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Plymouth and South Shore Association of REALTORS® 2013 Orientation.

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Presentation on theme: "Plymouth and South Shore Association of REALTORS® 2013 Orientation."— Presentation transcript:

1 Plymouth and South Shore Association of REALTORS® 2013 Orientation

2 The goals of this Orientation session include: –To explain what it means to be a REALTOR® –To introduce you to the three levels of membership, National, State and Local –To review the REALTOR® Code of Ethics –To highlight important aspects of Agency –To create awareness of Government Affairs and the REALTOR® Political Action Campaign (RPAC) –To familiarize you with the key aspects of Anti-Trust and Fair Housing Welcome New Members! 2

3 8:30–8:45amWelcome & Introductions 8:45–9:15amWhat is a REALTOR®? 9:15–11:45amCode of Ethics 11:45–12:30pm Networking Lunch 12:30-1:45pmAgency 1:45-2:30pmGovernment Affairs & RPAC 2:30-2:45pmBreak 2:45-3:45pmAnti-Trust & Fair Housing 3:45-4:30pmWrap up & Quiz Agenda 3

4 National Association of REALTORS® (NAR) –Code of Ethics –REALTOR® Magazine –REALTOR® Designations and Certifications –REALTOR® Federal Credit Union Massachusetts Association of REALTORS® (MAR) –Bay State REALTOR® publication –Legal Hotline 800-370-5342 –Technology Hotline 866-232-1837 –On-line Continuing Education Over 1 million strong! 4

5 Plymouth and South Shore Association of REALTORS® (PASS) Leadership Staff PASS Real Estate School #1131 offers local live classes and access to MARs on-line education Monthly newsletter – PASSWord Networking events, Membership meetings and more! YOUR Local Association 5

6 National Association of REALTORS® Code of Ethics Required of all REALTORS® in each 4 year Quadrennial to maintain Active REALTOR® status. The current Quadrennial is 2012-2015 and this course fulfills your requirement. Code of Ethics 6

7 7 History National Association of Real Estate Exchanges Formed on May 12, 1908 Code of Ethics was created in 1913 MAR was formed in 1927 and adopted the code at that time Code of Ethics

8 8 The Wild West Caveat emptor: Buyer beware To establish professional standards Binding on all Realtors® It was good for business The Code became the basis for state licensing laws MA started licensing in 1957 Why do we have a Code of Ethics?

9 9

10 10 Ethics defined: ethics (ĕthîks) The rules or standards governing the conduct of the members of a profession. – The American Heritage Dictionary The Golden Rule

11 11 Structure The Three Major Sections 1.Duties to Customers and Clients 2. Duties to the Public 3. Duties to Realtors® Code of Ethics

12 12 Act in the Best Interests of the Client, Honesty

13 13 Avoid Misrepresentation

14 14 Cooperation – not Compensation

15 15 Disclose Interest in Property – Im a Realtor

16 16 Disclose contemplated Interest in Property

17 17 Disclose Profit from Other Services

18 18 Consent for Fees from more than One Party

19 19 Escrow Funds Separate – No Comingling

20 20 Get Agreements in Writing – Whenever possible

21 21 Shall not Discriminate Protected Classes Fair Housing

22 22 Must be Competent to Perform Services

23 23 Truth in Advertising

24 24 Shall not Practice Law

25 25 Cooperate with Professional Standards Process

26 26 Dont speak poorly of Competition

27 27 Dont interfere with another Realtors Agency Relationship

28 28 Obligation to Participate in Arbitration

29 29 Case Studies Code of Ethics

30 30 Ethics Deals with alleged violations of the Code Arbitration Deals with business disputes The same basic process is used for both types of enforcement. Enforcement

31 31 Ethics A. Filing a complaint B. Grievance Committee C. Professional Standards Hearing Panel D. Discipline Discipline A. A fine up to $5,000 B. Suspension or Termination of membership C. Require additional education course(s) Enforcement

32 32 Arbitration A. Filing a complaint B. Grievance Committee C. Mediation (allows for compromise) D. Professional Standards Hearing Panel E. Payment of award (all or nothing) Appeal A. To the Board of Directors B. Due process C. Decision is final Enforcement (cont.)

33 33 Please move upstairs to enjoy lunch with our featured 2013 PASS Sponsors! Networking Lunch

34 Types of Agency Representation – Sub Agency – Buyer Agency – Facilitation (Non-Agency) – Designated Agency – Dual Agency – For Definitions and Resources visit: – (Buyer and Seller Handouts are included on this site.) Agency Relationships 34

35 35 Agency: The relationship resulting from mutual consent between the principal and his or her agent that the agent will act on the principals behalf and be subject to his or her control. Agency Relationship: Under the common law, this relationship is defined as follows. 1.Agency is the fiduciary relationship which results from the manifestation of consent by one person to another that the other shall act on his behalf and be subject to his control, and consent by the other so to act. 2.The one for whom action is taken is the principal. 3.The one who is to act is the agent. Agent: A licensee who has agreed to act on behalf of his or her principal and to be subject to that principals control. The agent in a common law state is the brokerage represented by the principal or designated broker, also called broker in charge. The Definitions

36 36 What is the Foundation of an Agency Relationship? Are you a Client or are you a Customer? Customer? Asking the Questions

37 37 A client is someone who engages the services of and is represented by an agent in a transaction. The agent for the client will negotiate the best price and terms for that client. A SELLER becomes a client by signing a Listing/Marketing Agreement with a real estate company that clearly establishes the obligations of both parties. As SELLER CLIENT, your interests are protected by the agents duties to you including obedience, loyalty, disclosure, confidentiality, accountability and reasonable care. What is a Client?

38 38 A subagent is an agent of another agent. Both agents represent the CLIENT – who could be either a BUYER or SELLER. The subagent works with a CUSTOMER but for the CLIENT. What is a Customer? What is a Buyer Customer? What is a Subagent?

39 39 A BUYER can become a client by requesting that the broker be a BUYERs agent. The agent for the BUYER CLIENT will negotiate the best price and terms for that client. A BUYER becomes a client by signing a Buyer. A BUYER becomes a client by signing a Buyer Representation Agreement with a real estate company that clearly establishes the obligations of both parties. As a BUYER CLIENT, your interests are protected by the agents duties to you including obedience, loyalty, disclosure, confidentiality, accountability and reasonable care. What is a Buyer Client?

40 40 A dual agent is a real estate broker who represents both the BUYER and the SELLER in the same transaction. Dual agents must have the informed consent of both the BUYER CLIENT and the SELLER CLIENT in order to act as a dual agent. What is a Dual Agent?

41 41 A Designated Agent is when one Salesperson|Broker in a brokerage is appointed to represent the Seller, and another Salesperson|Broker within the same brokerage is appointed to represent the Buyer without either salesperson being considered a dual-agent. Brokerages practicing designated agency must: Disclose at the commencement of the relationship the limited relationship with the buyer or seller. Serve as agent only to the party the licensee agreed to represent. Fulfill the duties owed to the respective client, as spelled out in the license law and in the agency agreement. When & if another agent is designated to appoint a client on the other side of the same in-house transaction, the appointing broker becomes a dual agent. What is Designated Agency?

42 42 A Facilitator is when a licensee who works as a facilitator assists the Buyer and Seller to find one another and reach an agreement. What is a (non-agent) Facilitator?

43 43 Subagency occurs when one real estate agent (brokerage) hires another real estate agent, in a separate firm to help perform his or her duties. Brokers and Salespersons working as subagents treat consumers as customers. Subagency occurs most commonly when listing agents offer compensation to subagents to assist in finding a buyer for their listing. Buyer agents, however, also use subagents to assist them in finding property for their buyer clients. *Effective July 1, 2005, in order to practice subagency in Massachusetts the brokerage firm must obtain written permission from the client before offering compensation to subagents. This written permission must include a disclosure of the risks of vicarious liability. The law in Massachusetts applies equally to both kinds of subagency. Each real estate company must decide individually whether or not to offer compensation to subagents. Subagency in MA (as of 2005)

44 44 Liability and Responsibility –Represent the seller on a client basis and treat the buyer as a customer –Agent must carry out all lawful instructions of the seller –Reasonable care – due diligence – agent must act competently, capable of performing duties within scope of license Vicarious Liability –When one person is liable for the negligent actions of another person, even though the first person was not directly responsible for the action. For instance, a selling broker is liable for a subagents words and/or actions, even if they contain misinformation The Seller Agent

45 45 Confidentiality Duty to keep clients requirements, information or discussion confidential, duty survives termination of agency relationship Seller Agents Disclosure to Prospective Buyers –Seller Disclosure Form – sellers consent to disclose information pertaining to the sale of their home The Seller Agent (cont.)

46 46 In addition to their general fiduciary responsibilities, licensees acting as sellers agents, including listing agents and subagents, owe the following specific duties to their clients: To obtain written consent from the seller prior to offering Subagency. Seller consent must include a disclosure that the seller has been advised of the risk of vicarious liability. To seek an offer to purchase at a price and with terms acceptable to the seller. Unless the seller directs otherwise, the listing agent is not usually obligated to seek additional offers once the property is subject to a contract of sale. To present all offers forthwith (i.e. in a timely manner). To obtain written consent before acting as dual agent. Overview: Duties of a Sellers Agent

47 47 Liability and Responsibility –Represent the buyer on a client basis –Agent must carry out all lawful instructions from the buyer –Disclose all information relevant to the client –Confidentiality of client information or discussion Compensation –Client pays fee –Offer compensation by listing broker through MLS –Compensation directly from transaction proceedings –Hourly – flat fee - % fee of purchase price The Buyer Agent

48 48 Establishment of Agency –Express written or oral contract where agent and client agree to terms –Implied agency by actions or words Obligation –To work in the best interest of that buyer obtaining them the best terms, conditions and price The Buyer Agent (cont.)

49 49 In addition to their general fiduciary responsibilities, licensees acting as buyers agents owe the following specific duties to their clients: To use reasonable efforts to locate a property at a price and on terms acceptable to the buyer. Unless the buyer directs otherwise, the buyers agent is not obligated to continue to show properties to the buyer once the buyer is a party to a contract to purchase. A licensee does not breach any duty or obligation to the buyer by showing the same property to other buyers, or by acting as an agent or subagent for other buyers. However, it is recommended that this be stated in a buyer agency agreement. To present each offer or counteroffer to purchase to the listing agent in a timely manner, even if the property is subject to a contract of sale. To obtain consent before acting as a dual agent. Overview: Duties of Buyers Agent

50 50 Expiration of agreement Mutual agreement to terminate Completion of performance Death or insanity Impossibility of performance Incapacity (i.e. mentally incapable) bankruptcy Termination of an Agency Relationship

51 51 1.Youre doing an open house and you represent to a perspective Buyer your relationship with the Seller that of a Sellers agent, the Buyer requests representation and your office practices designated agency. Whats your response to the Buyers request? 2.You have completed an evaluation on a home and realize the next day that you lost the listing to your competition. During the evaluation, the seller revealed personal information to you. You realize a buyer client youre working with would express interest in the home knowing what you know about the seller. Can you still represent the buyer in this transaction? Q & A

52 52 3.Your office practices dual agency, what are your responsibilities to both the Buyer and the Seller? 4.Youre the listing agent of a home and the Seller asks Whats the vicarious liability they have with a Buyers agent? Whats your response? Q & A

53 53 5.You represent a Buyer who is interested in seeing a home. Another Buyer whom I represent also wants to see the same home. Is it a violation of my agency duties to show it to both of them? 6.Can words and actions on the part of the agent result in an implied agency relationship? Q & A

54 54 For Definitions and Resources visit: Buyer and Seller Handouts are included on this site. Resources

55 55 If Real Estate is your profession, then politics is your business! Government Affairs & RPAC

56 56 Zoning Regulatory Agencies Taxes Condemnation / Eminent Domain Restrictions to Private Property Rights

57 57 Mortgage Interest Deduction National Flood Insurance Program Fannie Mae Short Sale Commissions National Association of Realtors® at work for Real Estate

58 58 Sales Tax on Services Town of Shirley Sign Fee Proposal Vacation Home Rental Tax The Massachusetts Association of Realtors® at work for Real Estate

59 59 H-123 Real Estate Licensing –Continuing Education to 20 hours bi-annually H-3723; S-2076 Second Hand Metal Dealer Registry – Require scrap dealers to keep a log of information from all transactions ( ie, purchasing metal from walk-in customers – Forward the information on the item and the seller to the Criminal History Systems Board within 48 hours – Retain all metal items received for 10 days Current statewide issues affecting Real Estate

60 60 S1698 Energy Audits - Requires all home owners to furnish prospective buyers with a completed energy evaluation – Massachusetts has the nations third oldest housing stock; – MassSave already provides homeowners advice and resources to make their homes more energy efficient upon request. – MAR is opposed to any mandate that would label or score homes in terms of energy efficiency – MAR is opposed to any governmental agency or contractor taking thermal images of peoples homes without the prior consent or permission of the homeowner Transfer Taxes –On-going year after year Current issues continued

61 61 Register to vote! What can I do?

62 62 Join the Realtor® Political Action Committee (RPAC) What can I do?

63 63 Realtor® Day on Beacon Hill June 5, 2013 NAR Mid-Year Legislative Meetings May 13-18, 2013 PASS Legislative Social (Sept) What can you do?

64 REALTOR® Call for Action Centers National level State level 2012 NAR Public Policy Accomplishments Donate to REALTOR® Political Action Committee (RPAC) today! Government Affairs & RPAC 64

65 Anti-Trust Laws promote competition in the marketplace Anti-Trust Pocket Guide from NAR Anti-Trust 65

66 66 Fair Housing Laws prevent discrimination of protected classes Fair Housing Handbook from NAR Fair Housing HUD Poster Fair Housing Poster (MA Law) April Fair Housing Annual Member Meeting (April 10, 2013) Fair Housing

67 Orientation Quiz 67

68 I pledge myself: To strive to be honorable and to abide by the Golden Rule To strive to serve well my community, and through it, my country To abide by the REALTOR® Code of Ethics and to strive to confirm my conduct to its inspirational ideals To act honestly in all real estate dealings To protect the individual right of real estate ownership and to widen the opportunity to enjoy it To seek better to represent my clients by building my knowledge and competence. REALTOR® Pledge 68

69 Congratulations! 69

70 70 PASS 2013 Premium and Platinum Sponsors

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