Goodies

I get questions from my students, consumers, and the public about real estate issues. Some of them are state-specific, and some cross state lines. Here's a recent question, and my answer. The question came from my good friend and colleauge, Roseann Farrow, who teaches real estate in New York. Roseann had a student in her class who is licensed in both states and asked this question:

"Must a Pennsylvania licensee use a state-approved form for a buyer agency agreement?"
The answer is no; there are no 'state-approved' forms in Pennsylvania. However, about 90% of the licensees in Pennsylvania choose to use the standard forms developed by the Pennsylvania Association of REALTORS(R). This is because they are well constructed, follow the law, and if filled out properly, should be in compliance with state regulations. Regardless of which form a licensee chooses to use, in Pennsylvania, a broker is not entitled to a commission from a consumer unless the broker and consumer have entered into a written agreement which spells out the scope of work of the agreement and the fee to be paid. Also, in Pennsylvania, should a broker or agent choose to work on a non-exclusive basis with a consumer (either buyer or seller), they are required by law to furnish the consumer with a written memorandum of their agreement. For this reason, PAR has developed a "non-exclusive" buyer agency form.  The form which is required in all instances in Pennsylvania is the Consumer Notice, which must be furnished at the first meeting, before any "substantive" discussion occurs between the consumer and the licensee.

The same student asked another question, which Roseann shared with me:
"Can a listing agent deny me the right to represent my buyer? I have a buyer who wants to see a HUD house, but I've been told by the listing agent that I must be on the HUD roster and obtain a HUD lockbox key in order to show the house. Can the listing agent do that?"

This is actually more than one question. The agency question is, "Can a listing agent deny a buyer's agent the right to represent a buyer?" That answer is no, with some caveats. If no cooperation or compensation has been offered, the buyer can make the appointment with the listing agent and bring his agent along. His agent should not expect compensation from the listing agent; it would have to come from his client, the buyer. Depending upon the circumstances, the listing agent might insist on writing the contract; however the listing agent cannot block the buyer from getting advice from a buyer's agent concerning the offer: price, terms and conditions. The second question is about the terms of cooperation. Agents must follow lawful instructions from their clients. An example of a lawful instruction could be: "Don't show my house on Sunday." An unlawful instruction would be anything against the law, as in: "Don't show my house to any members of XYZ protected class." In the HUD case, HUD has given the instruction to the listing agent that only those agents registered with HUD who have obtained a HUD key are to be given cooperation. This is in line with a Standard of Practice, 3-9, added to the REALTOR(R) Code of Ethics in 2010, which reads:  

 

Books I've Read Recently

I just finished Last Call by Daniel Okrent. If you want a comprehensive look at Prohibition in the United States, this is the book for you. It is an entertaining read, and I learned things I didn't know before: suffrage for women, for example (the 19th Amendment) went hand in hand with Prohibition (the 18th Amendment) because the Dry Movement needed women's votes. Of course, no government intervention is without unintended consequences. The biggest one from Prohibitioin was it essentially gave birth to organized crime in teh United States. And, it was finished off by the government's need to tax liquor and beer in order to fund the programs in the 1930's.  Sidelines which are interesting include the origins of NASCAR being found in the Southern men who learned to drive fast to outrun the feds. The amount of indifference by some officials towards enforcement of prohibition, coupled with the graft and corruption of many in law enforcement, doomed this law from the beginning. Americans wanted to drink; they kept drinking; and law enforcement often either turned a blind eye or refused to enforce the law. It's a fascinating read; I found myself reflecting on other efforts by government to control individual freedom and behavior as I read this book.
My local library didn't have this yet, so I broke down and bought it; after I circulate it among family and friends, I will donate it to the library. Our libraries in Pennsylvania have been severely cut in the last two state budgets, which is very unfortunate--in these economic times, libraries get used even more than usual.

Just finished Unto The Sons by Gay (Gateano) Talese--which begins in the United States during World War II, told from the perspective of a young Italian-American boy. The book takes you back through the history of his family, in Italy during both World Wars. Fascinating book; learned many things I did not know about that era, and a great read.

I just finished Michael Lewis' The Big Short. If you want a view of the mortgage meltdown from the other side of the table, read this book. Lewis tracks three different individuals (who did not know each other) who separately figured out that all the CDOs (Collaterialized Debt Obligations) backed by the bad mortgages, put into tranches, rated by Moody's and Standard and Poor's, insured by AIG, and sold, sold, sold were a house of cards. All three of these individuals figured out ways to bet against the prevalent opinion (housing will keep going up and up and up forever) and made big money "shorting" the market. If you are in the real estate business, you will find yourself asking (as I have done for years) how could these Wall Street "geniuses" be so stupid? One of the investors, who took apart the prospectus for the CDO was attacked for "using bad data"--he replied to his critics: "It's your data".  It's a fascinating read, and if you are as interested in this meltdown as I am, you'll like it. By the way, you'll understand at the end why TARP did not fix the problem, nor will any problems be fixed without involving "fixing" Fannie Mae and Freddie Mac.

Just finished a great book: Appetite for America by Fred Harvey. This is about the legendary Fred Harvey, who was in many respects the founder of the chain or franchise restaurant. Fred Harvey built his business along the path of the Atchinson, Topeka and Santa Fe line which ran from Kansas to California. Harvey Houses were known for quality food, which was unique at the time; his policy of employed young single women as waitresses (Harvey Girls) is credited with supplying wives to many of the men in the West.  He was an outstanding entreprenuer, and many of his principles stand the test of time: " Courtesy and a Smile Pay Dividends; Real Service is Without Discrimination" Preserve or Create--Never Destroy; Tact is an Asset and HONESTY is still a Virtue". The author is Stephen Fried; as usual for me, I got this book from the library.

I read voraciously, and the ones that make it here are the top ones. Here's a few from the many read lately: Animal, Vegetable, Miracle by Barbara Kingsolver. This was lent to me by my grateful neighbor, Mary. She's grateful because I garden, and always share my produce. This book is right up my alley with that--Barbara Kingsolver, her husband, Steven Hopp, and her daughter Camille Kingsolver all contributed to a book about a family "deliberately eating food produced from the same place where we worked, went to school, loved our neighbors, drank the water and breathed the air." They did just that--with a very few exceptions (they bought fair trade coffee, for example). So, no cherries in December, no asparagus in August, no Butterball turkeys--but delicious turkeys they raised themselves. A fascinating book,and if you are a gardener and know the unparalled pleasure of a ripe tomato from your own garden in July, you will get it. One of the things she researched that really stayed with me is that in all the Native American languages, the word for February is "the hungry month"--which is exactly true for those who raise and store their own food--by February, it is almost all gone.

Switching gears entirely, I picked up The Blind Side by Michael Lewis in an airport bookstore. I already knew the bare bones of the story: a white family adopted a young black man, Michael Oher, who goes on to play professional football. It's been made into a movie starring Sandra Bullock, and the movie got a lot of press around Christmas. First of all, there is a lot about football in this book--specifically the progression of how the NFL uses players, particularly those, like Oher, who guard the quarterback's "blind side".  When my husband and son read this, they will undoubtedly get more out of that part than I did. I was interested in the human side of the story--and it is inspiring. Michael Oher had an awful childhood; a mother addicted to drugs, no food, days on end with no schooling, little attention (he had never had anyone read a book to him), and a series of happenstances lead him to the Tuohy family, who adopted him, took him in, and loved him as one of their own. It is thought provoking and inspiring, and makes you wonder "What if?" about all those other kids out there who are in Michael Oher's situation.

For the most recent "epic tome", I read The Queen Mother, the Official Biography by William Shawcross. I'm an admitted Angophile and history buff, but even if you aren't, Queen Elizabeth (the mother of the current Queen of England) had a most amazing life. Born in 1900, she died at 101, having lived through two World Wars, the Great Depression, and much, much more. Shawcross makes her human and helps the reader to understand why she was so beloved by the British people. She seems to have been born with an inner sense of the perfect gesture. One example--she lost one of her brothers in WWI. As she entered Westminster Abbey to be married, she suddenly left her father's side and "went to lay her bouquet of white roses on the Tomb of the Unknown Warrior, placed at the west end of the nave in honour of the countless British dead of the Great War. . ." When World War II came, she and her husband (who became King when his brother Edward famously abdicated) set an amazing example for the people of Britain. They continued to live in Buckingham Palace despite the windows having been shot out; after the palace was bombed, she said: "At least now I can look the East End [the East End of London, which was flattened by the Germans] in the eye." Many people thought her daughters, the princesses Elizabeth and Margaret should go to Canada for the duration of the war for their safety; to this she said: "The girls cannot go without me; I cannot go without the King, and the King will never leave." Hitler called her "the most dangerous woman in England" for her courage and example. She was a Scot, and endeared herself to transplanted Scots worldwide, on her trips from Canada to New Zealand. It is a remarkable story. This is the official biography, so it is mostly peaches and cream, but very interesting nonetheless.