Special Town Hall Meeting

June 13, 2017 9-11 am

Orange Beach Community Center
Orange Beach, Al. 36561

What do we really know?

Knowing the letter of the law is not anyone’s favorite part of selling real estate, but it is arguably one of the most important parts of our job. Though we all work and act in ways that we believe to be appropriate and within the legal guidelines, too often agents are unknowingly breaking laws.

Creatures of habit

We are creatures of habit. We do things a certain way because that’s the way we have always done it. We may not even know why we do things a certain way but we certainly don’t want to change. To change would get us out of our comfort zone.

A Town Hall style meeting

Alabama Real Estate Institute is always trying to provide the best quality information available. We strive to stay abreast of the most current laws affecting the real estate industry and then we pass that knowledge on to our students. This is the reason we decided to have this “town hall” style meeting. Politicians use this type venue to get their message out and to gain support. So I decided to try it.

Attorney General speaks out

The main speaker for our meeting is Mr. Chris Booth. He is an Attorney General, appointed by the Governor of Alabama. He is also the senior counsel for the Alabama Real Estate Commission. I view him as the person that will prosecute us if we violate the state licensing law, and he is the one that will defend us when we’re in the right. Therefore, when he speaks, we should listen. During this meeting we will learn things that are not printed in articles.

Some of the topics discussed

Topics that will be covered in this town hall meeting are listed below; plus questions that you may want answers to.

  • Complaints received by the legal department of the real estate commission
  • What cost should be included in an estimated closing statement
  • Recovery fund verses E & O Insurance
  • Disclosure of caveat emptor and agency at initial contact
  • Power of Code of Ethics compared to the law
  • Property management issues and agent rentals
  • Disclosure of earnest money not collected
  • Real estate signs on non-listed property
  • RECAD and estimated closing statements as they relate to commercial property
  • Receipt of commissions bypassing the broker
  • Concessions and compensation as an inducement to purchase

It cost nothing for you to attend with the exception of your time. Breakfast type food will be provided at not cost to you. We do, however, ask that you RSVP me so I can save you a seat and make sure we have something for you to eat.

Please make sure you thank these sponsors for helping make this meeting possible.

Anchor Title and Excrow

Gold Star Realty

ACOPIA Home Loans

 

 

 

 

                       

 

 

Insulating Against A Law Suit

Generally most of my posts are adaptable to sales in any industry. Today I am specifically addressing real estate sales. If someone practices real estate very long, they will face legal issues; especially if they sell a lot of real estate. There is a very simple explanation for it too. It’s impossible to please everyone, and especially, if you represent both the buyer and the seller. In this type situation the buyer feels like the seller took advantage of them, while the seller feels like the buyer took advantage of them. As a Realtor® who is wedged between both parties thinking the agent showed partiality to the other party in the transaction. To complicate matters worse, in a typical real estate sales transaction there are numerous entities that have specific requirements and guidelines that must be followed.

Managing Your Risks

Generally most of my posts are adaptable to sales in any industry. Today I am specifically addressing real estate sales. If someone practices real estate very long, they will face legal issues; especially if they sell a lot of real estate. There is a very simple explanation for it too. It’s impossible to please everyone, and especially, if you represent both the buyer and the seller. In this type situation the buyer feels like the seller took advantage of them, while the seller feels like the buyer took advantage of them. As a Realtor® who is wedged between both parties thinking the agent showed partiality to the other party in the transaction. To complicate matters worse, in a typical real estate sales transaction there are numerous entities that have specific requirements and guidelines that must be followed.

In most real estate sale transactions there are two separate agencies involved. 

More times than not one agency will have the listing and represent the seller while the other agency will represent the buyer. [Read more…]

Understanding Caveat Emptor

 Alabama is Different than most other States…. I can’t say for sure but based on my research, the only states that are still caveat emptor states are Virginia, Arkansas, and Alabama. When a person buys real estate in these three states, they need to fully understand it is their responsibility to make sure they know what they’re getting, that it’s in good condition and works properly. When the buyer does his due diligence to have the property inspected, their legal rights remain in place after closing should some latent structural defect appear. If a buyer elects not to have the proper inspection done, closes on the transaction and then a latent structural defect appears and the buyer sues for damages; numerous Supreme Court cases have ruled in favor of the seller and stated caveat emptor; the buyer is responsibility to inspect the property prior to purchase.

BUYER BEWARE

This is a topic I try to talk about in every class I teach because it is the most important and the least understood law. I intentionally try to scare real estate agents to get them to understand the importance of the law and the effects it has on people buying real estate in Alabama. Today I will tell you how to see the law as it is written, disclose the other states that have the same law, and explain the dangers and remedies associated with caveat emptor.

Caveat Emptor is the law in Alabama…..

The Alabama Supreme Court has held caveat emptor to be the law in a consistent line of cases. Everyone should be on notice that there is no warranty which comes with the sale of a used home.

Real estate agents were taught when completing their educational requirements to get their license that caveat emptor is a Latin [Read more…]

The Process for Listing your Home for Sale

Cluttered -vs- Appealing

Selling your home is a very simple process isn’t? You simple contact a real estate agent, tell them what you want for your home and they list it. Correct? No it’s not quite that simple even though you won’t have any trouble finding a Realtor® to list it for you. Buying and selling real estate is one of the largest financial decisions most people make during their life-time. Both are very legalistic processes.  Every action we take is based on own personal decision that we make which have consequences. Those consequences can be either good or bad. Since selling a home could affect you financially for years to come, we need to make sure all our decisions provide favorable consequences.  A few weeks ago I wrote about the process of buying real estate so today I want to address the process of selling a home.

 Selecting a Realtor

First and foremost select a Realtor® who has a good reputation, is honest, trustworthy, and has integrity. Another important character you should look for is someone who doesn’t tell you what you want to hear, but instead, tells you what you need to hear. After interviewing several Realtors®, select one that you feel you can openly communicate with and hire them to represent your best financial interests. This is generally done by entering into as agency agreement for that agent/broker/agency to represent you. If you don’t thoroughly understand the relationship, ask them to explain it until you do understand. [Read more…]

Caveat Emptor….An Actual Case

Caveat Emptor–Respect and Embrace it

I have spent a great deal of time teaching and lecturing regarding Alabama being a Caveat Emptor state. Buying real estate in Alabama is different from most all other states. It is not a law that should be feared but respected. Caveat Emptor should be embraced because it gives advance notice to buyers what they must do to provide future legal recourse. Not everyone is aware of the law until they learn of its affects; sadly too late to take precautionary measures. Below is a reprinted copy of an email that was directed to me for which I sought and received permission to share with my followers. The names have been omitted as requested by the consumer.

Consumer’s situation stated

 Mr.Anderson:

My name is Could BE Anybody and I write to you from Huntsville. I work at a law firm as a civil litigation paralegal (doing primarily municipal defense work) but this message is personal and has nothing to do with my job. I’m using this account to avoid a spam filter.

My husband and I had a crisis of sorts over the weekend which led me to your articles and I just wanted to say thank you not only for writing them but for writing them to be of dual benefit to realtors and buyers.  The short version is that we were interested in a house in Any City, Al. (Any County), [Read more…]

The Process for Buyers to Work with Real Estate Agents

Real Agents are for Your Protection

There’s a right and wrong way to do almost everything. Buying real estate is not difficult but it can be very costly if you don’t take the right steps. I would like to share this simple process in a way that you can understand it and hopefully realize the importance of each step.

Step one is to hire a Realtor® to represent your best financial interest.

Don’t let the word “hire” scare you. Hiring someone to represent you will seldom cost you anything because the seller pays a commission to the Realtor® to professionally market their property for them. This commission is generally divided between the listing agency and the selling agency unless both sides of the transaction are performed within the same agency. Therefore let’s eliminate the thought of you having to pay to have someone represent you.

Buyer’s need to be cautious [Read more…]

What Consumer’s Need To Know

Questions Need Answering

This information is specific to what consumer’s need to know when buying or selling real estate in Alabama. Even more specifically, what consumers need to know when working with a real estate broker? Especially since Alabama is a Caveat Emptor state which places total responsibility on the buyer to do their due diligence in inspecting every aspect involved with a property prior to closing on a sale.

For years the seller has known who represents him when selling real estate but who represents the buyer? Who looks out for the buyers best financial interests? Some agents think the liability is too great when representing a buyer, largely due to the Caveat Emptor law; therefore they want to assist the buyer as a transaction broker to limit their liability. That being the case, many times, the poor buyer is left to fend for themselves without being told what they need to do prior to closing so they can protect their legal recourse options. The State of Alabama understands the precarious situation the buyer  is in when buying in Alabama so they provide

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What Buyer’s Want and Need to Know

It's Alabama Law

It seems I’ve opened a can of worms already talking about the dangers a buyer of real estate in Alabama faces. You might want to review some of my previous blogs such as “Meaningful Conversations for Alabama Realtors,” or “Establishing Relationships,” or “Just Tell it like it is.”  In all these blogs I explained the importance of disclosing the fact that Alabama is a Caveat Emptor state which places all the responsibility for detecting possible deficiencies in a property prior to closing. All real estate practitioners know the meaning but many don’t seem to understand the impact it has on their clients.

For many years consumers who are buying real estate have asked the question, “Who represents us, and who represents the seller?”  The National Association of Realtors has surveyed thousands of buyers and sellers to determine their satisfaction with representation by a Realtor. By far, buyers are most dissatisfied because it seems everybody represents the seller and no one wants to represent the buyer. Representation can’t be mandated on the National level due to variances in state laws. Since my job is educating people about real estate, primarily in Alabama, and since I live and work in Alabama, this article will be specific to our state.

Alabama law requires….

[Read more…]

Meaningful Conversation for Alabama Realtors

Alabama Realtors--Warn Your Buyers

2012 is license renewal year for Realtors® in Alabama and each agent must complete 15 hours of Continuing Education which is required by the Alabama Real Estate Commission. I have been holding CE classes all across the state and have noticed so many agents experiencing difficulties with the delicate balance between our RECAD requirements and having a meaningful conversation when contacting a prospective buyer for the first time. Since I encourage classroom participation, I have heard some of the most experienced, most successful real estate role play their RECAD process. I am shocked at their omission of the most important information we can share. Omitting this type information could affect the financial wellbeing for someone buying real estate in Alabama. Sharing this type information would definitely qualify as having a meaningful conversation. I’m sure you have already figured out that I am referring to the fact that Alabama is a Caveat Emptor state. For those outside the boundaries of Alabama, I will explain the importance of this statutory law.

[Read more…]

Just Tell It Like It Is

Disclose RECAD & Caveat Emptor in first conversation

The most important fact

an Alabama real estate agent can share with prospective buyers and sellers of real property in Alabama is that Alabama laws are different than most other states. Especially those states adjacent to Alabama because industry standards tend to spread across state lines. Alabama is a “Caveat Emptor” state. This simply means “buyer beware!”  To be more precise, Alabama is a modified Caveat Emptor state; because it exempts “New Homes” from Caveat Emptor. New homes are warranted by the builder while secondary (pre-existing) or used homes are not warranted by anyone. The purpose of “Caveat Emptor” is to notify the buyer that it is his responsibility to have the proper inspections performed on a home before they actually close on the sale. The buyer is not to rely on the seller to disclose all imperfections of a property, when making a decision whether to buy or not to buy.

Due to influence of markets in other states, some brokerage firms require their seller to complete a “Sellers Disclosure” form at the point of listing. [Read more…]