There has been some interesting news out recently regarding the use of Chinese drywall in new homes built between 2002 and 2009.  Apparently, the bulk of these homes were constructed in Florida during 2004-2005.  However, if you own a home built between 2002 and 2009, you might want to be aware of a few things.

First...you might want to know how you find out if you have a house with Chinese drywall.  You might make a call to your builder to ask about the source of the building materials.  You can also find an unfinished area of your home and see if you can see the back of some of the drywall. If it says "made in China", you have Chinese drywall.

Follow this link to find out more about the the problems with Chinese drywall. http://www.cpsc.gov/info/drywall/how.html

From what I have read, the most serious issue could be breathing problems caused by exposure to this drywall.  It can also cause some corrosion in your copper piping.  Apparently, this drywall may be constructed with materials not approved for use in the U.S.

According to the U.S. Consumer Product Safety Commission:

"CPSC has received about 1,501 reports from residents in 27 states, the District of Columbia, and Puerto Rico who believe their health symptoms or the corrosion of certain metal components in their homes are related to the presence of drywall produced in China. State and local authorities have also received similar reports."

Unfortunately, some insurers have stopped covering houses that have Chinese drywall or refused to cover claims, leaving the homeowner no choice but to file a claim against the builder. One argument might be that individual communities are separate LLCs or corporate structures than the larger builder companies, the question may be as to whether purchasing is centralized and that purchasing for large quantities of Chinese drywall were done at the behest of a corporate office.  This would seemingly expose the entire corporate entity (parent, subsidiarys, and separate affiliated companies) to legal ramifications and lawsuits.  One can also imagine that if a national builder used the materials, there will be people analyzing purchasing and shipping records to see where materials were sent and what communities are affected.

Stay tuned. I am sure there will more out soon on Chinese drywall.

Last week I wrote about how the state of Virginia allows convicted felons to hold real estate licenses.  I have done more investigation this week and discovered that the Virginia legislature was actually going to pass a law that banned convicted felons from holding real estate licenses a couple of years ago but that for some reason it just didn't get done! Why?  I mean just WHO are they protecting? The felons???

Then I got to thinking about this even more.  Why isn't there some sort of NATIONAL standard?  This should be something NAR could really stand behind.  I mean really, what does the Realtor logo stand for if convicted felons are allowed to get real estate licenses?  I found out that Virginia was not the only state with this laspe in judgement.  Let's face it, you can't even VOTE if you are a convicted felon...but you can have access to people's homes and engage in contract writing?

Since we are coming off the heels of and dealing with the massive mortgage and housing fall out the last market has left us with, wouldn't this be an opportune time to actually DO something to prevent as much fraud as possible in the future?  We really have some serious house cleaning to do in order to regain the trust of the public.

Do you know if your state does criminal checks on every real estate agent?  Does your state allow convicted felons to have real estate licenses?  Please let me know. I would love to post another blog with that information. Stay tuned...

As the Principal Broker/Owner of two real estate offices, it pretty hard to surprise me anymore. However, what transpired recently is enough to make my blood run cold. The State of Virginia allows CONVICTED FELONS who have served jail time to get REAL ESTATE LICENSES!!! Yes, you read that correctly. Did you KNOW that? I didn't.

 

In fact,I had always believed as have many of my other colleagues,that criminal background checks were done on new licensees by the Department of Regulation in the State of Virginia. This is not true.

DPOR merely "asks" potential licensees this question when they apply for their real estate license. If they don't answer this question, no checks are ever done. If the question is answered positively, the potential licensee must go before the board for a hearing. I have sat in on one of those hearings and they are rather short and sweet. Even then, NO background checks are done.

I was told by one investigator " there are 300,000 agents and DPOR doesn't have the time to do criminal background checks". Really? Hmmm. First of all I don't think there are 300,000 licensed real estate agents in the State of Virginia. And secondly, why can't Virginia do background checks?

The State of Kentucky requires potential licensees to submit to a criminal background check BEFORE they even take the licensing exam. Kentucky will not allow ANYONE to become a real estate agent if they have ANY felony conviction at any time (EVER!). You can't even become a real estate agent in Kentucky within five years of a misdemeanor conviction or with evidence of dishonesty, untruthfulness, or bad reputation. The FBI cost for this investigation is just $18 paid for by the potential licensees and it takes 10-12 weeks. In other words, Virginia wouldn't even have to DO the background check, they can hire the FBI to do the background check and make it a requirement that the potential licensees pay for it!!!

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I bring all of this up in the first place because I found out I had an agent in my office who had a felony conviction with jail time served for credit card fraud as well as a misdemeanor conviction for fraud. He had also lost his license to sell cars in Virginia for fraudulent behavior. But hey...let's just look the other way and give him a REAL ESTATE license and access to all the HOUSES on the market in the State of VIRGINIA!!! This agent continued to create all kinds of fraud for buyers and sellers in MY office!

OK..you ask..why don't YOU run criminal checks on your agents? Good question. First of all, I have been licensed in real estate since 1979.  I have been in small companies and large companies. At NO time have I ever been aware of criminal checks being done on real estate agents.  Quite frankly, everyone assumed the STATE was doing these background checks as a matter of course BEFORE they would even ISSUE a real estate license. Now I know better. It's going to make me change my policies.

But, let's be honest here, the State of Virginia has a GOLDEN opportunity to follow the footsteps of Kentucky by first not even allowing convicted felons to sell real estate. I know that's a hard line, but we are here to "promote, perserve and protect the rights of the public."  What better way to do that than to have some hard basic guidelines.  If you asked your clients how they would feel knowing convicted felons had access to their property do you think they would want you to put a lockbox on their property???

Secondly, Virginia is in the top ten states with a high incidence of real estate fraud. Don't you think putting some teeth into the licensing laws might help clean out some of the riff raff?

People worry all the time about whether or not their house is safe while it is on the market. I reassure them over and over that I have a secure lockbox that can only be opened by real estate agents. I never ever knew that some of those real estate agents are the very ones my sellers should be afraid of letting into their house! Would you knowingly let a stranger, agent or otherwise, who has been convicted of a felony and served jail time, have the keys to your house? I don't think so. So why on earth would the State of Virginia think it is perfectly fine to allow convicted felons who have served jail time to have unlimited access to all the homes on the market in Virginia WITHOUT the knowledge of the sellers or buyers??? What are they thinking???

What is even more frightening, is after I dismissed this agent from my office and filed some very serious complaints (I also found out he was being investigated by DPOR for other complaints BEFORE he came to my office), this agent has just joined ANOTHER office in Northern Virginia and is being ALLOWED to practice real estate while he is being investigated. There is absolutely NO provision in the code or law that allows DPOR to suspend an agent's license while an investigation is going on...no matter how serious the charges are. Makes you feel even safer doesn't it???  Give me a break.  I am not talking about suspending someone's license on small complaints, I am talking about multiple incidences through more than ONE broker with a trail of victims.  It would appear there is a pattern here, don't you think?

If you look up the name of this agent on the DPOR website there are absolutely NO open or closed complaints showing because none of these complaints has made it through the painfully slow investigation process to adjudication. How can ANYONE, Broker, seller or buyer protect themselves?  I check out ALL my agents on the DPOR website.  But really...what good is it?  I now know that if an agent actually has public complaints that show up on this website...well..they MUST be an ax murderer!

So...coming to a home near you...maybe even yours... is a  licensed Virginia real estate agent who is a convicted felon and has served jail time for fraud or drug use or...and DPOR won't or can't do a thing.

I posted the following comment on The Washington Post's website in response to an article from November 5th's article, "Realtor Discourages Use of Outside Lenders".  You can read the full article here: http://www.washingtonpost.com/wp-dyn/content/article/2007/11/04/AR2007110401274.html

As a former Long & Foster top-producing and award-winning agent, I take issue with "affiliated business arrangements".  Agents are not merely "asked" to use these businesses.  There are Prosperity loan officers in many offices to strongly "encourage" agents to refer business to them.  There are quarterly awards given out to agents who refer the most business.  Office memos and e-mails constantly "remind" the agent about using affiliated businesses.  This is definitely "quiet intimidation".

However, it is not just a Long & Foster way of doing business, in fact, you'll find it in most major real estate companies like Weichert, Coldwell Banker, ReMax, etc....

OK, so what's the big deal you ask? Buying or selling a house is for most people a very stressful event.  It is usually the largest investment that someone will ever make.  Often buyers and sellers are not as savvy as their agent.  Should the referral of a mortgage company, insurance company, or title company be based on making the real estate company more money?  Ask yourself, how long will a buyer be affected by the rate and terms of the loan they take out on their new home?  Don't you think that a TRUE buyer's agent who is representing their client properly should be able to refer more than just one mortgage company so their client can get a true picture of the best loan for their purchase?  There are real money issues here.  The loan you get can cost you more in settlement fees, interest rates and adjustments, prepayment penalties, etc...  Why shouldn't you be allowed to comparison shop?  Shopping is a VERY strong negotiation tool when it comes to getting the best rate and terms.

C'mon, there's a reason HUD/RESPA has rules!  Those rules are there to protect the consumer.  So...how does skirting the law provide that protection?

Yeah yeah, I understand competition.  I was a mega producer, remember?  But being competitive doesn't mean you have to sell out your client.  The very best thing you can always do is to stay true to the letter of the law and offer your client a myriad of choices...tried and true choices, so your buyer or seller can pick the program that is best for THEM.  What a concept! (I am fairly certain that this is what HUD had in mind when they created their laws.)

Yes, I am a real estate broker and the owner of two offices.  I do not have affiliated arrangements with any businesses.  I encourage my agents to try different lenders and let us know how they work out.  We have a list of lenders, insurance companies, etc. that come highly recommended by our own agents.  One bad experience can get a company removed from that list.

Why should Long & Foster or any other company make money from referring business?  Remember, kickbacks are illegal in real estate.  Isn't an affiliated business arrangement set up to line a broker's pockets with just another form of a kickback?  What troubles me most is wondering why more people aren't raising a huge fuss about this!

Hello....is anybody out there?  How do you think we got into all this sub-prime mess with foreclosures and short sales?

Consumers should run from most affiliated business arrangements.  Get quotes from more than one place.  Make your loan officer explain these charges to you.  Double check them with your agent.  If your agent doesn't understand them, get another agent.  Ask as many questions as you need to until you fully understand what is happening and feel completely satisfied.  You deserve the best representation available.  Insist on it.  Don't just show up at settlement hoping you can trust what is going on.  Make sure you know.

At first I didn't think anything of it...but all of a sudden I notice a dramatic increase in phone calls from buyers to our office asking to have the listing agent ONLY show them a listing. It became more and more frequent. The buyers were stating one more things "We do not have an agent and we will not sign buyer agency." OK...but why?

The buyers tell me they are calling all the listing agents to see several different properties. Hmmmmm.....this just doesn't make sense. Until...I realized a particular online company was actually telling buyers to do that...and then call them when they want to write a contract so the buyer can get 2% commission rebated back to them.  Interesting.

 Why the heck wouldn't a buyer want a great agent, who was THEIR buyer agent, showing up, showing comparables and then taking them out? Good buyer agents can even show you neighborhoods you don't even know about. I mean, honestly...how do you even KNOW you are seeing what there is to see?  Rarely do my buyers who started online even buy the house they called about.  Usually, it a concentrated effort that takes much dedication and energy to find that perfect house.  It's just not that easy, folks.

Why do buyers all of a sudden think buyer agency is a bad word. HELLO...the buyer agent is representing YOU. This is a GOOD THING. We worked really hard in the 90's to make buyers agency happen FOR you!  Prior to that time ALL agents were representing the SELLER and the buyers didn't understand that. Why would you GIVE that away?  Does that make ANY sense?

Listen, I have absolutely NO problem with commission rebates. What I do have a problem with is misrepresentation.  Why should listing agents drop everything they are doing (remember they are NOT sitting around twiddling their thumbs).  If one of these buyers wants to come through an open house, no problem. If their agent happens to be out of town and calls us to ask us as a favor to show a property to their client...we are more than happy to accomodate.

The issue I have here, and I think it may actually violate ethics, is to coach buyers to be dishonest. These buyers are NOT telling us they are working with another company as they are instructed to do from the sites I have visited.  A 2% rebate? Actually it's not a big deal. Most of our buyers who are experiencing buyers representation are getting 3% or more back in sellers subsidies.  If you get a 2% rebate and it fails to show up on the settlement sheet or your agent is violating HUD/RESPA laws.  All rebates and subsidies MUST show up on the settlement sheet. Why???

Lenders have a right to know just how much a buyer is actually putting down on a house. They have lending guidelines that must be complied with. Any money going back to a consumer not noted on the settlement sheet is considered a kickback...and kickbacks are illegal.

Let's skip the rebate issue for a minute. If I was a buyer, there is NO way I would want to not have buyers representation. The listing agent is representing the seller. Anything I say to the listing agent can and will most likely end up going back to the seller. How is that good for me?  Can I get a better deal by working with the listing agent?  I shouldn't be able to. After all, the listing agent is representing the seller and should be trying to get the very best possible deal for their seller. So who's taking care of me, the buyer if I don't have any representation?

You see, sometimes these "Rebate Companies" want to make you THINK no one else will take care of you, that you are getting a deal from them. Really? Hmmmm...I don't know any TOP agents working for such companies. Good agents know they deserve to be compensated. A top negotiator who is going to go to work for you, is going to get MORE than 2% back for you in this market. Good agents are well educated, experienced and know how to troubleshoot any and all of the issues that come up in a real estate transaction. That kind of knowledge does not come cheap. But YOU, the buyer, don't pay it anyway. The seller pays the commission AND pays the subsidy, usually at least 3%, for YOU.  OK..you could argue that some buyer agency contracts say the buyer will make up any commission descrepancies. So? Have your agent strike that part and initial it. State that the agent will only be compensated by the seller. This isn't hard to do people.

Think about it, would you go to a doctor that told you to go to other doctors and ask questions, then come back to them when you knew what you had?  The old saying "Pennywise and pound foolish" more than applies here. make sure you have a good buyer agent who is working FOR YOU. You deserve to have the very best representation possible. Any agent who hides under a rebate as an excuse NOT to properly represent you isn't going to take care of you.  I mean really..what's in it for them?

This has been a challenging this week. Thursday night I was involved in a four car collision. I was in car number two. The worst thing that happened... we had some injuries and several damaged cars.  The best thing that happened...everyone was kind and gentle to one another and made what could have been a horrible situation as pleasant as possible.  We all worked together to see who was most injured.  We were all in a dazed state...and yet...all of us seemed to be working to our strengths.  Good Samaritans stopped to make sure we were OK and called for help since we were still thunderstruck.

I was wearing my real estate badge and my car was loaded with real estate signs and inflated balloons from an afternoon open house.  When we opened my trunk to pass out water bottles all these teal balloons came flying out making everyone laugh.  I was able to get all our shared information and get everyone to trust me after the officer left by handing out my card and promising to email all the information to everyone on my way home.  I was able to use our scan to email feature to help take care of everyone.

My head and neck are still achy, my car is quite a mess, I have to deal with collision centers, insurance and rental cars... but we all survived and that still makes me feel better.

Two days later one of our clients died suddenly from an asthma attack. He and his wife had planned to buy one of our listings and sell their home with us. Suddenly, I had two agents in my office in shock looking for the right way to help. We spent the week end unraveling all the intricacies of two contracts while making sure the family was taken care of.  My agent sat outside their house all day Sunday to ward off buyers coming to her open house. It was too late to pull the ads. She brought flowers and comforted the family.

Real Estate...it's about life.  We deal with something no one can live without...shelter.  People love their houses, they live in their houses, they make them homes and have holidays, babies, laughter and tears in those houses.  When it comes to people, to relationships...it doesn't matter what market we are in.  The interest rate doesn't matter.  The size of someone's bankbook doesn't matter.  The realtionship matters. Bottomline. I love it and I couldn't ever do anything else.

So..you are finally ready to sell your house. But is your house ready for the show? Today's market is much more competitive for the seller than in the last five years. There is much more inventory on the market...so you have competition. How do you come out on top? Do you really have to take down the wallpaper, put in new flooring, de-clutter and do some updating?

It all depends. How quickly do you want to sell your house? Do you really want to sell your house at all? Call your agent and have your agent come in and really talk to you about what you might have to do to compete in today's market. A pro knows.

Then listen. Ask your agent what things generally come up in a home inspection. What can you do to make sure you trouble-shoot your house in advance? What will enhance your curb appeal?

Start getting your utility bills together so buyers will know the monthly averages. Have the HVAC checked out. Tape the statement to your furnace so the buyers will be able to see it has been recently serviced. Figure out how old the roof is, the water heater and the windows. Agents need to know as much as possible about your house to put it in its best light.

Then dig out your title insurance. If you purchased your house less than 10 years ago, the buyer may benefit by being able to get reduced rates in title insurance. Have an extra key or two made for your agent. Get copies of your plat. Put together a list of recent improvements and area amenities.

Your agent should have a list of repairmen, painters, flooring companies and cleaning services to help you out. Get windows clean, replace burnt out lightbulbs, clear out the basement, closets and garage. Have a household sale or donate items to de-clutter your home.

Good luck!

Almost everyone dreams of a new home at one time or another. Some people make a regular habit of touring model homes in new home communities. Builders always have a very helpful sales staff. They prefer it if you don't bring your agent. Why is that?

Did you know that when you purchase a new home, the builder generally doesn't use the regional sales contract forms real estate agents use?  They don't tell you that if you don't have an agent, you don't have anyone representing YOU. You see, the builder is representing himself. He or she has had their attorneys draw up their contracts that are favoring the builder and their interests. You are an UNREPRESENTED buyer.

A lot of times, buyers think they will get a reduced new home price if they don't have their buyers agent with them. Not so. Generally the builder doesn't have to pay our commission, that's all. I have sat in on builder/buyer contract session and have heard the sales representative promise to do things that are in direct conflict with what I am reading in the builders contract.  Wouldn't it be great if you had someone looking out for your interests that could inform the sales representative those things were missing and so "I'll just write them in here so everyone can initial them"?

Builders are not bad people. But they know the game. You walk into a drop dead gorgeous model and you want a home just like that,too. Your heart is racing, it's everything you ever wanted..so just sign here..or..wait! Please call your agent and have them get there...STAT!

Your agent is going to make sure that contract has some things in it for you. Your agent will be there with you at the design center trip to keep you level and help you get through all the walk-throughs on your new house. We see new homes all the time. We KNOW what can go wrong.

I have been in the real estate industry in some way or another my entire adult life. I have weathered many ups and downs. In fact, my career started during the time Jimmy Carter was President. We had run-away interest rate of 18% or more. It made our heads spin! Rates would go up a full percentage point within 24 hours and the buyers you had qualified to purchase couldn't buy a house.

No matter what the market is...up, down, slow, crazy..the very coolest thing about it is helping people achieve their dream of home ownership. Even now, I still get a thrill sitting at a settlement table watching my first time buyers purchase their first home. It is always a very exciting time! I've been around so long that some of my buyers are the children of my earliest clients.

I enjoy negotiating a contract for my new home buyers.  I lay awake many nights trying to figure out the best way to present their contract. Wondering how I can get as many of the things my buyers would like in their home.I love showing them the home that they begin their new life in, maybe start their family in, make their first home. It's challenging, takes patience and lots of education.

It truly is the greatest pleasure I have.

The word agency is heard all through-out a real estate transaction. Who is representing whom is key. Is your agent truly representing you? Are they representing the seller? What happens if you purchase a house through the listing agent? Who are THEY representing? Can they REALLY represent both the seller and the buyer?

In Virginia you have listing agents who have agency with their sellers. You have buyers agents who have agency with their buyers. You have listing agents who can write a contract for sale on their listing and still represent the seller and have NO buyer agency. And you can have listing agents who write a sales contract on their listing who perform dual agency-they represent BOTH the buyer and the seller.

There is also designated agency in Virginia. A buyers agent can write a sales contract on a listing that is held in their office and listed by another agent under their broker. One agent represents the seller, one agent represents the buyer.

You should have all forms of agency fully explained to you. You will have to decide if you feel comfortable with dual agency. Personally, I prefer to represent my clients as either a buyers agent or a sellers agent, but not both. I want to feel free to fully represent my client and negotiate in their best interests. If I am representing both...how do I do that? Do I increase my liability? Do I get the best deal for my client?

Just some questions.