Archive for June, 2009
Mortgage Fraud, Material Facts and More from this Year's CE
June 9th, 2009 Categories: About Agency in NC
Real Estate Brokers Educated, Consumers Protected, Through Continuing Realtor Education
What would you say if you went to see a new home, you liked the home, and the sales agent said that they would refund $50,000 two weeks after the sale of the house- a rebate for buying, what a great deal, they would even write it down and put it in a separate contract, would you take it? Or suppose you were selling your home, and you weren’t asked so you didn’t mention you’d had an addition put on without a permit, what’s the harm in that, no one asked you, right?
In the first case, that’s called mortgage fraud, and in the 2nd, it is a willful concealment of a material fact, you (the Seller)Â just left your self wide open to a law suit, and the Listing Agent, who could have and should have asked, is probably liable as well, and may be disciplined by the Commission.
Each year, we real estate agents have to take a 4 hour mandatory continuing education class and a 4 hour elective, this year I took on a full day with Sandy Williams of the JY Monk Real Estate schools and it was a treat … Sandy wound us through an intricate trail that included a new look at Material Facts- what are they, and how to recognize them, and on to a course in predatory lending and mortgage fraud moved forward by her thought provoking stories and discussion format.
So What is a Material Fact?
The big facts are easy…the proposed highway, Wal-mart going up across the street… but the definition is broad, it is “Anything that could affect the value of a property or its marketability“– so that would include a short sale or foreclosure status, but also un-permitted additions, streets maintained by the HOA and not the city, trash pickup and more.
What’s more, material facts have to be shared with all parties, not just the principals, and they have to be shared even if you believe that a reasonable person should know it- it is not enough to say, “Well any person (idiot, Agent, Buyer etc) would know that.”
Why are Material Facts important for Agents to know? Simple, settled real estate law states, “no matter who the Agent represents material facts must be disclosed to all parties”… and “a real estate agent who intentionally or unintentionally gives a purchaser incorrect or incomplete information may be held liable for such statements even though the source of the incorrect information was the Seller or another Broker, and even though the purchaser could have verified the information himself. Further, a Seller and his Agent have an affirmative duty to disclose any latent defects about which they are aware, or should be aware.
That is quite a broad outline of responsibility, and you can see the toughness of the Agency law. It certainly removes most Agent defenses, it removes all of the “I didn’t ask, they didn’t tell ” excuse and sets a high barrier to the “I didn’t know” defense. Agents beware, when in doubt, investigate, ask questions and disclose. Check for the handful of exceptions with the commission, or your handbooks, but if it might scare a Buyer off, it is probably a material fact! Buyer Agents, we have an even higher responsibility to our clients.
For Consumers, full disclosure is a real benefit, and one way the industry has cleaned itself up  over the last 30 years.
The increasing movement to full disclosure, and holding Agents/Brokers and Sellers accountable when they don’t, has shined a bright light on the industry, and made it a safer place for consumers, and a better place to work.
Disclosure, and the advent of Buyer Agency, which demands full representation and fiduciary responsibilities to the Buyer, are quite possibly the two most important changes to the way real estate has been historically done in the US… changes for the better.
Mortgage Fraud
Mortgage fraud went up 1,014% from 1996, to 2006 according to HUD… and the course broke these cases down into 2 categories, those that were helping buyers get into a house, and those designed to defraud the banks for profit. Both were fueled by greed, and consumers and banks were left totally un-protected by government officials… the barn doors were left swung wide open by the Fed’s and local authorities.
Some examples of mortgage fraud include:
Not disclosing other owned property
Stating the intent to live in a property as owner occupied when actually intending to rent it out
Cash is paid to the Seller, or Buyer, outside of the escrow arrangement, and Not recorded on the HUD-1.
A difference exists between the price paid on the contract, and the price on the HUD-1.
The Buyer is required to use a specific lender
The sale is subject to the Seller acquiring title
Mortgage fraud comes in many forms, and today there are multiple parties investigating around the country, the FBI, HUD and some state agencies. If someone says, “We wouldn’t want the Lender to know about this…” That’s fraud! My simple advice? “Don’t do it.” Jail is not good. The only upside of this down market is that without the flush of business, fraud will go down dramatically, and many of the worst elements will return to selling home improvements on credit to poor people or credit cards to teenagers.
Next up, Putting Character Into the Transaction, the Agent’s role. A good title Sandy shared… thanks for the good day Sandy!
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Related Posts
Buyer Agency Illustrated, a True Life Story Do’s and Don’ts of Home Buying
Where were the Realtors in the Sub-Prime Fiasco?
Skilled Buyer Agents and Smart Buyers Make Great Deals Happen! We are skilled! First time home Buyers? Yes, we help first home buyers with a special offer… and we also help buyers secure million dollar foreclosures as well! Call Terry at The McDonald Team, 704-351-1519. See more information and search for homes in Southpark, Matthews, Fort Mill, or Sun City Carolina Lakes.
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Charlotte Weekend Update| Things To Do, Business and Real Estate Notes
June 5th, 2009 Categories: About Charlotte, Charlotte Homes for Sale
Fun things to do this weekend in Charlotte, June 5-7
It’s a busy weekend in Charlotte, a few of the highlights:
Krispy Kreme offers a free doughnut today, no purchase required!That’s a stimulus!
Taste of Charlotte- a quick culinary tour of Charlotte, 6/5-6/7
Gallery crawls: Both NoDa and Historic South End have gallery crawls Friday. The NoDa crawl features Free Music Friday at the Evening Muse.
Charlotte Shakespeare Festival continues (this weekend and next) with multiple performances of Twelfth Night.
A WWII Encampment at Charlotte Museum of History Saturday, June 6, honoring the 65th anniversary of D-Day
Imaginon- daily events, mostly free, take the train in or free parking underground, engaging activities for pre-schoolers to teens
visit my friend at Charlotteonthcheap.com for more
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Business Notes from Charlotte NC
North Carolina announced that Apple computer will invest $1Billion in North Carolina and will, in all likelihood, be in one of the economically hard pressed counties (Cleveland and Caldwell mentioned most often) within 50-70 miles of Charlotte. Their “East Coast Data Center” will employ about 50 skilled workers, however economic spinoff is expected to be much higher. Google already operates a similar center in Caldwell County North Carolina, since 2006.
Ethan Allen announced the addition of 302 new jobs at it’s Maiden plant, an investment that will ake 3 years to fully realize. Good news for our furniture industry.
Mortgage Lenders are hiring! Despite the recent interest rate uptick, new purchases are driving the process! yea!
Mecklenburg County foreclosures are up, way up over 2008. For the year, a 30% increase over 2008 through May.
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Real Estate Notes
Pending Home sales rose 6.4% in May, generally a good sign. However, I fear it is on the backs of increased foreclosures and dirt cheap houses. Pending sales fell in the South .2% even as Charlotte fared better.
Here is a very cool Charlotte New Home tool if you want to search exclusively for new homes: From Lake Norman to Fort Mill, Waxhaw to Huntersville, if its new, its here.
Charlotte New Homes
In addition, new pages have been added at TerryMcDonald Real Estate.com, including pages for Matthews Homes and Waxhaw-Weddington Homes which will help families relocating to Charlotte look at these areas more closely.
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Skilled Buyer Agents and Smart Buyers make great Deals happen! We are skilled! Call the McDonald Team at 704-351-1519 for your Charlotte Real estate needs.
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Charlotte Summer Sports Camps, Not Found One Yet?
June 4th, 2009 Categories: About Charlotte, Buy A Charlotte Home, Union County
Still Looking for Summer Sports Camps? Here are 3 that had slots open
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Bobby Jones Basketball Camps Bobby Jones, former NBA Basketball Player, Camp Director Camps – Mon.-Thurs. 9:00am-3:00pm $220 per week, discounts and scholarships available Camp Weeks |
Multi-Sport Camps Camps – Mon.-Thurs. 9:00am-3:00pm $150 per week Scholarships available Camp Weeks |
Cheerleading Camps Elizabeth Rose, Upward Cheerleading Coordinator, Camp Director Camps – Mon.-Thurs. 9:00am-12:00pm $90 per week Scholarships available Camp Weeks |
This post came over from the South Charlotte Sports Report. You can find just about anything thats going on in school and club athletics in South Charlotte there. Check it out.
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Related Posts for Things To Do With Children in Charlotte
Family Fun At Grandfather Mountain
The Levine Museum of the New South
Skilled Buyer Agents and Smart Buyers Make Great Deals Happen
The McDonald Team 704-351-1519, see Charlotte Best Introduction Video, #1 on You Tube for Charlotte NC Real Estate and Communities, or Search for Charlotte Homes.
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Negotiating In Waxhaw's Providence Downs…Good Selection, Great Results!
June 1st, 2009 Categories: Buy A Charlotte Home, Union County
I wrote about two clients selling their homes in difficult out of state markets, and it was time for them to move, this is the first story
Buying a Custom Home in Union County
The first family was a physician from Atlanta with his wife and two children, and they accepted a (very low) offer on their Atlanta home two weeks ago, (about $100K shy of where they had hoped to be) and came last weekend to find and buy a home. After 3 exhausting days, we found 2 excellent candidates, and began negotiating on their first choice.
Providence Downs is located off Rea Road, about 2miles south of Blakeny at Ardrey Kell, and this is a Providence Downs beauty… built by a commercial builder to exacting standards for his own use, this is quite possibly the best built home in Providence Downs, with many million dollar home features, including a barrel ceilings, coffered ceilings, heavy moldings, heated travertine floors, Thermidor appliances, 18″ ceramic tile, beautiful light fixtures, and not a floor squeak anywhere in this 1.5 story home.
At just over 4,800 square feet, it is a large comfortable home, and the replacement cost would be atleast in the 900’s. Today’s cost to build new high-end custom is about $165/sf (the economic downturn has had one benefit, custom prices have fallen, down from the $200/sf of a the last several years). The building cost would be $792,000. It’s on a premium .9 acre lot, so $150,000 is a reasonable lot price-at today’s prices, many were sold over 250K, which would place its replacement value at about $940,000.
The comparable homes sold properties in area 10-1 (Marvin-Waxhaw) are all over the place, from the essentially tract homes at around $100/sf (one in PD, several in surrounding areas), a handful of short sales and foreclosures in teh PD “annexes” like Unbridle, Skipaway and Silver Charm, to $161/sf in PD and $178/sf across the street at Walden on Providence for a true custom home. This first choice home was not unreasonably listed at $839,000 in December, $174/sf, below the Walden house… most would say PD is the better of the two communities; in February, the Sellers dropped their Listing Price to $799, $749,000 in April, and $699 in May, the price we saw it at.
These realistic aggressive Sellers had their Providence Downs home priced $100,000 below our 2nd choice and slightly larger home in neighboring Wyndham Hall. While I can not reveal the exact Sales price at this time, it is safe to assume we did not pay full List price, and it is also very safe to assume as you look at the numbers above, we made up for the $100K my Doctor client “lost” in Atlanta.
Moral of the story? If you can get your home sold, come on down, we’ll save you the money here.
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Skilled Buyer Agents and Smart Buyers Make Great Deals Happen, Call Terry McDonald of the McDonald Team for your Charlotte Luxury home, from Waxhaw to Lake Norman. 704-351-1519
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