Ask George & Chuck: Questions from Consumers April 24, 2007 by George Stephens & Chuck Jacobus
Question (CA): We listed our home of 20+ years for sale. We have not been involved in real estate transactions until recently. We are at odds with our Realtor in that everything we read says to sell you must "price your home right" in today's market. We feel our home should be priced about 40,000 less than what our Realtor is recommending. The Realtor provided us with a listing of homes for sale that were within +/- 25,000 of our asking price. Is that what you call a "CMA?" I was just wondering if this was typical or not, as the majority of articles I've read indicate the Realtor usually has a difficult time getting the seller to reduce the asking price, but it seems the opposite here. Answer: To begin with, the listing Realtor must obey all lawful instructions you deliver to him or her. So you, not the Realtor, determine the asking price. Secondly, a CMA is a guide as to the market value, under current market conditions, of your home. It should display comparable properties to yours that are on the market (meaning as close to a duplicate as possible in all respects including lot size, bedrooms, baths, and other physical attributes), adjusted for any variations. Once the Realtor performs an actual CMA, it should be clear to both you and the Realtor what the asking price should be. The Realtor can usually determine based upon what comparable properties have actually sold for in objective, third party transactions (i.e. unrelated sellers and buyers, no unusual terms, etc.) as a percentage of asking price. If the actual sales price averages to be 95 percent of Asking Price, then the Realtor should suggest you ask the Value indicated by the CMA divided by 0.95. For example, if the CMA indicates a Value of $250,000, then your asking price should be $263,158.00. Question (GA): Real Estate agents as independent contractors do their work according to the agent's methods and are responsible to their brokerage firms only for the results obtained within the guidelines of the agent/firm contract and the firm's policies. In accordance with RE commissions (Georgia, at least), the license law provides the firm the ability to "approve" all advertising. I completely understand complying with all the firm name, logos, contact #'s, sizes of #'s, non-misleading or inaccurate info, etc., but don't agents, as independent contractors, have the right to select what advertisers they want to advertise with and to negotiate their own terms? Let me give you the details of my situation. I've been a direct subscriber of Realtor.com for the entire time I've been an agent. Several years ago my firm contracted with Realtor.com to provide a Realtor.com subscription to all agents at no cost to the agent -- with strings of course -- referral fees depending on the response times. I opted not to participate and continued to pay independently. That was a great choice on my part since it turned out to not be the same level of features. The firm-sponsored program improved over time but is still not acceptable to me and the way I utilize Realtor.com. My subscription with Realtor.com is with an annual renewal. This year, I've been told under no circumstances am I permitted to be waived and continue as I have been directly with Realtor.com. I have refused to comply, yet my firm and Realtor.com tell me I have no choice. It's mandatory. This appears to be a violation of my rights as an independent contractor rather than a policy to make sure I'm in compliance with all advertising guidelines. Am I out of line? I currently don't accept referrals or relocation because the company's policies for this type of business aren't consistent with my goals. This is my choice. I feel it's admirable that my firm offers such benefits to those who want them. But how can they force the method on me just because it happens to be within the realm of "approving advertising"? I'm afraid to waste time and legal dollars trying to fight a non-winning battle. Help! Answer: The easiest way to understand this is that Georgia State Law -- as in most other states, requires that you work through a sponsoring broker. The sponsoring broker is responsible for your misconduct, if any, and therefore is entitled to set the rules under which you operate. Another way to look at this is to be aware that the Independent Contractor status is a special IRS classification, applicable to real estate agents among certain other professionals. That status enables real estate brokers to avoid having to pay withholding, social security, Medicaid and other taxes to the federal and state government. In order to qualify for carrying you as an Independent Contractor, a real estate broker must maintain in your Independent Contractor file, an annual statement of understanding in which you, the Associate, state items that are similar or the same as the following 9 items: I, __________________(Associate) state as follows: 1. I am a ___broker ______ salesperson duly licensed in the State of __________ and am affiliated as an independent contractor with __________________(Broker). 2. I have paid all of my own license fees and membership dues. 3. I have paid all of my own automobile and transportation expenses without receiving any reimbursement from the Broker. 4. I have paid all entertainment and other incidental expenses in connection with soliciting listings and procuring prospects without receiving any reimbursement. 5. I have not been required by the Broker to maintain any specific schedule. 6. I have not had to consult with the Broker regarding scheduling of my vacations or working hours. 7. I have received no salary or sick pay and I am compensated on a commission basis. 8. I have paid my own income and FICA taxes. 9. My association with the Broker may be terminated by either party at any time upon notice given to the other; but the rights of the parties to any fees which accrued prior to termination are not divested by termination.
In other words, as an Independent Contractor you have agreed, in advance, to the above 9 statements. There are no other rights that accrue to you as an Independent Contractor, except the right to terminate your association with your broker. If your broker also uses an Independent Contractor Agreement ("ICA") between you and the Broker, you should consult the section that states the requirements to which you have agreed, dealing with the "Approving Advertising" section of your ICA. Question (MO): I'm looking for a property on the Mexican side of the border, with an asking price of about 50,000 pesos. Do you know of any? I hope I can find one. Answer: We suggest that you choose your favorite search engine and enter "mexico + real estate" without the quotes. We used Google and it returned 24,800,000 sites. 50,000 Mexican Pesos is currently about $4,549.35 USD, which is not very much money to pay for property -- whether improved or raw land, in either the USA or in Mexico. We'd suggest communicating with a few firms active in Mexico and give them the specifics for which type of real property you are seeking. Question (TN & FL): I placed my townhome for sale in November of 2006. My home is located in Plantation Florida (Broward County). My problem is my association. They have canceled two deals so far and a third walked away from buying because of fears of the association's actions. The first two deals were both approved by their lenders and had met all financial requirements from the lender. Deal #1 was canceled by my association 48 hours before we were to close. The second deal was canceled by the association 5 days before closing. I am at a loss for what to do at this point. My wife and children have since relocated to Tennessee and I was going to purchase a new home with my equity and had everything set up. When the first deal was canceled I had to finance my new home by 100 percent financing. Thank goodness I had the credit to do that. I thought when we had a second offer and the buyers were approved that my problems would go away. After the association canceled that deal I am now left with three mortgages and a new job that is in no way going to pay for them. I am at serious risk now of losing my Florida home and the $100,000 dollars equity that I have in that house. My Realtor tells me that in his 20+ years of experience he has never come across this problem. Since I am in Tennessee now I have asked my father-in-law to pursue a lawyer for me from Florida to see what action I can take. The problem is that this all takes time and I am afraid they will foreclose on my house and I'll lose everything because of this association board's actions in cancelling my sales. My personal opinion is that there is some form of discrimination going on here due to the race and color of the two families that were going to buy my house. Their credit in both cases was good enough to be approved for a $250,000 townhome and both were ready to close. The association said in both cases that they were cancelling the deals because of credit problems. The association will not talk to me and gives my Realtor an attitude every time he calls. I just don't know what to do. If there is any advice you can give me, I would appreciate it very much. Answer: You need to hire an attorney ASAP. An attorney can file a temporary injunction on your behalf if he or she shares your concerns regarding a foreclosure. The Florida Lawyers Referral Service is located here. If what you allege is true, any lawyer worth his or her salt is going to come down on this HOA for discriminatory practices, and may even turn them in to the appropriate Florida and Federal compliance agencies, such as eeoc.gov. One note, you should have a copy of all your Association documents (rules, regulations, restrictive covenants, etc.) and those you received when you purchased your Florida townhome. Your attorney may ask for copies of those. | 
