Renewal Reminder Postcards In Mail - NCREC

fter listing a property for sale,you receive an offer from aprospective buyer. Then, before you’reable to present the offer to your sellerclient, a second and third offer arrivewith all of the buyers and their agentsimpatiently waiting foranswers.While handlingmultiple offers requiresmore diplomacy thanhandling a single offer,from a business standpoint there is really little room for complainthere. You have an attractive listing, whichhas a good chance ofselling quickly, andyour marketing effortsare paying off, which should please theseller.However, there is plenty of room forproblems if you don’t handle the intensedemand for your listing with diligenceand fairness to all – your seller-clientand the prospective purchasers.Here are some guidelines to hang onyour wall and refer to when multiple offers come your way:– Effective July 1, a new Commission ruleprohibits shopping offers unless permitted by the offering party, typically,the buyer. All buyers must be treatedfairly, honestly and equally. Disclosing terms of an offer to other buyersgives those receiving the informationan unfair advantage over the buyerwhose competing offer is disclosed.Thus, it is not in the interest of mostbuyers to allow disclosure of their offers.– Abiding by those three words will serve youwell and help keep you in compliancewith Real Estate Commission rules. Youmust present each offer immediatelyor as soon as you are able. Every offermust be presented to the seller withinfive days of execution. Presenting an offer means delivering the offer or transmitting a copy of it to the seller. Simplyspeaking with the seller by telephoneabout an offer is not sufficient to satisfythe delivery requirement in the Commission’s rules.– There is no contract until all parties agree to its written terms,sign their names to express that agreement and communicate acceptance to theoffering party. Untilthen, you have nothing more than a stackof offers – not a stackof contracts - any oneof which could appealto your seller-client.Do not advise a buyeror buyer agent thatthe seller has acceptedthe buyer’s offer untilthe seller has signedthe offer. A seller who orally expressesa willingness to accept an offer has notyet accepted the offer and has no legalobligation to do so. Thus, no contracthas been formed. Do not change theMLS status of a property to “under contract” until a contract has been formedas this would be a misrepresentation ofa material fact and a disservice to yourseller-client.–Some clients are more knowledgeableabout real estate matters than others.Make the appropriate assessment withyour client of all offers, explaining, ifneed be, the differences in the variousterms and conditions, how they wouldaffect the sale of the property and thesteps necessary to form a contract.How to HandleM u l t i p l e O ffe r sNew Rule Effective July 1A new rule - A.0115 Disclosureof Offers Prohibited – takes effectJuly 1:The rule prohibits you from disclosing the price or other materialterms in a party’s offer to purchase,sell, lease, rent, or to option realproperty to a competing party without the express authority of the offering party.Offer to Purchase is not a considerationin assigning any priority to one offerover another. Until an offer is acceptedby your seller-client, all offers must betreated equally and presented. Whenone is accepted, your client may be willing to negotiate another as a “backup”.Of course, this would require agreementby the second buyer and would requirespecial language indicating that thebackup contract has no legal standingunless and until the primary contract isterminated, such as the language contained in the NC REALTORS ’ BackupContract Addendum.To fully enjoy the time when multiple offers stream in for one of your listings, heed the advice above and take thetime to manage the selling process fairlyand efficiently for all concerned.– Inform allbuyers or buyer agents that you havereceived multiple offers. If your sellerclient does not find any offer acceptable, communicate equally with all prospective purchasers either through theiragents or directly depending upon yourrelationship. Advise all who have madean offer that they may submit their bestoffer, if they choose to do so, or standby their original offer. With the seller’spermission, you may outline any termsthe seller would consider.– The timing of receipt by you of anReal Estate Bulletin May 20085

discussion of “material facts”and of the Commission’s position as to certain key “facts” that mustbe disclosed will be the primary topic ofthe 2008-2009 Update Course.Additionally, you will review someof the new NCAR form changes (particularly those affecting the Offer toPurchase) and discuss due diligence indiscovering information about a property.You must complete the four-hourUpdate Course and a four-hour electiveto fulfill your continuing education requirements for the license year.For dates and locations, click onContinuing Education on the Commission’s website, www.ncrec.state.nc.us, andthen click on “CE Courses Schedule”.Other topics to be covered in thecourse include: Review of new Commission ruleseffective July 1, 2008 (See page 5of this Real Estate Bulletin for thearticle on “How to Handle MultipleOffers” and reference to the newrule effective July 1 concerning“Shopping Offers”); How to maintain a current andactive license; Explanation of the term “broker-incharge eligible”.FREE PUBLICATIONSQuantityRequestedQuestions and Answers on:Fair HousingCondos and TownhousesResidential Subdivisions and Planned CommunitiesPurchasing Coastal Real Estate in North CarolinaRenting Residential Real EstateSelect the publication icon onthe home page. Complete theonline form.Mail to:NC Real Estate CommissionATTN: PublicationsP. O. Box 17100Raleigh, NC 27619-7100Trato Con Agentes de Bienes Raíces(Working With Real Estate Agents)Preguntas y Respuestas sobre:(Questions and Answers On:)Vivienda Justa(Fair Housing)Fax1-919-877-4227El Depósito de Seguridad del Inquilino(Tenant Security Deposits)This formfor freepublicationsonly.Alquiler de Inmuebles para Viviendo(Renting Residential Real Estate)Real Estate Licensing in North Carolina(Contains license application)Residential Property Disclosure Statement(Please limit request to one copy; duplicate as needed.Also available on the Commission’s web site.)NAMEADDRESSCITY/STATE/ZIPEmailPlease allow 7 days from receipt of order for delivery.6Mail, fax or email this form tothe Real Estate Commission.Online:www.ncrec.state.nc.usTenant Security DepositsTelephoneHow To Order:Real Estate Bulletin May 2008

he Broker-in-Charge Guide hasbeen updated to cover changesin rules relating to broker-in-charge eligibility, implementation of postlicensing education requirements affectinglicenses on provisional status and“teams” - informal or formal groupingsof agents.First published in 2004, the Guide isan essential reference text for the management of a North Carolina real estatebrokerage office and is the textbook forthe Broker-in-Charge Course."ROKER IN #HARGE 'UIDE! REFERENCE PUBLICATION OF THE .ORTH #AROLINA 2EAL %STATE #OMMISSIONFOR "ROKERS IN #HARGE OF REAL ESTATE OFlCES It includes an updated Broker-inCharge Declaration Form 2.04 and Activation Form 2.08 plus selected provisions of the Real Estate License Lawand Commission rules and general statutes pertaining to professional entitiesand business under assumed names.The 176-page volume is availablefor purchase for 10 on the Commission’s website, www.ncrec.state.nc.us,or with printed order forms availableon the website as well as in every issue of the Real Estate Bulletin.PURCHASE PUBLICATIONSPublicationQuantityRequestedTotalsHow To Order:Mail, fax or email this form withmethod of payment indicated check or credit card (MasterCardor Visa). Please do not remitcash.Residential Square Footage Guidelines Working With Real Estate Agents Questions and Answers on:Home Inspections Online:www.ncrec.state.nc.usEarnest Money Deposits Real Estate Closings Select the publication icon on thehome page. Follow the instructions for ordering with your MasterCard or Visa credit card.Offer and Acceptance Owning Vacation Rental Property 1-866-867-3746Broker-in-Charge Guide Mail to:North Carolina Real Estate LicenseLaw and Commission Rules Real Estate Agent Safety Guide Amount Enclosed ( .65 per copy)( .25 per copy)( .25 per copy)( .25 per copy)( .25 per copy)( .25 per copy)( .25 per copy)( 10 per copy)Fax:Commission PublicationsP. O. Box 28151Raleigh, NC 27611( 3.00 per copy)( .25 per copy)This form E/ZIPTelephoneEmailMasterCardVisaCredit card orders must be a minimum of 1.00.Expiration DateSignature:Please allow 7 days from receipt of payment for delivery.Real Estate Bulletin May 20087

is displayed in the Commission’s lobby.Commission members Marsha Jordanand S. R. “Buddy” Rudd, Jr. were alsoin attendance for the presentation.Following the luncheon, participants were delighted to hear from theCommission’s Legal Education Officer,Tricia Moylan, who reviewed the finerpoints of Agency with the group. Thefirst day’s program concluded with two“break-out” sessions each tailored for adifferent audience.On the second day, Scott Iden ofCountrywide Mortgage explained thehistory of the “mortgage industry meltdown” and discussed current lendingtrends, after which the Commission’sChief Deputy Legal Counsel, JanetThoren gave an informative presentation on Mortgage Fraud, including adiscussion of the new North CarolinaMortgage Fraud Act. The conference finale was a presentation by Miriam Baer,Legal Counsel and Assistant Director ofLegal Services, who covered such topics as inspection options and due diligence with the standard residential salescontract form, “shopping” offers, andmaterial facts. The day concluded withan Open Forum in which participantshad a brief opportunity to ask questionsof the Commission’s legal experts: Ms.Baer, Ms. Moylan, and Ms. Thoren.The Commission thanks NorthCarolina’s real estate educators for theircontinued support, and congratulatesLois Branning and Payton Warren fortheir achievements.n enthusiastic crowd of justAgent Should Know, and its “Educatorover 250 instructors, school ofof the Year” award to Lois Branning officials, authors and publisher represenRowan-Cabarrus Community College.tatives attended the 2008 Real EstateAlso during the luncheon, CommisEducators Conference held in Raleighsion Chairperson Melvin “Skip” Alstonon April 14-15, 2008.This year’s number ofparticipants breaks allprevious attendance records for the Commission-sponsored event.Highlights of thefirst day’s program included a presentationby instructor TonyHawkins of DurhamTechnical CommunityCollege on Creating anEffective Adult Learning Environment, anda discussion of thecriminal record report Commission Chairman Melvin L. “Skip” Alston presents the Billierequirement, includ- J. Mercer Excellence in Education Award to Lois Branning.ing suggestions for obtaining the report in a timely fashion,presented the Commission’s Billie J.by Ann Lane of Carolina InvestigativeMercer Excellence in Education AwardResearch, Inc.to NCREEA’s Educator of the Year, Lois“Update” sessions on prelicensingBranning. This award is presented aneducation, postlicensing education,nually in memory of former Commisand continuing education were consion member and chairperson, Billieducted by Lisa McQuillen, EducationMercer, who was especially dedicated to& Licensing Officer, and Pamela Rorie,the cause of real estate education. TheContinuing Education Officer. Thesename of each year’s award winner is ensessions addressed matters of particulargraved on the Mercer Award cup thatinterest and importance to instructors,such as revisions to education rules,overall school and instructor performance, and current trends in real estateeducation and licensing.During the first day’s luncheon, theNorth Carolina Real Estate EducatorsAssociation (NCREEA) held its springmeeting and traditional awards presentation under the capable direction ofPresident Roy Faron of J. Y. Monk RealEstate School. The Association presented its “Program of the Year” award toReal Estate Educators Conference attendance breaks all previous records.Payton Warren for his book, Insurancefor Consumer Protection: What Every8Real Estate Bulletin May 2008

BIC Reports LicenseeAs Deceased;Licensee Calls CommissionA80 Years of Service and ExperienceNine members of the Real Estate Commission staff received awards recently forlengths of service ranging from five to 20 years. Commission Chairman Melvin L. “Skip”Alston (back row, second from right) presented the awards to (front row, l. to r.) Auditor/Investigator M. Spier Holloman, five years; Information/Imaging Specialist Patricia L.Street, five years; Senior Licensing Specialist Wanda E. Johnson, 15 years; TechnologySpecialist Diana L. Carnes, five years; Assistant Director of Legal Services Miriam J.Baer, 20 years; (back row, l. to r.) Administrative Specialist LaToya S. Simms, five years;Executive Assistant Susan M. Tysor, 10 years; Auditor/Investigator Bart H. Allen, fiveyears; and Chief Deputy Legal Counsel Janet B. Thoren, 10 years.EApplicants for Licensure by ExaminationJanuary 2002 thru March 2008ApplicantsMonthly 020001000010,4939,758xamR esults7,5047,1645,775broker-in-charge dutifullyreported to the Commissionthat a licensee who had been associated with his firm was deceased.When the licensee called theCommission to inquire why his license record could not be locatedon the Internet, he was told it wasbecause according to informationreported to the Commission, hewas deceased! Needless to say,his records were immediately updated.The moral of the story is that accuracy is the best policy. Brokersin-charge, be certain the information you are reporting to the Commission is tions for Licensure by ExaminationThe chart shows the number of applications received by the Commission in eachcalendar year since 2002 and the average per month in each of those years. The monthlyaverage for the first three months of 2008 is below the average for 2007.Real Estate Bulletin May 20083413532842721800JanuaryFebruaryMarch9

2008-2009 EditionNORTH CAROLINA REAL ESTATE MANUALThe North Carolina Real Estate Manual, published by the Real Estate Commission, is a comprehensive referenceaddressing real estate law and brokerage practice, North Carolina Real Estate License Law and Commission rules. Itserves as the authorized textbook for the real estate broker postlicensing courses and is highly recommended for licensees, attorneys, instructors and anyone else engaged or interested in real estate law and brokerage practice.HOW TO ORDER:ONLINEGo to the Commission’s website, www.ncrec.state.nc.us, select “Publications/Bulletin” andclick on NC Real Estate Manual to link directly with the book distributor. Follow the instructions for ordering using your MasterCard or Visa credit card.NORTH CAROLINAREAL ESTATE MANUAL2008-2009 EditionPatrick K. HetrickLarry A. OutlawBY MAIL OR FAXMail or fax an order form with payment. For credit card payments, only MasterCardand Visa are accepted. For checks, please send only cashier’s or certified check or moneyorder, payable to: North Carolina Real Estate Manual. (The Manual sales price is 34.95plus sales tax and shipping.)Patricia A. MoylanPublished By The North Carolina Real Estate CommissionMAILING ADDRESS:North Carolina Real Estate ManualP. O. BOX 28151RALEIGH, NC 27611FAX:1-866-867-3746CUSTOMER r FormNORTH CAROLINA REAL ESTATE MANUALNAMEADDRESSStreet (NOT P.O. BOX)CITY/STATE/ZIPTelephoneEmailSingle Manual @ 44.00* (incl. Tax, Shipping) 44.00Additional Manuals @ 39.00* each (incl. Tax, Shipping) X QuantityTOTALMasterCard VisaExp DateSignature:*Manual sales price is 34.95 plus 2.45 sales tax plus shipping. Please allow 7 days from receipt of payment for delivery.10Real Estate Bulletin May 2008

AUDITOR'S CORNER./24( #!2/,).! 2%!, %34!4% #/--)33)/.3)/.//. Examining Your Bookkeeper’s Trust Account Trial BalanceBy Emmet R. Wood, Director, Audits and InvestigationsPart of the trust account records reconciliation is to prepare a trial balance of funds on deposit in the trustaccount. What is a trial balance? It is simply a list of all funds in the trust or escrow account and theidentification of the owners of those funds. The trial balance must identify each ledger and show the ledgerbalances as of the date of the trial balance.What are some of the things that a Broker-in-Charge should check on a trial balance? Let say you receivethe following trial balance from your bookkeeper:Your Realty Company, Inc.Trial Balance as of May 31, 200XPropertyOwnerYour Realty Company FundsAmount 500.001362 Main StreetClay 2,500.00143 North BoulevardHoward2500 Johnson StreetWard 1,000.001601 Queen StreetWalker- 500.00Total 3,000.00 500.00The Broker-in-Charge should be:(1)Checking the mathYou will note that the total of the ledger balances is 4,000 not 3,000.A bookkeeper whose trust account books are out of balance mayvery well try and hide being out of balance with a math error.(2)Comparing the total of the trial The total of the trial balance ( 4,000) should agree with the recbalance to the reconciled bank onciled bank balance as of the same date shown on the bankbalance.reconciliation. If the reconciled bank balance is 3,000 there maybe a shortage in the trust account.(3)Looking to see if there is a line If some company funds are deposited into the trust account, thereitem for personal funds.should be a line item on the trial balance for the company funds.In this example, your will note that there are 500 in companyfunds on deposit in the trust account. This, of course, wouldmost likely be a violation of the Rules because you are only allowed to deposit and maintain 100 in personal funds or suchother amount as may be required to cover bank charges.(4)Looking for negative balances on Negative balances may be an indication of a shortage. Rememthe trial balanceber that disbursements on

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