What Realtors ® Need To Know

Steve Byrd, Carolina Multiple Listing Services, Inc. (CMLS) H. Frazier Wallace II, Esq., Doyle & Wallace, PLLC Stephanie Gossett, Lake Norman Realty, Inc. Dana Rhodes, DREI, instructor, Mingle School of Real Estate Debbie Wey, CMLS

2,328 listings 671 agents 1,460 listings by 87 agents with five or more listings 868 listings by 584 agents with fewer than five listings 486 listed under residential and rental 382 listed under rentals only

Difference between a Lease/Purchase and:  a lease agreement with an option to purchase  traditional mortgage  seller financing  buyer possession before closing agreement

 When should I call a lawyer?  When should the buyer do inspections?  What needs to be in the agreement?

Purchase The tenant is obligated to purchase the property at the end of the term based on the terms of the Offer to Purchase and Agreement that is entered into contemporaneously with the Lease/Purchase, and attached as Exhibit A and incorporated into the Lease/Purchase.

Non-Refundable Fee How much needs to be paid to the seller for taking the property off the market for the length of the term? This payment is non-refundable, and if agreed to, can be credited at closing.

Rent How much is the rent per month, and what, if any, of that monthly rent shall be credited against the purchase price at closing? Commissions How do I as the agent get paid for bringing this deal together?

Obligations during the term of the lease for  Tenant  Landlord Default  If the tenant does not perform under the terms of the lease?  If the landlord does not perform under the terms of the lease?

 Personal property of landlord left in/on the property during the term of the lease  Eminent Domain and Casualties: What happens if the house is struck by lightning and burns to the ground?  Landlord’s insurance requirements  Tenant’s insurance requirements  Landlord bankruptcy: What happens if the landlord files for bankruptcy?  What happens if the landlord is foreclosed upon?

o Compensation o Real estate brokerage o For others

o Lists or offers to list o Sells or offers to sell o Buys or offers to buy o Auctions or offers to auction

o Leases or offers to lease o Sells or offers to sell leases o Rents or offers to rent

o Every agreement o Brokerage services o Shall be in writing o Signed by parties

o Every agreement o Brokerage services o Between broker and owner o Writing from time of formation

Fair housing language must be included.

o Brochure o Sales transactions

o Parties identified o Consideration spelled out o Legally competent parties o Performance of legal acts o Be specific

o Parties identified o Land must be identified o All material terms set forth

o Rent – intangible right o Appurtenant to land o Needs to be addressed

o Tenant security deposits o Deposited in trust or escrow account o PB must deliver immediately to BIC

o Chapter 42, Article 6 o “Tenant Security Deposit Act” o Outlines three major areas of security deposits

o Security deposit based on term of lease o Rental income and tenant security deposits o Trust account

o Outlined in Article 6 o Tenant’s money – not owner’s

o Trust account location o Notify tenant o Accounting letter 30 days/60 days o Abandoned property/deposits

o Standards of practice o Competence

o Residential Rental Agreements Act o Act prohibiting retaliatory eviction o Tenant Security Deposit Act o Act prohibiting self-help eviction o Unfair and Deceptive Trade Practices Act

o Pet fee o Eviction procedure o Tenant’s personal property o Service Members Civil Relief Act o Rental insurance

o Remedies for returned check o Method of eviction for violation of lease o Sexual harassment o Forfeiture of real property o Contracts requiring writing

o Damage to property o Summary Ejectment o Victims of domestic violence, sexual assault or stalking

o Mortgages and deeds of trust o Escheats and abandoned property o Persons with disabilities o Damage to property

o Cash o Conventional o Federal Housing Administration (FHA) o Farmers Home Administration (FMHA) o Lease purchase o Loan assumption o N.C. bond o Other o Owner financing o Personal loan o Trade/exchange o Veterans Administration (VA) Proposed Financing

o “Pending” (ignore the 60-day ) o Some agents include a statement in the “Remarks” explaining that the listing is a lease/purchase. o “Sold” when sale is final o TEMPO™ Advisory Group to consider a suggestion for a separate status for lease/purchase listings that are under contract

o Rental listings are optional o Written agency agreement required o A single-family or condo/townhouse property listed for sale or lease is permitted to have a second listing in the rental section of the MLS. o “Agreement to Procure Tenant” (Use w/ NCAR standard form 101)

o Member Participants and Subscribers must disclose in the listing if they are the owners of or have an ownership interest in the property submitted to the service. o Subscribers must sign an agency agreement with the listing brokerage when listing their own property in the MLS.

o There is no standard NCAR form for listing a residential rental only to find a renter, without also acting as a property manager. o Proceed with caution o Ask an attorney to draft an agency agreement. o Commercial form 572 “Exclusive Right to Lease Listing Agreement” is not designed for residential listings. o Listings cannot be full service, i.e., “Full Service=No”

o All listings must offer cooperative compensation. o Percentage of gross sales price o Set (or fixed) dollar amount o Cooperating brokerages have a right to know what their compensation shall be prior to their endeavor to sell/lease. o Cooperative compensation depends upon sale/lease.

o If not specified in the listing, any amount paid prior to the sale is a matter of mutual agreement. o Examples: o ½ of first month’s rent o ½ of cooperative compensation paid at inception of lease o Remainder paid at closing

o Set (or fixed) dollar amount o Percent of first month’s rent (common) o Other