My regular readers will know that I am not a fan of government intervention. Rarely, if ever, does it result in a better product, good or service. Typically, it adds cost and bureaucracy. Having said all that, as a Realtor, it is also my job to stay abreast of any programs that might assist my clients. Naturally, the first government aid is the $8,000 tax credit that first time buyers receive if they buy a home. A first time buyer, by the way, is categorized as someone who has not owned a home in the past three years. There are some conditions, and limitations, attached to this credit so please consult with an experienced lender for more information.
Secondly, whilst consulting with a lender in concert with a young couple searching for a new home in Buckeye, we learned of another loan program administered by the United States Department of Agriculture. Yes, really! It is designed to provide assistance to spur rural development of land that was once farmed, or designated agricultural.
It is very similar to a V.A. loan in that borrowers can get a 100% loan with no down payment, no private mortgage insurance and a 30 year loan with a fixed rate. The icing on the cake? The seller can contribute up to $6,000 towards buyer's closing costs or pre-paids.
When you factor in that a 2000-2500 sq. ft. home in Buckeye, likely less than 3 years old, can be bought easily for around $100K, it is no wonder these home are flying off the shelves. It's cheaper than rent. By the way, it's not just Buckeye that qualifies, there are other communities, so speak to your preferred lender today.
Tuesday, June 30, 2009
Wednesday, June 10, 2009
Code of Ethics Woes in the Phoenix Real Estate Market
A recent ethics investigation demonstrated a Phoenix area Realtor did not act in the best interests of his/her client.
Recently, a Phoenix area buyer ran into a spot of bother with his Realtor. Obviously, the reporting named no names, so this anonymous story could occur to anyone, and is a tale worth re-telling.
Briefly, the buyers found their dream home and instructed their Realtor to prepare a full price offer in order to increase their chances of buying the home. The Realtor said he would do so, but only if they signed an agreement that stated should they ever re-sell the home, he would get the listing. The buyers said "No way!". However, after due consideration, they decided that they wanted the house so badly, that they acquiesced, signing the agreement. After the closing, they filed an ethics complaint with the local board. Good for them.
The Realtor lost. The board found that he was placing his own financial gain over his fiduciary responsibility to his clients. The "pre-listing" was cancelled and the Realtor presumably received some form of punishment. This can range from a warning letter, to additional education requirements, and sometimes revocation of licence; unlikely in this case.
The buyers in this instance did the right thing, and the Realtor behaved despicably, and is the type of person I would like to see run out of the industry. To that end, I would have taken it one step beyond, were I the buyers.
I would have contacted a strong, experienced agent and had him/her write the offer, after having fully explained the situation. The deal would then close, as it had done previously. Then, in all likelihood, the spurned Realtor would probably haul the second Realtor before the board demanding a commission as the "procuring cause" in the transaction.
If I were that second Realtor, I would then argue strenuously that the vagabond had abdicated his fiduciary responsibility to the buyers, who justifiably no longer felt he was acting in their best interests. I believe I would win that argument. The buyer would still have their house, but the rogue Realtor would not receive a commission. After a while, folks like that go back to their "real job". Good riddance.
Recently, a Phoenix area buyer ran into a spot of bother with his Realtor. Obviously, the reporting named no names, so this anonymous story could occur to anyone, and is a tale worth re-telling.
Briefly, the buyers found their dream home and instructed their Realtor to prepare a full price offer in order to increase their chances of buying the home. The Realtor said he would do so, but only if they signed an agreement that stated should they ever re-sell the home, he would get the listing. The buyers said "No way!". However, after due consideration, they decided that they wanted the house so badly, that they acquiesced, signing the agreement. After the closing, they filed an ethics complaint with the local board. Good for them.
The Realtor lost. The board found that he was placing his own financial gain over his fiduciary responsibility to his clients. The "pre-listing" was cancelled and the Realtor presumably received some form of punishment. This can range from a warning letter, to additional education requirements, and sometimes revocation of licence; unlikely in this case.
The buyers in this instance did the right thing, and the Realtor behaved despicably, and is the type of person I would like to see run out of the industry. To that end, I would have taken it one step beyond, were I the buyers.
I would have contacted a strong, experienced agent and had him/her write the offer, after having fully explained the situation. The deal would then close, as it had done previously. Then, in all likelihood, the spurned Realtor would probably haul the second Realtor before the board demanding a commission as the "procuring cause" in the transaction.
If I were that second Realtor, I would then argue strenuously that the vagabond had abdicated his fiduciary responsibility to the buyers, who justifiably no longer felt he was acting in their best interests. I believe I would win that argument. The buyer would still have their house, but the rogue Realtor would not receive a commission. After a while, folks like that go back to their "real job". Good riddance.
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