLC.” OR “Buyer is a principal of the buying entity and holds an active Arizona Real Estate License.”OR “Seller is a principal of the selling entity and holds an Active Arizona Real Estate License.” OR “Listing Agent is related to Seller.” OR “Selling Agent is related to Buyer.” (Addendum): “This document serves to inform all parties that the Listing Agent/Selling Agent is related to the Seller/Buyer.”OR “Selling agent is related by marriage to Buyer’s ex-husband.” BOYFRIEND/GIRLFRIEND: Q: I am going to be listing a property owned by my mom's boyfriend they both live at the property but are not married, do I have to disclose that I have a relationship to the seller, since since they are not married he's technically not related, or is he? A: NO. You only have to disclose if your are related, if you are not related then there is nothing to disclose. Q: I currently have a listing and the seller is my mother’s ex husband. He is not my father so there is no blood relation. Do I need to disclose this? A: Hi X, No, that would not be a required disclosure since they are no longer married and there is no blood relation between you and the seller...Good luck with the listing! RELO: Q: One of my clients is taking a job transfer and his company offered him a relo package. They utilize Cartus Relo Services. He wants to hire me to sell his home and wasn't sure if Cartus would let him choose his own agent. It seems he can as long as I am registered, as well as HomeSmart. Do you know anything about this? A: Hi X, He will need to investigate and understand whether or not his relo package will let him choose his own real estate agent, some do and some don’t. If it does and he chooses you, there will be additional paperwork and they may have additional requirements/processes so be prepared for that. Otherwise, we are good to go and work with these relo companies from time to time. JEFF. REMOTE CONTROLS: Q: If seller has lost garage door openers, is seller required to obtain new ones and convey them to buyer at COE? NO, section 1g pertains to "existing" means to operate fixtures and property. Therefore, if the item is not in sellers possession, there is no obligation that it be conveyed to buyer.
REMOVE CHECKMARK: “This Addendum removes the checkbox on line# X of the RE Purchase Contract. OR “Buyers initials on line #182 of the purchase contract are hereby removed (or are hereby considered removed or is hereby considered initialed). REMOVE SOME TERM OR CONDITION FROM THE PC: You should prepare an addendum and say something like "The parties acknowledge and agree that any post possession or post occupancy agreement (or whatever) that may exist for this transaction is hereby considered null and void," or something similar, and have the parties sign off on that. REO: Real estate owned or REO is a term used in the United States to describe a class of property owned by a lender—typically a bank, government agency, or government loan insurer—after an unsuccessful sale at a foreclosure auction. Q: What is needed on this one if there are no inspections and there are no disclosures because it is bank owned? A: We would still like the BINSR with the box marked "premises accepted" and the buyer signature on page 1 even if there are no inspections. Otherwise, with Bank Owned REO's, we know they will not sign all of our required documents, the agent should use the missing paperwork form to explain which document(s) will not be forthcoming. REPRESENTATION DOES NOT REQUIRE COMPENSATION: ie, procuring cause case REQUEST LICENSED CONTRACTOR FOR REPAIRS WHEN WRITING CONTRACT LANGUAGE “In the event that repairs are requested by the buyer as a result of the buyer inspections, seller agrees to use a licensed contractor or a licensed trade professional to complete all identified and requested repairs.” OR “All/Any BINSR Repairs to be completed by Licensed Contractors. It is against state law to hire unlicensed contractors for Repairs Costing greater than $1000.00.” REQUIRED DOCUMENTS: Q: What forms are needed for a transaction? A: Carla, I have attached the list of required documents by transaction type, keep it handy for future reference. (See required docs pdf or policies & procedures, page 6, 7, 8. REQUIRED DOCUMENTS, LEASE: Q: How do you do a lease? A: Documents needed for a lease listing include the 1) ER Listing Agreement (zipForms), 2) Real Estate Agency Disclosure and Election (zipForms), 3) MLS Profile Sheet (zipForms), 4) Copy of MLS Printout/Plano, 5) Lead Based Paint (if applicable) (zipForms), 6) Residential Lease Owner's Property Disclosure Statement (zipForms), 7) Lease Owner Advisory (zipForms), 8) Landlord Owner/Agent Addendum (if applicatle) (HomeSmart Form). Commissions are negotiable, search the MLS to see what comparable properties in the same general area are offering for compensation, that would be a good indicator of what fee's to charge. RESALE (HOA) RESALE DEMAND LETTER: Ordered by Title Co. HOA will disclose any seller violations. Violations should be cleared prior to COE, otherwise BUYER WILL BE RESPONSIBLE FOR VIOLATIONS IF NOT CLEARED PRIOR TO COE!
RESCIND: SEE WITHDRAW RESEDENTIAL LEASE OWNER PROPERTY DISCLOSURE STATEMENT (RLOPDS): Q: We noticed HomeSmart requires the Residential Lease Owners Property Disclosure Statement for rentals. This seems to be an issue each time since that isn't typical for leases. So we end up having to submit the missing paperwork form and the backup email with each one from them saying they don't provide that on rentals. Is there a way to adjust/waive that requirement on the rental transactions since no one actually provides that? Just trying to make everything run smoothly and quickly on our end since my team does a lot of rentals and this has slowed things down since we started our transition from the previous brokerage. A: Hi (agent name), Both ADRE and AAR advise that it is a recommended "Best Practice" to have the RLOPDS as a requirement in rental files. Residential lease owners have certain obligations regarding the Landlord Tenant Act regarding disclosures, and the RLOPDS is where many of these disclosures are made. JT RLOPDS: Q: For this transaction the landlord does not have a SPDS and the property management won’t sign the hold harmless SPDS document. What should i do? A: Kelly. as you know, the AAR Residential Lease Agreement does not require an RLOPDS, so unlike a Sale file we don't require it or a HH Agreement signed by the Tenant. However, because Arizona law requires all owners to disclose material facts, we require the RLOPDS on lease listings or a HH agreement when the owner declines to complete one. AA: If they will not provide the RLOPDS, please submit the missing paperwork form to your file with a brief explanation of what you have said here in your email. Attach any backup documentation you have regarding that, ie, a copy of an email where you are requesting the document and their response stating they will not provide. We will be able to clear the file with the missing paperwork form. Take care, JT. RESIGN AGENCY/LISTING: “Agent hereby delivers written notice to buyer/seller that xxxx is immediately resigning their Agency Relationship/Listing Agreement/Buyer Broker Employment Agreement with yyyy and will no longer represent yyyy in this Listing/Purchase Transaction dated xx/xx/xxxx. “Client Refuses to Cooperate.”
RESPA-IT’S NEGOTIABLE! Q: I strongly resent the Listing Agent SUE BENTLEY Countering our Equitable Title Agency.(for any reason... let alone ownership) I have no idea which Title Company does the "Underwriting" for Magnus Title and the LA did not even provide a Phone Number. Sue's Only Comment was: "It's Negotiable" My understanding is: According to RESPA Laws... the Buyer selects the Title Agency that will hold their Earnest Money??? And, Execute their Loan Documents. Correct? A: Hi Teresa, ownership has nothing to do with it, any way you look at it, it's a negotiable point. Yes there is a RESPA aspect to it, but the reality is that it gets negotiated all the time. If the Buyer doesn't like that term, they are able to send a counter offer #2 with the title company of their choice. KF RESPA RULES, SECTION 9: A home sale cannot be conditioned on the use of a specific title insurance company. Q: Are agents violating Respa Section 9 when putting a specific title company in the counter….is this considered a condition of sale? Also, if I want to counter an offer with a different title company is there verbiage I should use? Can I say something like “seller is requesting XYZ title” would that be a condition of sale if the counter had other changes on it? A: Hey, Barb. As you may know, Sec 9 of RESPA doesn't prohibit the Seller from countering the Escrow Company. It simply prohibits a Seller from requiring the Buyer to purchase title insurance from a particular title insurance company (the key word is insurance). (Plus, in Arizona the seller pays for the owners (buyers) policy). And, most of the escrow/title companies in Arizona are well aware of this so they are set up as title agencies. In a nutshell, that means they can offer title insurance policies from more than one underwriter (ie: title insurer), NOTE: The best practice when the Seller feels strongly about who handles their payoff or trust documents is to simply counter the "escrow" information on Lines 115-119. Good luck! http://realtormag.realtor.org/law-and-ethics/law/article/2013/03/respa-rules-agents RETAINER FEES: HomeSmart will process checks received as retainer fees and charge the Agent 10% of the retainer fee, with a minimum of $50.00. All retainer fees shall be made payable to HomeSmrt and deposited with HomeSmart, along with the Buyer Broker agreement. All retainer fees in excess of $2500 must have prior written approval of the broker. Release of the retainer fee to the agent is at HomeSmart’s sole discretion, prior to the completion and satisfaction of the Buyer Broker agreement. RETAINER FEE’S: (Also see LISTING, Retainer Fees):Non-refundable with BBA and ER. Retainer fee’s should be made payable and submitted to HomeSmart, not the agent. The retainer fee is made payable to HomeSmart, we retain 10% ($50 minimum), we pay the balance to you. Process: Q: I'm a seasoned agent but new with Homesmart. I generally do $3000 flat fee listings and I usually take a $300 retainer up front which covers the expenses for the photographer and the post installation. My clients are fine with this and sign a couple of documents that state the is non-refundable for ANY reason. The remaining $2700 is due at close of escrow. Im taking my first listing tomorrow where I plan to take a retainer and I want to have a better understanding on how this is processed. I will have them write a check to HomeSmart (I’m guessing you don't take credit cards). Agent services told me that HomeSmart would deduct 10% and send me the rest. Im OK with that as long as that amount is deducted from the total amount I need to pay when the file closes. Im not sure what all of those fees are but I dont have the volume to be wasting 10%. Please advise how this will be handled. A: You are correct, when we receive the retainer check we will process it with our normal misc. file fee which is 10%, however there is a $50 min. and a $300 max. The $50 min fee taken on this amount will be applied to your transaction fees on your sale file. Ok. Just to clarify clearly, the total fees charged when the file closes escrow will be reduced by the 10% charged on the retainer? Correct! Anything paid on a retainer will go towards the fees on the actual sale (reduced by that amount). RETAINER FEES: Q: I would like to charge a $500 retainer, non-refundable to all prospective tenants I represent in order to be paid adequately for services rendered, even if they choose to go a different route to obtain residence. Am I able to do this using the BBA? A: Yes, you could do that. And, the amount we withhold in retainer fee's would be credited to withholding for any additional amount you would earn in a rental transaction. I have included the retainer fee withholding amount for you as follows: Miscellaneous Income (Including Forfeited Earnest Money, Retainer Fees, Listing Cancellation Fees, Consulting Fees, Buyer/Broker Agreements, and Mediation Payments): 10% of amount received (Min. $50 – Max. $300). REVISE OFFER: If you have submitted an offer to the seller, and your buyer wants to revise/amend the offer (competing offers), you have three basic choices/options: 1) Addendum: This is an addendum to the offer dated xx/xx/xxxx, originated by the buyer. Purchse price to be changed to $x. Line #437 time for acceptance is hereby amended to read xx/xx/xxxx. This Addendum is to be executed simultaneously along with the offer dated xx/xx/xxxx... OR 2) Counter Offer: This is a counter offer to the offer dated xx/xx/xxxx, originated by the buyer. Price to be $x. COE to be xx/xx/xxxx... 3) Rescind/Withdraw the offer and Resubmit the entire offer. May be best if many terms are going to change.
RIGHT OF SURVIVORSHIP: SEE DEATH, RIGHT OF SURVIVORSHIP
RING DOORBELL: Q: Do these convey? Not seeing it purchase contract. A: It is attached and a tool is required to remove so it would be considered a fixture and should remain with the property. Unless it is excluded in the purchase contract or counter offer or on and addendum. AAR Forms Committee might add that to the pc on the next revision...Take care, JT. RISK OF LOSS PROVISION: AAR Residential Real Estate Purchase Contract, section 8b, RISK OF LOSS: If there is any loss or damage to the Premises between the date of Contract acceptance and COE or possession, whichever is earlier, by reason of fire, vandalism, flood, earthquake, or act of God, the risk of loss shall be on Seller, provided, however, that if the cost of repairing such loss or damage would exceed ten percent (10%) of the purchase price, either Seller or Buyer may elect to cancel the contract.
RISK REDUCTION FEE: WHAT DOES THE $295 ANNUAL RISK REDUCTION FEE COVER?
Annual fee due from ALL agents on first transaction closed in current calendar year regardless of plan option. Allocated to the following expense categories:
1) Continuing Education (CE) and licensing compliance training for agents. 2) General training for employees and support staff. 3) Covers legal compliance, litigation and review of transactional documents. 4) Includes approved transactions being conducted by company, agents and independent contractors. 5) Offset against risk management and E&O policy premiums. 6) Reserves for general legal expenses and cyber security. 7) Misc expenses.
Attachment: Independent contractor agreement (see sect “c” covenants of company) Attachment: Schedule “A” fee schedule Attachment: Risk reduction review addendum
RLOPDS: See Residential Lease Owners Property Disclosure Statement RULE OF 3: Always give a minimum of 3 referrals for a vendor referral request (inspector, lender, home warranty, etc.). NOTE: You need to be careful when offering your clients referrals for vendors...if there are issues or problems they could always come back to you as providing a "negligent referral" for whatever the work order specified. That being said, we should always remember the "rule of three", that is, give a minimum of three referrals and let the client complete their own due diligence on which one they want to hire for the job. |
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Shared expense, all agents contribute.
Company wide risk reduction activities (ongoing).
(vs E&O which is transaction specific)
Outlined in ICA and Fee Schedule |
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Q: why am I being charged Additional Risk Reduction fee on my every transaction. A: Hi X, In accordance with the ICA you signed at time of hire (updated annually online), a $295 "annual" risk reduction fee is collected on your first closed transaction of the calendar year. In some cases, it gets added to more than one file, but it is only collected on the first transaction that closes. If you were charged this fee more than once in 2020, please reach out to the Closing Dept for assistance. Thanks! |
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Prescott |