Question:
When giving referral gifts how much is the maximum you can spend and be allowed to claim on your taxes.....by referral gifts I mean gifts you give to people who refer a client to you. How much are we allowed to give to buyer clients who have just bought a house and we can claim on taxes?
Answer:
Per TREC regulations, you are allowed to spend a maximum of $50.00 on gifts to people who refer a client to you. To buyer clients, there is no limit as to how much you are allowed to give back to them. Keep in mind that most, if not all lenders want those amounts to be disclosed during the loan processing time so that they can make a more accurate determination as to whether the buyers are truly financially prepared to handle their mortgage payments.
May 14, 2011
April 24, 2011
Residential Real Property Affidavit (T-47)
Any time that you are reviewing a One-to-Four Family Residential Contract (Resale), one of the paragraphs you should pay particular attention to is paragraph 6C(1). If that paragraph is checked, then the seller of the property shall furnish to buyer within the noted time frame in the paragraph not only the existing survey of the property, but also a completed and notarized Residential Real Property Affidavit, Form T-47. Further, paragraph 6C(1) specifies that if the seller does not complete this requirement, the buyer can then obtain a new survey of the property and the seller HAS to pay for it.
Considering all of this, the best practice we should follow as agents is to obtain the existing survey from the seller AND have the affidavit signed and notarized immediately after the listing agreement is completed, if possible.
Doing this can help you and/or your client avoid an unexpected, and needless to say, costly expense in the transaction.
Considering all of this, the best practice we should follow as agents is to obtain the existing survey from the seller AND have the affidavit signed and notarized immediately after the listing agreement is completed, if possible.
Doing this can help you and/or your client avoid an unexpected, and needless to say, costly expense in the transaction.
September 25, 2010
Your Safety during Open Houses
Open Houses can be a great method to create exposure to a listing and generate leads, but hosting one also exposes you to increased safety concerns. Use this checklist to minimize your risk:
1. If possible, always try to have at least one other person working with you at the open house.
2. Check your cell phone’s strength and signal prior to the open house. Have emergency numbers programmed on speed dial.
3. Upon entering a house for the first time, check all rooms and determine several “escape” routes. Make sure all deadbolt locks are unlocked to facilitate a faster escape.
4. Make sure that if you were to escape by the back door, you could escape from the backyard. Frequently, high fences surround yards that contain swimming pools or hot tubs.
5. Have all open house visitors sign in. Ask for full name, address, phone number and e-mail.
6. When showing the house, always walk behind the prospect. Direct them; don’t lead them. Say, for example, “The kitchen is on your left,” and gesture for them to go ahead of you.
7. Avoid attics, basements, and getting trapped in small rooms.
8. Notify someone in your office, your answering service, a friend or a relative that you will be calling in every hour on the hour. And if you don’t call, they are to call you.
9. Inform a neighbor that you will be showing the house and ask if he or she would keep an eye and ear open for anything out of the ordinary.
10. Don’t assume that everyone has left the premises at the end of an open house. Check all of the rooms and the backyard prior to locking the doors. Be prepared to defend yourself, if necessary.
Sources: Washington Real Estate Safety Council; City of Mesa, Arizona; Nevada County Board of REALTORS®; Georgia Real Estate Commission) This article is part of the NATIONAL ASSOCIATION OF REALTORS®’ REALTOR® Safety Resources Kit.
1. If possible, always try to have at least one other person working with you at the open house.
2. Check your cell phone’s strength and signal prior to the open house. Have emergency numbers programmed on speed dial.
3. Upon entering a house for the first time, check all rooms and determine several “escape” routes. Make sure all deadbolt locks are unlocked to facilitate a faster escape.
4. Make sure that if you were to escape by the back door, you could escape from the backyard. Frequently, high fences surround yards that contain swimming pools or hot tubs.
5. Have all open house visitors sign in. Ask for full name, address, phone number and e-mail.
6. When showing the house, always walk behind the prospect. Direct them; don’t lead them. Say, for example, “The kitchen is on your left,” and gesture for them to go ahead of you.
7. Avoid attics, basements, and getting trapped in small rooms.
8. Notify someone in your office, your answering service, a friend or a relative that you will be calling in every hour on the hour. And if you don’t call, they are to call you.
9. Inform a neighbor that you will be showing the house and ask if he or she would keep an eye and ear open for anything out of the ordinary.
10. Don’t assume that everyone has left the premises at the end of an open house. Check all of the rooms and the backyard prior to locking the doors. Be prepared to defend yourself, if necessary.
Sources: Washington Real Estate Safety Council; City of Mesa, Arizona; Nevada County Board of REALTORS®; Georgia Real Estate Commission) This article is part of the NATIONAL ASSOCIATION OF REALTORS®’ REALTOR® Safety Resources Kit.
May 17, 2010
Seller's Financing in Texas - Audio Update
Here is an interesting audio update from the Texas Association of REALTORS® regarding a recent change in the law affecting Seller Financing of One-to-Four Residential Properties and a requirement to have a Residential Mortgage Loan Originator License (RMLO).
In my opinion this is good information to know, I recommend you listen to it when you have a few minutes.
http://www.texasrealtors.com/go/podcasts/TRU_Episode74.mp3
April 22, 2010
Release of Earnest Money
Below is a short yet insightful portion from the latest Texas Association of Realtors (TAR) newsletter. It covers a frequently asked question regarding the release of earnest money in a transaction.
Question: My client is a buyer who has given the seller a timely, written notice that he is terminating his contract to purchase the seller's home under the termination option of the contract (Paragraph 23). The seller is upset and will not sign the appropriate form releasing the earnest money to the buyer. What can the buyer do to get his earnest money
Answer: The buyer could make a written demand under the provisions of Paragraph 18 of the TREC contract. That paragraph provides that the escrow agent will be released from liability by each party to the contract if the escrow agent disburses the earnest money upon the written demand of one party where the other party does not object to that disbursement in writing within 15 days after notice to the other party is given by the escrow agent.
While this provision covers only those situations where the other party does not object in writing to the disbursement or has not made a written demand for the earnest money, following this procedure might result in the escrow agent releasing the earnest money to the buyer. If the seller were to make a written objection to the disbursement or make a written demand for the earnest money, the buyer would have written evidence to substantiate the seller's wrongful refusal to release the earnest money. This might make it easy for the buyer to recover the liquidated damages stated in Paragraph 18: three times the amount of the earnest money, the earnest money, reasonable attorney fee’s and all costs of suit.
Although the amount of earnest money involved in any given transaction may not be very substantial, the losing party in any suit litigating this issue under the provisions of Paragraph 18 could end up losing far more than just the amount of the earnest money held by the escrow agent.
For other legal topics, visit the Legal FAQs on www.TexasRealtors.Com.
Question: My client is a buyer who has given the seller a timely, written notice that he is terminating his contract to purchase the seller's home under the termination option of the contract (Paragraph 23). The seller is upset and will not sign the appropriate form releasing the earnest money to the buyer. What can the buyer do to get his earnest money
Answer: The buyer could make a written demand under the provisions of Paragraph 18 of the TREC contract. That paragraph provides that the escrow agent will be released from liability by each party to the contract if the escrow agent disburses the earnest money upon the written demand of one party where the other party does not object to that disbursement in writing within 15 days after notice to the other party is given by the escrow agent.
While this provision covers only those situations where the other party does not object in writing to the disbursement or has not made a written demand for the earnest money, following this procedure might result in the escrow agent releasing the earnest money to the buyer. If the seller were to make a written objection to the disbursement or make a written demand for the earnest money, the buyer would have written evidence to substantiate the seller's wrongful refusal to release the earnest money. This might make it easy for the buyer to recover the liquidated damages stated in Paragraph 18: three times the amount of the earnest money, the earnest money, reasonable attorney fee’s and all costs of suit.
Although the amount of earnest money involved in any given transaction may not be very substantial, the losing party in any suit litigating this issue under the provisions of Paragraph 18 could end up losing far more than just the amount of the earnest money held by the escrow agent.
For other legal topics, visit the Legal FAQs on www.TexasRealtors.Com.
February 18, 2010
Be mindful of your emotions
While it is important that we remain energetic and confident as we work with clients, it is also extremely important that we remain conscious of our emotions before, during, and after each transaction.
To illustrate, I would like to share with you an article I recently read on this topic. The article was written by Katherine Tarbox, Senior Editor of REALTOR® magazine. It is brief and to the point, taking all of about three minutes of your time, yet it identifies five areas you can focus on to keep your emotions balanced: Appreciation, Autonomy, Affiliation, Status, and Roles.
Again, a short, useful article. It is the copyright of the National Association of Realtors (NAR) and it is being posted here with their permission.
Representing clients in real estate transactions may not be quite as emotionally charged as handling hostage negotiations or helping warring nations diffuse long-standing conflicts, but there are parallels. During his Entrepreneurial Excellence remarks at the 2009 NAR Conference & Expo, Daniel Shapiro, director of the Harvard International Negotiation Program, identified important ways that misunderstood emotions can hinder real estate negotiations.
"Clients often move because of major landmarks in life—divorce, marriage, birth, death. Even when those life events aren't involved, there may be financial stress or fear of committing to a property," Shapiro says. "It's best to be removed from those client emotions."
Shapiro says practitioners should focus on five core emotional concerns in client dealings:
Appreciation: Do you let your clients be heard? Do you really listen to their concerns and what they are looking for in a property? If you don’t appreciate your customers and they don’t appreciate you, then you’re creating bad business. Autonomy: Allow your client to make the important decisions. He believes lines such as “Buy this house now” will push clients away. They need to be in the driver’s seat in terms of the purchase or sale while practitioners provide expert advice.
Affiliation: When meeting with a new client or co-worker, try to create common ground with them with at least three shared connections. Did you go to the same school? Root for the same sports team? Enjoy a common restaurant?
Status: Don’t act like you’re always “on top.” Take turns with your client in terms of who’s leading the relationship. When showing homes, you can lead by being the driver. When getting close to making the sale, let the client lead. Don’t get competitive about maintaining the higher role.
Roles: Practitioners need to play different roles through the process: housing expert, emotional consultant, devil’s advocate, and more. Make sure you recognize your changing role in order to fulfill your clients’ variety of needs.
For Eddie Perez, GRI, an associate broker with Robert De Ruggiero Inc. in Hoboken, N.J., the main takeaway for the session was the importance of appreciation. “I’m in a negotiation right now where the other practitioner is not responding to my counteroffer for a sale. I believe if I told her that I understand her seller’s position, I would have a response. I’ll take a step back now when I negotiate.”
—Katherine Tarbox, REALTOR® magazine
To illustrate, I would like to share with you an article I recently read on this topic. The article was written by Katherine Tarbox, Senior Editor of REALTOR® magazine. It is brief and to the point, taking all of about three minutes of your time, yet it identifies five areas you can focus on to keep your emotions balanced: Appreciation, Autonomy, Affiliation, Status, and Roles.
Again, a short, useful article. It is the copyright of the National Association of Realtors (NAR) and it is being posted here with their permission.
Don't Let Emotions Ruin Negotiations
Representing clients in real estate transactions may not be quite as emotionally charged as handling hostage negotiations or helping warring nations diffuse long-standing conflicts, but there are parallels. During his Entrepreneurial Excellence remarks at the 2009 NAR Conference & Expo, Daniel Shapiro, director of the Harvard International Negotiation Program, identified important ways that misunderstood emotions can hinder real estate negotiations.
"Clients often move because of major landmarks in life—divorce, marriage, birth, death. Even when those life events aren't involved, there may be financial stress or fear of committing to a property," Shapiro says. "It's best to be removed from those client emotions."
Shapiro says practitioners should focus on five core emotional concerns in client dealings:
Appreciation: Do you let your clients be heard? Do you really listen to their concerns and what they are looking for in a property? If you don’t appreciate your customers and they don’t appreciate you, then you’re creating bad business. Autonomy: Allow your client to make the important decisions. He believes lines such as “Buy this house now” will push clients away. They need to be in the driver’s seat in terms of the purchase or sale while practitioners provide expert advice.
Affiliation: When meeting with a new client or co-worker, try to create common ground with them with at least three shared connections. Did you go to the same school? Root for the same sports team? Enjoy a common restaurant?
Status: Don’t act like you’re always “on top.” Take turns with your client in terms of who’s leading the relationship. When showing homes, you can lead by being the driver. When getting close to making the sale, let the client lead. Don’t get competitive about maintaining the higher role.
Roles: Practitioners need to play different roles through the process: housing expert, emotional consultant, devil’s advocate, and more. Make sure you recognize your changing role in order to fulfill your clients’ variety of needs.
For Eddie Perez, GRI, an associate broker with Robert De Ruggiero Inc. in Hoboken, N.J., the main takeaway for the session was the importance of appreciation. “I’m in a negotiation right now where the other practitioner is not responding to my counteroffer for a sale. I believe if I told her that I understand her seller’s position, I would have a response. I’ll take a step back now when I negotiate.”
—Katherine Tarbox, REALTOR® magazine
November 11, 2009
Gather Up Your Posse
Perhaps one of the most important things a brand new agent can do as soon as he/she is licensed is to start putting together a group of trusted people in a number of fields directly related and critical to success in the real estate arena. There is no need to wait until there is a new buyer or seller under contract, as a matter of fact, it's best to work ahead and have the right network ready for when the day comes.
Lenders, title companies, property inspectors, insurance agents, locksmiths, etc....are all entities that in the great majority of cases will be involved in a real estate transaction. Some more than others, but they will all will have a direct impact in how smooth or how rough a transaction will be. And although the task of building your network is not necessarily a complicated one, it is not something that can be accomplished overnight or that should be overlooked as a lower priority. I am fully aware that there are people out there that completely disagree with my opinion on this subject, but stop for a moment and give it just a few seconds of consideration. Are you REALLY ready to get your first listing if you have NO IDEA what title company you will use once you have an executed contract? Are you REALLY sure that you want to use ABC Title simply because Sally said that "she used them a couple of times in the past and had no problems"????
The truth is that anyone, your broker, other agents, Google, etc. can give you a list of vendors for whatever specialty you are looking for. Most brokerages have so-called "in-house" or "preferred" vendors, and that is perfectly fine. But I strongly encourage you to do your homework and exercise due diligence as you are building your trusted network. Think of conversation starters-----open-ended, probing questions that you can ask anyone recommending a vendor:
Once you have done this with enough people and have begun building your list, you should meet with each person you are considering (and by the way, they would love nothing more) at least once for a few minutes. Super Sally may get along great with Sensible Susan but you may feel that she is extremely rude and condescending. You don't want to find that out AFTER you have sent her your executed contract and have opened title, do you?
And just because you have several years of experience under your belt and have a long-established network of great professionals you can depend on, you shouldn't forget about continuing to keep that list fresh and validated. People in every field change careers, work habits, and areas of coverage every day. Your top inspector might have moved to El Paso and your most reliable closer might have retired two months ago. Your trusty loan officer, once hard-working and dependable, might have lost her touch and not done so well over the last couple of deals you sent her. Do you have replacements ready if you land a new contract tomorrow? You don't? Well then, it must be time for you to-----Gather Up Your Posee!
Lenders, title companies, property inspectors, insurance agents, locksmiths, etc....are all entities that in the great majority of cases will be involved in a real estate transaction. Some more than others, but they will all will have a direct impact in how smooth or how rough a transaction will be. And although the task of building your network is not necessarily a complicated one, it is not something that can be accomplished overnight or that should be overlooked as a lower priority. I am fully aware that there are people out there that completely disagree with my opinion on this subject, but stop for a moment and give it just a few seconds of consideration. Are you REALLY ready to get your first listing if you have NO IDEA what title company you will use once you have an executed contract? Are you REALLY sure that you want to use ABC Title simply because Sally said that "she used them a couple of times in the past and had no problems"????
The truth is that anyone, your broker, other agents, Google, etc. can give you a list of vendors for whatever specialty you are looking for. Most brokerages have so-called "in-house" or "preferred" vendors, and that is perfectly fine. But I strongly encourage you to do your homework and exercise due diligence as you are building your trusted network. Think of conversation starters-----open-ended, probing questions that you can ask anyone recommending a vendor:
- What in particular about this company do you feel is better than in the others?
- When was the last time you used them on a transaction and how many times have you worked with them over the last 6-12 months?
- If there is anything that you wish that this vendor would improve on, what would that be?
Once you have done this with enough people and have begun building your list, you should meet with each person you are considering (and by the way, they would love nothing more) at least once for a few minutes. Super Sally may get along great with Sensible Susan but you may feel that she is extremely rude and condescending. You don't want to find that out AFTER you have sent her your executed contract and have opened title, do you?
And just because you have several years of experience under your belt and have a long-established network of great professionals you can depend on, you shouldn't forget about continuing to keep that list fresh and validated. People in every field change careers, work habits, and areas of coverage every day. Your top inspector might have moved to El Paso and your most reliable closer might have retired two months ago. Your trusty loan officer, once hard-working and dependable, might have lost her touch and not done so well over the last couple of deals you sent her. Do you have replacements ready if you land a new contract tomorrow? You don't? Well then, it must be time for you to-----Gather Up Your Posee!
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