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If a home seller is not happy with his agent, can the seller fire the agent and hire a new agent?  That is the question from a caller on the Success in Real Estate Show on Saturday.  Unfortunately, it is a very common question for home sellers and buyers.  How should that question be answered?

If you are a licensed real estate agent in South Carolina, I am sure you have had buyers and sellers ask you if they can fire their current agent and work with you.  As a licensed agent, how do you reply and what should you tell the upset buyer/seller?  One thing you cannot tell them or even suggest is that they terminate their current agreement.  SC License Law states that recommending or suggesting that one should break or in anyway try to get out of a valid contract is a License Law Violation.  Additionally, you could be accused of “practicing law” when you recommend a contract be terminated.  Practicing law without license is also illegal.

So what is the right thing to say?  Although there is no one answer, I believe the disgruntled buyer/seller should request a meeting with the Broker-in-charge (BIC). Unfortunately, most do not know or understand they have a BIC.  There is only one Agent per office and that person will be the BIC.  All other licensees within the office are considered Sub-agents of the Agent.  When a seller hires an Agent to sell their home, they have hired the BIC, not the licensee they are usually negotiating with.  I always recommend the buyer/seller meet with their BIC and discuss the issues.  I would think the BIC can remedy the problem in most cases if the BIC is made aware of the problem.  If the problem cannot be remedied, most BIC’s will probably offer a release of their contractual obligations allowing the buyer/seller the right to hire a new Agent.

South Carolina Real Estate Agents/Licensees have an obligation to explain to potential clients how the Laws of Agency work.  Licensees must explain to buyers/sellers that they are hiring the BIC/Company and as a licensed sub-agent for the company, you will be providing the representation and fiduciary duties as required by the company’s policies.  If the buyer/seller believes when they sign an Agency Agreement that they are hiring the licensee, the Laws of Agency were not properly explained.

If you are interested in getting your South Carolina Real Estate License, we would love to have you attend our Real Estate School For Success.  We will train you to not only pass the state exam, but also teach you how to build a lucrative career in the Real Estate Industry.  We also offer many other licensing courses such as Property Manager, Appraiser, Home Inspector, etc.  The Real Estate School For Success is an approved MyCAA provider, which allows for many military spouses to take all classes at no charge.  Give us a call for details.  You can also receive a 10% discount on any licensing class by entering the promo code below when you register on line at the Real Estate School for Success.  This discount may not be used with Designation classes or promotional classes that have already been discounted.

Discount/Promo Code is: Agency

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As the buyer or seller of real estate, one must pay attention to all the provisions in the Contract of Sale.  Although there are many provisions, the one I want to address now is the finance provision.  Home buyers must address in the Contract of Sale the type of financing that will be used and the terms of the financing.

Many Home Buyers will not apply for financing until the Seller accepts their offer.  Although the contract allows the Buyer five (5) business days from the date of contract acceptance to apply for a loan, the Contract of Sale must specify the type of financing the Buyer will be using.  The type of financing is important to the seller because it will impact the sellers net or bottom line.  If the buyers has not been approved for a loan prior to making the offer, the buyer can only guess what type will be used.  Say the buyer indicates in the contract they will be using conventional financing and then find out later they cannot get approved using conventional, but they can get approved using FHA.  If the seller does not agree to the new financing, the buyer is now in default of the Contract of Sale and will be liable for damages by not performing.  If the financing must be changed, buyer and seller must agree to the change by signing a financing addendum.

Home buyers must also state the terms of the financing such as the Loan To Value (LTV).  The buyer’s real estate agent must provide their buyer a net sheet to the buyer prior to making an offer.  Buyers must know how much money they will have to bring to closing if the Seller accepts their offer.  It is amazing to me the number of buyers that cannot close when they find out how much money they will be required to bring to closing.  Even worse, many of the buyers will not find out how much they must have until 24 hours prior to closing and many times, the day of closing.  In many Contracts of Sale, a different provision states that all financing contingencies go away five (5) business days prior to closing.  Now when the buyer discovers they do not have the money for closing, they also learn they are in default and will be liable for damages due to non-performance. 

Home buyers and sellers must have a competent real estate agent to ensure their interests are protected in the Contract of Sale.  Unfortunately, too many real estate agents just fill in the blanks of the Contract of Sale with the knowledge and understanding of their client is agreeing to.

NOTE:  There will be a Subdivision Garage Sale in Timberlake this Saturday from 8am till 12:00pm on May18th.  For more information, contact Peggy Aun at Peggy@aunmckaylaw.com.  

If you are interested in getting your South Carolina Real Estate License, we would love to have you attend our Real Estate School For Success.  We will train you to not only pass the state exam, but also teach you how to build a lucrative career in the Real Estate Industry.  We also offer many other licensing courses such as Property Manager, Appraiser, Home Inspector, etc.  The Real Estate School For Success is an approved MyCAA provider, which allows for many military spouses to take all classes at no charge.  Give us a call for details.  You can also receive a 10% discount on any licensing class by entering the promo code below when you register on line at the Real Estate School for Success.  This discount may not be used with Designation classes or promotional classes that have already been discounted.

Discount/Promo Code is: Finance

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Most contracts of Sale include a Due Diligence Period.  This due diligence period is a time for the buyer to conduct inspections and have information about the property verified.  The typical due diligence period will be ten (10) business days.  During this time of inspections, I believe it is the Buyers Agent responsibility to personally verify all information provided to the Buyer to include information in the Multiple Listing Service (MLS).  The buyer is paying their Agent to verify that they are buying what they think they are buying  Although the buyer can order any inspection they feel necessary, there are a few that I recommend at a minimum.  Those include:

1.      Home Inspection

2.      Termite Inspection (CL-100 Letter0

3.      Heating and Air (HVAC) Inspection

4.      Survey

The Buyer needs to determine prior to making an offer if they want a Due Diligence period or will they by buying the property AS-IS?  If the Due Diligence period is elected, buyer has ten (10) business days to verify all information and have selected inspections completed.  Also during the ten days, if the buyer discovers issues they are not willing to accept, the seller must be notified by written addendum of all issues the seller will be expected to resolve.  If the Seller does not receive the written addendum during the ten business days, the buyer will have waived all their rights under the terms of the agreement. 

Another option for the buyer is to purchase the property AS-IS.  There are two considerations with this option.  The first is to purchase AS-IS with no Due Diligence period which means the buyer is buying the property without inspections being performed.  The second is to purchase AS-IS with a Due Diligence period.  This way the buyer will have inspections performed within the allotted time.  Although the buyer will not be asking the seller to make repairs, the buyer can terminate the contract if the buyer is not happy with the results of the inspections.  Buyer must notify the seller within the stipulated time period of their intent to terminate or the buyer will be in default of the Contract of Sale.

If you are interested in getting your South Carolina Real Estate License, we would love to have you attend our Real Estate School For Success.  We will train you to not only pass the state exam, but also teach you how to build a lucrative career in the Real Estate Industry.  We also offer many other licensing courses such as Property Manager, Appraiser, Home Inspector, etc.  The Real Estate School For Success is an approved MyCAA provider, which allows for many military spouses to take all classes at no charge.  Give us a call for details.  You can also receive a 10% discount on any licensing class by entering the promo code below when you register on line at the Real Estate School for Success.  This discount may not be used with Designation classes or promotional classes that have already been discounted.

Discount/Promo Code is: Diligence

Baine Termite and Pest Control

 http://youtu.be/Jga-R-jnEsQ  Click Here to Watch the Show

Bobby Baine, owner of Baine Termite and Pest Control, has been ridding termites and other pests from homes for over 37 years.  You just don’t make it that long in business if you are not doing it the right way.  As Bobby explains on our show, if you live in the South, you will have termites.  Termites are here and homeowners must protect their homes from these very destructive creatures.  Homeowners should have a Termite bond on their home.  By having the bond, should termites cause damage to your home, Bobby Baine will totally repair all damages caused by the termites at no additional expense to the property owner.  Not all termite companies make such guarantees so make sure you know what you are agreeing to.

Erica West, Mortgage Consultant with Movement Mortgage, also explains that even if the underwriter does not require a CL-100 Letter, but it shows up on the HUD-1, Settlement Statement, the underwriter will require the CL-100 Letter be provided.  This letter or inspection is much more than just a termite inspection.  The inspector will also be looking for excessive moisture and/or water damage in and under the home.  If the moisture level is too high under the home, you will not receive a clear letter.  I recommend you open the vents around your foundation so air can circulate under the house.  This will help lower the moisture level under you home. 

If you are interested in getting your South Carolina Real Estate License, we would love to have you attend our Real Estate School For Success.  We will train you to not only pass the state exam, but also teach you how to build a lucrative career in the Real Estate Industry.  We also offer many other licensing courses such as Property Manager, Appraiser, Home Inspector, etc.  The Real Estate School For Success is an approved MyCAA provider, which allows for many military spouses to take all classes at no charge.  Give us a call for details.  You can also receive a 10% discount on any licensing class by entering the promo code below when you register on line at the Real Estate School for Success.  This discount may not be used with Designation classes or promotional classes that have already been discounted.

Discount/Promo Code is:  Baine

 Home Inspection seminar.pdf (810.98 kb)  Flyer for Andy Aun's Seminar

David Dubose

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Who should have a Home Inspection, Buyers or Sellers?  The short answer to that question is both.  South Carolina has a state law, SC Property Condition Disclosure Law, which requires sellers of residential property to disclose all known problems, malfunctions or defects with the property.  If the law requires sellers to disclose such defects, then why does the buyer need to have a home inspection?

This same law also states that the buyer still has an obligation to have the property inspected.  Buyers cannot rely solely on the Property Condition Disclosure Statement.  The reason is that the Seller only has to disclose what they have knowledge of.  Is it possible to have problems with a house and the Seller have no knowledge of it?  Absolutely!!  If you don’t believe that, have a Home Inspector come to your home today and my guess is, you will receive a few pages of defects you had no idea existed.  So buyers certainly need the inspection and the disclosure statement to make an informed decision.

It is my opinion that Sellers also need a home inspection prior to putting the home on the market.  A pre home inspection can alleviate potential problems when the home is under contract.  I will share one example with you.  A buyer, which was in the military, has the home inspected after entering into a contract of sale.  The inspection found termite damage and active termites in the property.  Although the seller has a termite bond and could have the damage fixed, the buyer was a few days away from deployment and could not wait on the damage to be fixed and then close.  Therefore, the buyer terminated the contract due to the unsatisfactory inspection.  If the Seller would have had a pre home inspection, they would have found the damage and could have fixed the problem before the buyer found it.  Instead of going to closing, this seller had to put the home back on the market.

Make sure you use a licensed Home Inspector with the experience needed to conduct a competent inspection.  One such inspector is David Dubose, owner of Dubose Home Inspections and President of the SC Home Inspectors Association.  David is also a licensed Instructor and teaches the Home Inspection Course. 

If you are interested in getting your South Carolina Real Estate License, we would love to have you attend our Real Estate School For Success.  We will train you to not only pass the state exam, but also teach you how to build a lucrative career in the Real Estate Industry.  We also offer many other licensing courses such as Property Manager, Appraiser, Home Inspector, etc.  The Real Estate School For Success is an approved MyCAA provider, which allows for many military spouses to take all classes at no charge.  Give us a call for details.  You can also receive a 10% discount on any class by entering the promo code below when you register on line at the Real Estate School for Success.

Discount/Promo Code is:  Inspection

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If South Carolina Property Taxes are among the lowest in the country, then why do so many property owners complain about their tax bill?  There is no one answer to that question, but my guest on Success in Real Estate will answer that very question.  My guest is Todd Feaster, Real Estate Appraiser and former employee of the Lexington County Tax Assessor’s Office.

There are two primary assessment rates in South Carolina for residential property.  For owner occupied homes, the assessment rate is 4% and all other properties owned will be assessed at the 6% rate.  Taxes calculations are based on Assessed Value, not Appraised Value.  However, you must know the Appraised Value to determine the Assessed Value.  So the first question is, what is the appraised value of your home?

As of 2006, South Carolina passed a new tax law called Point of Sale.  This law requires the Appraised Value to be set based on the purchase price of the home.  Assuming the purchase was a “arms length” transaction, your Appraised Value will be whatever you paid for the home.  If you purchased the home for less than market value, the Assessor’s office will adjust the “Sales Price” from what you actually paid, to the current market value.  This causes many property owners irritation.  They know what they actually paid, but when they look up the tax record, it indicates you paid a higher price than you actually paid.  The formula used to compute property taxes is as follows:

$200,000         Purchase Prices (Market Value)

X 4%               Assessed Value if you live in the home

$8,000             Assessed Value

X .279             Average millage rate in SC (Yours will vary some)

$2,232             Annual Taxes

There are many exemptions to South Carolina Property Taxes and we do discuss many of them on this show.  We also discuss how to properly and successfully appeal property taxes if you feel they are too high.

If you are interested in getting your South Carolina Real Estate License, we would love to have you attend our Real Estate School For Success.  We will train you to not only pass the state exam, but also teach you how to build a lucrative career in the Real Estate Industry.  We also offer many other licensing courses such as Property Manager, Appraiser, Home Inspector, etc.  The Real Estate School For Success is an approved MyCAA provider, which allows for many military spouses to take all classes at no charge.  Give us a call for details.  You can also receive a 10% discount on any class by entering the promo code below when you register on line at the Real Estate School for Success.

Discount/Promo Code is:  Taxes

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For three years or so, there were more real estate agents quitting and getting another job than new agents coming into the real estate industry in South Carolina.  Real Estate was a tuff way to make a living for most agents.  Those that stayed in saw the number of transactions go way down along with their income.  Looking back, as tough as it was, could this have been a blessing in disguise? 

As a Real Estate Instructor in South Carolina, I have the pleasure of traveling all over the state teaching and speaking to real estate agents.  Just last week, I was in Charleston speaking to a group of agents and as always, I asked how business was going in Charleston?  Everyone in the room said it is awesome.  They are all very busy with the number one comment I heard was “buyers are coming out of the woodwork right now.”  Charleston is not alone.  I have been hearing that same comment every where I go.  This year has been a come back year for sure so I was not surprised to hear those comments, but I was surprised to hear them this time of the year.  Traditionally, the fourth quarter is a very slow time of the year in real estate.  Very few transaction during this time for many reasons normally, but not this year.  Typically, the number of transaction drop off significantly during the winter, but pick up again in the early spring and all through the summer.  Agents tell me that the number of transactions are actually increasing right now and that they have never been more busy!

The tough few years have weeded out most of the agents that were not very serious about their careers.  In fact, so many agents gave up their license and went back into the work force, many multi-office companies around South Carolina had to close several offices and consolidate. The tough times also taught real estate agents the necessity to budget carefully and stick to it.  The agents that stuck to their business plans and budget have learned to be very disciplined which are now paying big dividends.  I thought I would never say this, but today, we actually have a shortage of real estate agents in many areas around the state.  With the substantial increase in business (Buyers and Sellers), many agents actually have more than they can manage properly.  The hardest thing to do right now is to turn down business but someone has to do it.

Real Estate is obviously on its way back and in a big way!!  My guest on Success In Real Estate this past week was Erica West, Mortgage Consultant with New American Mortgage.  Erica backs up the comments we are hearing from real estate agents by saying the number of home loans she is processing right now are unbelievable.  She is seeing huge increases in new home loans as well as current homeowners re-financing because the interest rates are still going down!  Today, home buyers can get a 30 year fixed loan around 3.5 %.  If you are thinking of buying or refinancing, you must give Erica West a call and talk to her.  Erica and New American Mortgage will guarantee a clear to close in seven (7) days or less!!  Most lenders are taking 4 to 6 weeks.  This is incredible.  Give Erica West a call at 803-528-5019.

If you are interested in getting your South Carolina Real Estate License, we would love to have attend our Real Estate School For Success.  We will train you to not only pass the state exam, but also teach you how to build a lucrative career in the Real Estate Industry.  We also offer many other licensing courses such as Property Manager, Appraiser, Home Inspector, etc.  The Real Estate School For Success is an approved MyCAA provider, which allows for many military spouses to take all classes at no charge.  Give us a call for details.  You can also receive a 10% discount on any class by entering the promo code below when you register on line at the Real Estate School for Success.

Discount/Promo Code is:  Mortgage

  CLICK HERE TO LISTEN TO SHOW.

In January 2003, South Carolina pasted the SC Residential Property Condition Disclosure Law.  This law now requires anyone selling a residential home with one to four dwelling units, must provide potential home buyers with the Property Condition Disclosure Statement.  In essence, the seller must disclose any problems (malfunctions or defects) in which the seller has knowledge of.

   Click here to listen to the show.

How much down payment must a buyer have to purchase a home today?  Obviously, that will vary depending on several factors.  However, there is a program available to purchase a home requiring only $100 for a down payment!  HUD has several programs that Real Estate Agents and Home Buyers need to be familiar with.  My guests on Success in Real Estate this week, Larry Jordan, owner of Palmetto Real Estate Group and two of his agents, Tharry and Theresa Sally, explain how some of these programs can work for you.  If you have any questions, give them a call at 803-939-8562.

The $100 down payment program is a FHA product which requires:

            * The property must be owner occupied

            * The client must offer full list price

            * You must utilize FHA insured financing

* Borrower must not have purchased a HUD REO property within the last 24        months

There is also a Good Neighbor Next Door Program which allows the buyer to purchase the home for only 50% of the homes value.  For example, you buy a HUD home for $100,000, you will have two mortgages, each for $50,000.  You only make payments for one mortgage for $50,000 and once you have lived in the home for three years, the other $50,000 mortgage will go away, NO PAYMENTS!  You just bought a $100,000 home for only $50,000.  Requirements of this program include:

·        Eligible Participants: Teachers, Law Enforcement, Firefighters, and EMT

·        Available Financing: FHA, VA, or Conventional

·        Qualifies for the $100 down payment program if you utilize FHA insured financing

·        HUD requires a silent second mortgage for the discount amount (50%) – no interest payments required

·        You must live in the home as your sole residence for a full 36 months

·        Must put one percent of the list price as earnest money, but no less than $500 and no more than $2,000.  Once you close, you can get the earnest money back, less the $100 down payment, or apply earnest money towards the loan amount

If you purchase a HUD home in need of repairs, HUD will provide the funds to make repairs.  The repairs listed on the appraisal cannot exceed $5,000 and the buyer can establish a cash escrow or they are permitted to include in their mortgage an amount equal to 100% of the estimated cost of the repairs.

If you are interested in getting your South Carolina Real Estate License, we would love to have attend our Real Estate School For Success.  We will train you to not only pass the state exam, but also teach you how to build a lucrative career in the Real Estate Industry.  We also offer many other licensing courses such as Property Manager, Appraiser, Home Inspector, etc.  The Real Estate School For Success is an approved MyCAA provider, which allows for many military spouses to take all classes at no charge.  Give us a call for details.  You can also receive a 10% discount on any class by entering the promo code below when you register on line at the Real Estate School for Success.

Discount/Promo Code is:  HUD