Do your homework before buying a rental

Rent it Right

BY JANET PORTMAN, THURSDAY, DECEMBER 20, 2012.

Inman News®

House under scrutiny 

image via Shutterstock.

Q: We bought a single-family home to use as investment property. The sellers told us that the neighborhood, near a major university, is very popular with students because the rents are reasonable. We went ahead and closed the deal. Now we've discovered that in fact very few students live here (apparently the rents are prohibitive). This has made it very hard to find qualified tenants. Do we have any recourse against the sellers? --Stephen and Catherine

A: When your seller answered your questions about student renters and their ability to afford neighborhood rents, he was making a "representation," in legal lingo. A representation is a statement that is offered as the truth, sometimes couched in "to the best of my knowledge ..."

When a party to a contract makes a representation, it's a big deal -- if it's false or misleading, about a material (important) aspect of the deal, and the other side reasonably relies on it to their detriment, the "representer" is in for some legal trouble.

For example, telling a buyer that there's no problem with the neighbors next door, when in fact the neighbors account for continuous police visits, is a major misrepresentation that, if uncovered, would likely affect the buyer's decision to proceed.

Realtor dues help protect your business

Associations play active role in local, state and national legislation

BY BERNICE ROSS, MONDAY, DECEMBER 10, 2012.

Inman News®

"Realtor Party" logo from the National Association of Realtors' website, realtoractioncenter.com.

It's almost January and time to pony up and pay your dues to your local, state and national Realtor associations. In case you're not aware of the value the various associations to which you belong provide, keep reading. You may be very surprised.

It seems as if the majority of agents, brokers and associations are struggling with how to demonstrate their value. In the past, Realtors were the gatekeepers of the multiple listing service and created their value by the information they could provide consumers. The associations are also the keeper of the ethics of how the industry conducts itself as well being a primary source for providing education.

One function that very few agents pay attention to is the role that associations play in interacting with the politicians who can make or break our businesses. To illustrate this point, I recently attended a legislative review session sponsored by the Austin Young Professionals Network.

Six more headed to prison for roles in Miami condo mortgage fraud scheme

Father and son real estate brokers among those sentenced after guilty pleas

BY INMAN NEWS, MONDAY, DECEMBER 10, 2012.

Inman News®

The Jade at Brickell Bay. Photo credit: Marc Averette/Wikimedia Commons

A father and son who worked as real estate brokers are among a half-dozen defendants who have been sentenced to prison in recent weeks for their participation in a multi-million dollar mortgage fraud scheme at a luxury apartment complex on Miami's Brickell Bay Drive.

Prosecutors said the defendants used straw buyers to purchase residential properties at The Jade apartment complex, submitting mortgage loan applications and supporting documents containing false information to fraudulently obtain more than $5.6 million in mortgage proceeds from lenders.

The defendants submitted false HUD-1 statements to lenders, and created a second version of the HUD-1 statements listing the actual sales prices that they provided to the seller, prosecutors said. To keep the scheme going, the defendants made some mortgage and condominium association payments and collected rental income for the units. The mortgage fraud proceeds were diverted into shell companies for the defendants' personal use, prosecutors said.

After pleading guilty to conspiracy to commit mail fraud in September, real estate broker Andres Mendez Sr., 47, on Nov. 28 was sentenced to 5 years in prison by U.S. District Judge Donald M. Middlebrooks. Mendez's son, Andy Mendez Jr., entered a similar plea and was sentenced to a year and a day in prison, 18 months of home confinement and five years of supervised release. Both were ordered to pay restitution of $4.23 million.

Real estate attorney Lilia Casal-Diaz, 42, who pled guilty in October to conspiracy to commit tax fraud, was sentenced on Dec. 7 to to a year and day in prison, along with one year of home confinement and three years supervised release, and ordered to pay $509,543 in restitution to the IRS.

Prosecutors said Casal-Diaz, who practiced law in Coral Gables, falsified HUD-1 documents and failed to report on IRS Form 1099-S the sales proceeds from the transactions, or intentionally under-reported proceeds. When approached by IRS investigators, Casal-Diaz provided the agents with a phony Form 1099-S document, claiming proceeds from one of the real estate closings was properly reported to the IRS.

Top 5 selling points sellers fail to mention

Mood of the Market

BY TARA-NICHOLLE NELSON, MONDAY, DECEMBER 10, 2012.

Inman News®

Walk-in closet image via Shutterstock.

Anyone who has house hunted in the Internet age has at least one or two memorable examples of homes they felt were falsely advertised.

Rooms that were Photoshopped to luxurious (if deceptive) spaciousness.

Neighborhoods described as "up-and-coming" that should have been deemed "down-and-out."

Conveniently omitted factoids like the roof is caving in on one side.

These are extreme examples of the listing tomfoolery about which so many buyers complain.

But as I see it, these examples are exceptional precisely because they are exceptions to the norm. Thousands and thousands of other listings come on the market every year, making every effort to place the property in its best light while also representing it accurately.

In fact, I've actually noticed that much more common than the listings that contain exaggerations or flat-out falsehoods are those in which the property is undersold. These are the homes that buyers see online for a few weeks, and rule out for one reason or another, then get sweet-talked into seeing in person by their agent only to realize how completely fantastic the place is!

StreetAdvisor signs up 2 Re/Max affiliates

Brokerages are latest to integrate neighborhood reviews into their own websites

BY INMAN NEWS, MONDAY, DECEMBER 10, 2012.

Inman News®

Two large Re/Max franchises -- including the largest Re/Max franchise in the world, Denver area-based Re/Max Alliance -- are the latest brokerages to brand neighborhood info site StreetAdvisor's local reviews and highlight their agents as prominent local experts via the site.

By licensing its social-engineered review platform, brokerages can integrate StreetAdvisor's consumer neighborhood reviews and local "expert" Q&As. create a page highlighting their agents as neighborhood experts and promote their reviews, and display StreetAdvisor content fenced to their location and to their agents, said StreetAdvisor co-founder Adam Spencer.

StreetAdvisor launched its "Pro" white-label product in November, with New York-based Houlihan Lawrence and Cincinnati-based Comey and Shepherd Realtors as its first customers.

Get the upper hand on clutter

Realtor Notebook

BY TERESA BOARDMAN, THURSDAY, DECEMBER 6, 2012.

Inman News®

Photo of a Tokyo family's possessions from "Material World: A Global Family Portrait" Sierra Club Books.

I have spent a lot of time in the past year getting rid of stuff. By stuff, I mean things that I bought or was given that I no longer use, or never used at all.

There is a lot less stuff in my home now than there was at the beginning of the year. The less I have, the more convinced I become that having less is better.

Most people have clothes that they have outgrown, knickknacks that they hate, and items that they bought for the kitchen that just didn't work out. Friends and relatives give us gifts that we don't know what to do with. But we can't bring ourselves to get rid of them, and over the years it accumulates. We own things that we have forgotten about.

Connecticut real estate broker, trainer and Inman Real Estate Connect ambassador Linda Davis started a group on Facebook for people who want to de-clutter. As a Realtor, Linda worked with people who have to deal with a lot of stuff when they move. The experience started her on a journey to get rid of clutter.

Davis encourages people to remove a little clutter from their lives each day. Hundreds have joined her group, actively participating and encouraging each other to keep going. The group has changed lives. Each day Linda photographs something that she got rid of, and asks us what WE got rid of. Just one thing at a time makes the process less overwhelming.

Trulia adds 3-D map view in upgraded Android apps

Crime, school and other information now available

BY INMAN NEWS, FRIDAY, DECEMBER 7, 2012.

Inman News®

Crime heat map view in Trulia's updated Android apps

Real estate marketplace Trulia's free Android phone and tablet apps now offer 3-D Google Maps display and integrate neighborhood information like crime data, school information and nearby amenities in map view.
With the update, Trulia Android app users will be able to see crime data via heat maps, school attendance boundary zones, and other information like nearby restaurants for the first time, said Steven Yarger, director of mobile at Trulia.
The upgrade, which utilizes, and coincides with, a Google Maps software platform update, will allow users to toggle between standard, angled and "satellite" map views in the apps and between 2-D and 3-D.
The 3-D map views, Yarger said, are similar to those seen in Google Earth (a 3-D map system from Google), and can be rotated by users using their fingers. The update also allows users to access indoor maps of locations like shopping malls, where they exist, he said.

Angled map view showing homes for sale in Trulia's updated mobile apps.
Users of Trulia's iPad app, Yarger noted, already had access to some of these features like neighborhood data, but the 3-D feature is new to all Trulia apps and exclusively for Android as of now.

The new Android apps also integrate tools from Trulia's mortgage center, which allow users to see mortgage rates from a variety of lenders via a link directly from a property view in the apps. IPad and iPhone users can access the tools, too, but they're in stand-alone apps, not integrated into the main Trulia app, Yarger said.
In May, Trulia debuted a mobile ads program that allows five agents per ZIP code to advertise on the map views of the company's mobile apps.
Trulia currently has 12 mobile apps that cover general real estate (6), rentals (4), agent needs (2), and consumer mortgage tools (2).

Housing recovery hinges on mortgage supply

Commentary: Outstanding mortgages now below $10 trillion for first time since 2005

BY LOU BARNES, FRIDAY, DECEMBER 7, 2012.

Inman News®

Mortgaged home image via Shutterstock.

Markets are very quiet despite the usual first-week-of-month flood of new data. In the last week the 10-year T-note has not traded above 1.63 percent nor below 1.58 percent, and mortgages are holding just below 3.5 percent depending on borrower and property.

The November payroll survey estimate arrived with a 146,000-job gain. That's better than forecast but garbled by Sandy, and we cannot know whether up or down. The unemployment rate fell to 7.7 percent, but may have been more distorted by Sandy than payrolls: The percent of unemployed fell because the surveyed workforce shrank.

"I'm calling from the Bureau of Labor Statistics. If you are not at work, do you still have a job but just can't get to it? Have you quit looking for work because you're demoralized, or because a tree fell on your car? Hello? Hello? You're too cold to talk? You don't seem to understand how important this call is to the nation. Hello? Is your phone out? Yes, I know that if it were we wouldn't be talking. No need to be insulting."

Don't let expertise cost you listings

Conflict resolution in real estate

BY BERNICE ROSS, THURSDAY, DECEMBER 6, 2012.

Inman News®

Lecturing mom image via Shutterstock.

Editor's note: This is the second of a two-part series. Read Part 1.

Eric Berne's "The Games People Play" has powerful implications for how you conduct your real estate business, especially when it comes to the issue of resolving conflict. The question is, "Which games are you playing?"

Berne identified three different styles in which you can approach a "transaction" (i.e., a communication between two different people.) The three different approaches are "Adult," "Parent" and "Child."

Challenges are most easily resolved when both parties in the communication/negotiation approach it from an "Adult-Adult" approach. Part 1 identified what happens when the seller elects to respond to an "Adult" communication from his agent with a "Child" response. The example below illustrates what happens when the Agent acts as the "Adult" and the client acts as the "Parent."

Sally Agent: "John, properties with amenities similar to yours in this area have closed and qualified for a loan at $124 to $158 per square foot. The properties that have closed for more than $150 per square foot were all built in the last five years. Properties built 15 years ago have been selling for $135 to $145 per square foot."