Chapter 5: Working With Buyers and Sellers

Special Features: Dormers

A dormer is a window or window-like protrusion out of the roofline of the second floor of a structure. If a dormer is part of a room, it adds living area to the structure. If a dormer is situated in the attic, and does not open directly into a room that is considered living area, it is called a false dormer and is not included in the living area. Dormers that contribute to living area are measured just as any other second floor space with the depth of the outside construction (brick or frame) added in.

Special Features: Fireplace

A fireplace that protrudes from the exterior wall of a house is included in the living area when exterior measurements are made, and is measured the same as a bay window. A corner fireplace or interior-wall mounted fireplace is already included when the exterior is measured.

Special Features: Foyer or Den with Vaulted Ceiling

A general rule of thumb is that if you can't walk on it or use it, it isn't living area. In other words, the area must have floor beneath it and be accessible from the interior of the house to be considered living area. When the ceiling of the room on the first floor rises to include the second floor, that area must be measured and deducted from the calculation of second floor space. Staircase area, however, is considered living area and should be measured and added in with other living space.

Pest inspection

A pest inspection is a check for damage caused by wood-eating insects like termites, carpenter ants or beetles

Soil inspection

A soil inspection is the examination of the soil conditions on the property to determine if there is any settling or drainage problems

Standard home inspection

A standard inspection covers a home's major mechanical systems - electrical, plumbing, heating, and cooling - and its construction from roof to foundation, exterior to interior

Structural inspection

A structural inspection is a visual inspection of the foundation elements, bearing walls, beams and columns, floor slabs, framing, crawlspace areas, and drainage. The inspector observes these components for signs of movement, distress, damage, and/or the ability to adversely affect the rest of the structure.

Fair Housing Law

Again we need to address the issue of fair housing law when working with buyers. Unfortunately, dealing with a buyer with regard to discrimination issues is less clear than dealing with a seller. When a buyer tells you not to show him or her properties in a certain neighborhood, for example a black neighborhood or an Asian neighborhood, all the buyer has done is to disclose his or her personal prejudice. While it is against the law for a seller to discriminate, it is not against the law for a buyer to do so on his or her own behalf. On the other hand, if you are working with buyers who belong to a protected class, for example an African-American couple, you could have a situation arise such as this. After the showing, your clients are driving away and a neighbor approaches and tells you in no uncertain terms that you must not allow "those people" to buy the house. In this case, you must talk to your broker and find out how to handle the situation. Hopefully, your broker will advise you to get in touch with your buyers and explain what happened. In most cases, the buyers would not want to live next to someone who is bigoted and will decide to look someplace else. The buyers could decide to file a complaint with HUD, but you'll have to follow the lead of your employing broker on whether or not to advise that course of action.

Inspections and Disclosures

Although obtaining the inspections is the responsibility of the buyer, the broker should explain the inspection process to the seller. There are a number of inspections that buyers can request.

Explaining the Exclusive Agency Agreement

An exclusive agency listing agreement gives a broker the right to market and sell a property for a specified time period, while the owner retains the right to find a buyer and sell the property without owing the broker a commission. The seller must pay a commission only if the home is sold by the broker or an authorized agent or subagent of the broker. This type of agreement is exclusive in the sense that the property is listed with only one broker. And as we mentioned on the previous screen, all exclusive listings must stipulate a definite termination date. They cannot be "automatically" extended. For example, Broker Bill lists Jim's property. If Broker Bill (or anyone other than Jim) sells the property, he gets the commission. But if Owner Jim sells his own property, Bill gets no commission. This type of listing is not very common these days in residential transactions because it increases the chances of a dispute over the commission between the broker and the seller over who was actually the procuring cause of the sale. Be sure your seller understands which type of listing agreement he or she is signing.

Weekly Activity Reports

An important part of your seller communication is a weekly activity report. Many licensees prefer to send a monthly report because it looks like there has been more activity. But again, frequent communication with your sellers is critical, so the weekly contact is best. Let your sellers know that your weekly report will include, as applicable: Number of inquiries on the property that week Number of showings Advertising done that week Open houses held Number of open house visitors Comments made by other agents or prospective buyers You can also send along copies of any ads you placed that week, a copy of the MLS pages, copies of pages from any websites where the property has been listed and information about any e-mails that you sent to promote the home. Note: It's critically important to maintain communication with your sellers, even during weeks when there has been little or no interest in the property.

Explaining the Buyer Broker Agreement

As in the case of exclusive right to sell listings, the broker may enter into a right-to-buy agreement with the buyer. This is an employment agreement between the buyer and the broker that commits the broker to locate a property for the buyer within a certain timeframe and at acceptable prices and terms. There will also be a holdover period after the termination date of the agreement during which the broker will still be entitled to a commission. The contract with the buyer provides that the buyer will compensate the broker for locating the property, but if the proper boxes are checked on the form, the broker may seek compensation from the seller or the seller's broker. The Commission has two forms available for use; the agency form and the transaction-broker form for buyer-broker contracts.

Attracting Buyers

As we discussed in an earlier chapter, a number of advertising methods are available to attract buyers. Most buyer contacts that result from your newspaper advertising, signs and website listings are typically telephone calls. Many offices have what is called "floor time," which consists of periods of time when agents can take inquiries, usually on a rotational basis. When a licensee is on floor duty, any new caller who does not ask for a specific agent by name becomes that licensee's prospect. When you have floor time, you need to be well prepared for handling those calls. These first buyer contacts are critical. You want to be sure that you can turn the call into an appointment that will position you for a future sale. Using an incoming call register, log all phone calls you take, including the date and time of the call. Follow these guidelines when handling each call from a prospective buyer. Get the caller's name and telephone number. Find out which property the caller is interested in and why. Try to give as little additional information about the property as you can. The less information you give the less chance the caller will find a reason to eliminate the property and the better chance you'll have of getting an appointment to show it. Don't ask the caller if he or she wants to see the property; ask when he or she wants to see it. "I can arrange to show you this property at 5:30 this evening, or would 6:30 be better?" Set a place to meet your prospect.

Special Measuring Challenges

Bay windows - A bay window is a relatively small area that protrudes from the main house. In this area it is typically found in kitchens or breakfast areas, but it is also found in dining rooms and bedrooms, particularly in Victorian-style houses. To be a bay window and add to the square footage of the living area, there must be a foundation beneath the window protruding from the house. Protruding windows that do not begin at the foundation are not included in living area. A bay window may be a simple rectangle, but is sometimes a combination of a rectangle with a triangle attached to either end. To calculate the area of a rectangle, multiply the length times the width. To calculate the area of a triangle, multiply the base times the height and divide by two. Note: When a bay window has a triangle on either end of a rectangle it is not necessary to divide by two; but remember that the single calculation included the area of both triangles! An important thing to remember when measuring the house is to measure the dimensions that will enable you to calculate the square footage. Draw the rectangles and triangles on a separate sheet of graph paper if it helps. Remember that the dimensions of the triangle will often be projected into space rather than along the wall of the house. The triangular parts of bay windows may be more accurately measured with the yardstick or carpenter's rule than with a 100-foot tape.

Exterior Walls

Because the definition of living area states that measurement is based upon exterior wall dimensions, you must add an exterior wall perimeter around the upper story floor area. The thickness of the perimeter wall can be obtained by measuring the wall width at an exterior door. This width is typically 6/10ths or 8/10ths of a foot depending upon framing and exterior wall finishes. This dimension should be obtained as you enter the house and written as an adjustment factor to use to convert interior dimensions to exterior dimensions at the time of area calculation. Note: If you are a novice, or if you have noticed that you have some difficulty visualizing things you have never seen, you might benefit from asking an experienced agent to help you with this job. Another note: Only 20 percent of the population is born with the ability to visualize things they have never seen; not being able to visualize is not an indication of low intelligence nor is the ability to visualize an indication of high intelligence. Almost all of us, however, can draw in a higher floor when we have had enough experience doing the job.

Before the Listing Appointment

Before the listing appointment, you should prepare for the appointment by: Doing research on the property. - Get tax information, legal description, ownership information, etc. from the local title company Scheduling a visit to the property. - Ask the owners if you can visit them before the appointment. Take notes on the features of the home. Check out the neighborhood. Completing a CMA. - We discussed the CMA in detail in the previous chapter. Do the CMA and be prepared to discuss it in detail with the owners.

Before You Measure

Before you measure, always walk around the exterior perimeter of the structure. This is a great time to make a visual inspection of the structure from foundation to roof. Any obvious problems may affect marketability and should be known to the listing agent before price is discussed. As you are walking around the perimeter, you can begin to draw the shape of the structure. It is recommended that you begin at a corner of the structure and a corner of your graph paper. Positioning your drawing this way will allow maximum drawing space on the paper. If you have never used graph paper before, one square on the graph paper is equivalent to one linear foot of house. Note: A real estate licensee is not a professional property inspector. Advise the seller to seek professional advice concerning any obvious possible problems.

Changing Brokerage Relationships

Brokerage relationships remain in effect until the listing agreement terminates or the transaction is complete for which the broker was hired. If the party with whom the broker has an agreement terminates early, the broker can either walk away or commence legal proceedings. After the termination or expiration of the contract or completion of performance, the broker had no further obligation to the party except to: Account for all money and property received during the engagement If the broker was an agent, maintain confidential information received during the engagement unless the broker has consent to disclose it, disclosure is required by law, or the information become public as a result of someone else's disclosure

Soil Report and Required Disclosures

C.R.S. 6-6.5-101 requires developers and builders to provide a soils report to the buyer. At least fourteen days prior to closing the sale of any new residence for human habitation, every developer or builder or their representatives shall provide the purchaser with a copy of a summary report of the analysis and the site recommendations. For sites in which significant potential for expansive soils is recognized, the builder or his representative shall supply each buyer with a copy of a publication detailing the problems associated with such soils, the building methods to address these problems during construction, and suggestions for care and maintenance to address such problems. In addition to any other liability or penalty, any builder or developer failing to provide the report or publication required by subsection (1) of this section shall be subject to a civil penalty of five hundred dollars payable to the purchaser.

Warranties

Check to see if the construction contract contains a warranty from the builder. A warranty should last for a minimum of one year and should obligate the builder to fix any problems that may occur. Depending on the strength of the housing market, a builder may try to put disclaimers in the contract that the builder is not warranting anything. This is unacceptable. A reputable builder will give a warranty. Be particularly diligent in reading the contract to determine whether the builder is taking responsibility for foundation problems. This is the most common source of major problems for new home construction. The builder may try to pass off liability to the soil engineer, but the foundation should be the builder's responsibility. Also be aware of who is signing the contract on behalf of the builder. Is it a corporation or the builder personally? Builders will try to limit their liability by setting up limited liability companies or other entities with little or no assets. Try to get a personal guarantee for builder obligations. Note: These requirements do not apply to any individual constructing a residential structure for his own residence.

Property Disclosures: Lead-Based Paint Disclosure (Sales) LP-45-10-12

Colorado and most other states require the seller to sign a Lead-Based Paint Disclosure form, the purpose of which is to advise the buyer that any property constructed prior to 1978 may have lead-based paint. Lead-based paint can be toxic, and young children are especially vulnerable. The seller must attest to whether the seller knows of the presence of lead-based paint on the property. The buyer will acknowledge receipt of the disclosure.

Seller's Credits

Contract sales price Items paid for in advance Once you have given them your price for the home, and have estimated their proceeds based upon that price, ask them questions to determine how motivated they are to sell. Try to find out how much pressure they are under to sell and ask them if they agree with your pricing.

Prohibited Activities

Fair Housing Law prohibits a number of activities in real estate. These activities include: Refusing to sell, rent or negotiate with any person Changing terms, conditions or services for different individuals as a means of discrimination Stating or advertising that the property is restricted Telling persons that a property is not for sale or rent when it is Denying membership in any multiple listing service (MLS) or any broker's organization Using discriminatory advertising Giving different terms for loans to buy or repair or denying a loan altogether Fair Housing Law also prohibits these activities: Blockbusting, panic peddling or panic selling- Making a profit by inducing owners to sell by telling them that persons of a protected class are moving into the neighborhood, which will have detrimental results, such as the lowering of the property values Steering- Channeling homebuyers toward or away from homes in certain neighborhoods in order to preserve or alter the makeup of that neighborhood Redlining- Restricting the number of loans in certain areas of a community because of its racial or ethnic makeup NOTE: Brokers are encouraged to display the Equal Housing Opportunity poster in their offices. If the poster is not displayed, a broker could be held liable to prove that a performed act was not discriminatory.

Fair Housing Law

Fair Housing law first began with the Civil Rights Act of 1866, which prohibited discrimination in housing based on race. Title VIII of the Civil Rights Act of 1968 prohibited discrimination in housing based on race, color, religion or national origin. In 1968, the Supreme Court in Jones v. Mayer ruled that discrimination on the basis of race is strictly prohibited. This means there can be NO EXEMPTIONS OR EXCEPTIONS with regard to race. In 1974, the Housing and Community Development Act added sex to the list. In 1987, a Supreme Court decision expanded the definition of race to include ancestry. And in 1988, the Fair Housing Amendments Act added handicap and familial status. Based on these laws the list of protected classes of the Federal Fair Housing Act are: Race Religion Color National origin/Ancestry Sex Handicap Familial status

Learning to Measure

For the sake of discussion, let us assume that you have decided to learn to accurately measure structures and compute size in square footage from the measurements. Education by competent, professional instructors is a great way to lay a foundation for learning to measure structures and to accurately compute size. The second component of education is field experience. Probably few of the associates in your office will refuse to have you tag along and help them to measure new listings. It will cost you time to do this, but you may find that the experience you gain is worth many times the cost of the time. In the event that you expect this course to teach you measurement and calculation, the following information is offered. Best Practices Accurately measuring and computing the square footage of a structure is the first step toward preparing a defensible market analysis of a property. NEVER rely on size information given you by the seller, an appraiser, another agent, or the MLS. Remember that the law holds you responsible for information on the property that you give to consumers. Your legal responsibility is not mitigated in the least by explaining that you didn't actually measure the property; someone else did. The measurement and calculation techniques that are to be described here are those typically used by real estate professionals and appraisers. While there are certainly other acceptable procedures that can be used, those recommended here are most commonly found in real estate principles and practices textbooks and most often taught in pre-licensing education.

Energy Ratings

Home Energy Rating uses a detailed technical inspection to measure a home's energy-efficiency. The inspection is completed by a certified Rater, and analyzed by an accredited Home Energy Rating System (HERS). Tests will be conducted on the home's insulation, windows, walls, basements, attics, crawl spaces, HVAC systems, water heaters, building leakiness, and solar orientation. Once data is obtained about the home, it is entered into an evaluation software program and the home is given an energy rating. The energy ratings are beneficial in a number of ways: "For Builders. Builders find that energy-efficient construction produces a higher quality home. Higher quality construction means happier homeowners and fewer callbacks. The E-Star Energy Rating provides an objective measure of that quality, which can be used as a selling point. "For Homebuyers. Homebuyers will appreciate the quality and decreased utility use of their energy-efficient home. The homebuyer may qualify for an Energy Efficient Mortgage (EEM) if the home attains an adequate energy rating, thereby expanding purchasing power. "For Homeowners. Homeowners can improve the energy-efficiency of their existing home following the recommendations of the E-Star Rating. The costs of any such cost-effective energy-efficiency improvements implemented can be rolled into an Energy Improvement Mortgage (EIM)."

Licensee as Seller

If a broker owns and lists a property, the broker must disclose in the listing the broker's licensed status. It would be advisable for the broker to use a third party to hold escrowed funds and to handle the closing on the transaction. The broker should not try to sell the broker's property to a client. This is an inherent conflict of interest in that the seller is trying to maximize the price on the property and cannot effectively negotiate against himself on behalf of a client. CR E-25 addresses this situation: E-25. Continuing duty to disclose conflict of interest and license status When acting in a licensed capacity or when a licensee sells, buys or leases real property on the licensee's own account, such licensee shall have a continuing duty to disclose any known conflict of interest that may arise in the course of the transaction. In addition, when a licensee sells, buys or leases real property on the licensee's own account, such licensee shall disclose in the contracting instrument, or in a separate concurrent writing, that they are a real estate licensee. In addition, CP-23 provides that "Resale to a person with whom a licensee has conducted previous negotiations concerning the subject property during the listing period (often referred to as a "pocket buyer"), would constitute a violation of 12-61-113(l)(n) in the absence of full written disclosure and acknowledgment by the owner."

Take Care

If a licensee decides not to take a listing because he or she suspects a potential discrimination problem, the licensee should report the situation to the employing broker. Real estate transactions are the livelihood of the real estate industry, and communities view licensees as their real estate "experts." Along with the opportunity to profit from real estate transactions comes the responsibility - both legal and social - to ensure that everyone's civil rights are protected. Licensees must be particularly obvious in their efforts where fair housing is concerned. Not only does the reputation of the industry depend on it, but the consequences for violations are serious. A licensee could lose substantial income if his or her license is suspended or revoked. Given that anyone may file a discrimination complaint, it is wise for licensees to avoid any appearance of discriminatory behavior whatsoever. It's a good idea for brokers and salespersons to adopt policies and procedures that ensure "equal treatment" for everyone with whom they deal. If a practice is not performed consistently or if people are affected differently by the practice, someone could view it as discriminatory.

Prorations, Substitutions, and Leases

If any of the items are leased rather than owned, that should be noted in the listing agreement along with whether the lease is assumable. An example would be a security system. In some cases, fixtures such as chandeliers will have sentimental value to the owner, and the owner will want to replace the item with a new item so that the owner can keep the fixture. The listing agreement should make note of any substitutions. An alternative would be to give the buyer a credit for replacing the item. This gives the buyer discretion to choose the replacement item. The listing agreement should also be specific with regard to the proration of prepaid items, perishable, growing crops, security deposits, and other items that have value but are not otherwise described in a contract. The buyer deserves to know all that is included in the sale so that he/she can negotiate a fair price.

Estimating Closing Costs

In addition to prequalifying the buyer to determine how much house the buyer can afford, you will want to provide the buyer with an estimate of the cash they will need at closing. You can use a worksheet to come up with an estimate. The lender probably will have already done this in order to prequalify the buyer. If the buyer balks at the prequalification process, tell the buyer that having a prequalification letter from a lender greatly enhances the ability to negotiate with the seller. If the seller knows the buyer will be able to meet the financing contingency, the seller might be more flexible with other terms in the contract.

Broker as Buyer

In addition to the duty to disclose set forth above, the broker who anticipates purchasing a property from a seller with whom the broker has an agreement has an additional obligation to execute the Licensee Buy-Out Addendum to Contract to Buy and Sell Real Estate (LB36-9-08) in certain situations, as set forth in Rule 7-F and CP-23: CP-23 Commission Position On Use Of "Licensee Buyout Addendum"(Revised January 17, 2006 ) Rule F-7 requires real estate licensees to use the Commission approved "Licensee Buyout Addendum to Contract to Buy and Sell Real Estate", when purchasing certain listed properties. It is the Commission's position that Rule F-7 requires use of the Buyout Addendum under the following circumstances When a licensee enters into a contract to purchase a property concurrent with the listing of such property When a licensee enters into a contract to purchase a property as an inducement or to facilitate the property owner's purchase of another property, the purchase or sale of which will generate a commission or fee to the licensee When a licensee enters into a contract to purchase a property from an owner but continues to market that property on behalf of the owner under an existing listing contract

Homeowner Tips

In addition to tips for cosmetic changes, you might have become aware of an improvement that would increase the value of the home more than the cost to do it. If this is the case, share your suggestion with the sellers. Note: If sellers choose to make such an improvement, you may have to adjust the listing price to reflect that improvement. The sellers need to understand that anything they can do to make their home more attractive in a competitive market will be to their benefit in the long run. Also let your sellers know that it's best for them to be "away" when a buyer comes to view the home. Buyers tend to become very quiet if the sellers are present and it will be hard for the agent to get honest comments from the buyers when the sellers are there. Sellers need to understand that only when the agent has knowledge of the buyers' concerns will he or she be able to get those concerns addressed. The tips on the previous screen are not all inclusive. You can get more ideas on what to include in your tip sheets by searching the Internet for "homeowner tips." Also, some companies specialize in producing forms and materials that you can copy or print for use in presentations or share with clients. One such company is Realty Tools, Inc. The kit that they offer contains a variety of presentation materials as well as flyers for listings and open houses, tip sheets for sellers and a host of other documents that can all be customized with your company name, logo, your picture and your contact information.

Sharing the Risk

In the case of structure measurement and calculation of size, it may be possible to share some of the risk of accurate measurement by asking the owner to assist you in making the actual measurements. Many owners are also receptive to helping to compute square footage. It is always a good idea to offer the owners the option of sitting with you while you compute square footage. If they will agree to this, there is seldom a dispute over the square footage figure so computed. Remember, almost no one will argue with data that they themselves have had a hand in gathering. Structures that are intricate in shape or that have unusually-shaped components may require sharing risk with a competent engineer, architect, or appraiser. The engineer or architect is the first choice simply because he probably has access to better computer software for calculating size from measurements than the appraiser. All three professions are highly regarded by consumers for the accuracy of their measurements and computations, and should an error be discovered will provide an excellent crutch for the real estate licensee to lean upon. Chances are that the law will still hold the licensee ultimately responsible, but due diligence of this caliber is impressive to consumers and judges. Note: Should no one be available to share in the risk of measuring unusual shapes, remember that the internet was created so that university professors and students could share information, and there are many sites intended for use by students that can be accessed by anyone. Finding a site with directions for computing the area of a hexagon, for example, is as simple as typing the word "hexagon" into the information line on your browser.

Documentation

In the event that inaccurate measurements or calculations are made and successfully contested, you may be able to transfer some of the risk. This type of error is covered by errors and omissions insurance unless it can be shown that the misrepresentation of the structure's size was deliberate. Remember that no errors and omissions policy will cover fraud; so the agent who deliberately "adjusts" the size of a property to better fit the owner's asking price risks civil as well as criminal consequences. In order to decrease any risk, it is necessary to establish a plausible paper trail for the measurement and calculation process. Many offices have forms that must be used by associates for the measurements and computations. The broker or his representative should verify these measurements and computations before a property is placed in MLS or advertised as being a specified size. While no broker will be able to check out the size of every bay window or front porch, no great diligence is required to deduce that there is a problem with a structure whose rough measurements are 50' X 20' and whose living area has been computed to be 1475 square feet. If company procedure does not call for associates to turn in their measurements and computations, it is a good idea for the listing agent to include the information in the listing folder that is turned in to the broker. This establishes that the broker had an opportunity to examine the information before the structure was placed on the market for sale and either accepted it as accurate or failed to provide the agent with adequate supervision. Give the owners a copy along with the other listing documents to establish that they were aware of the information and by failing to question it gave tacit acceptance of its accuracy.

Other Prohibited Activities

It is also against the law to perform any of these activities against any member of a protected class. To discriminate in negotiating or executing any item or service related to a real estate transaction, such as title insurance, mortgage insurance, or loan guarantee To attempt to engage in any of the unfair practices listed above and on the previous screen To induce or attempt to induce any person to sell or rent any real property by making remarks regarding the entry or prospective entry into the neighborhood of anyone belonging to one of the protected classes To coerce, intimidate, threaten, or interfere with any person in the exercise or enjoyment of his or her rights regarding a real estate transaction To insert into a written instrument relating to real property any provision which professes to prevent or restrict the conveyance, encumbrance, occupancy, or lease of the property to individuals in a protected class. (Any such provision would be void.) To insert into a written instrument any condition, restriction, or prohibition which directly or indirectly limits the use or occupancy of real property to individuals in a protected class (Any such provision would be void.) To attempt to honor any such provision or condition as described in the previous two statements To discriminate in a credit transaction by denying credit, increasing charges or fees, restricting the amount or use of the credit given, or imposing different terms or conditions on the credit given

Using The Tape

It is always an advantage to have a helper to hold one end of the tape. If you must measure alone, hook the end of the tape to a corner of the structure and measure the wall to the point where it ends or turns a corner. Measure to the nearest tenth of a foot, holding the tape tight against the wall, and record the measurement on your graph paper. Hint: Some walls will simply not hold the hook in place long enough to measure. If you have this problem, there are two possible solutions. Solution 1: Lay the tape on the ground, secure the hook with your Phillips screwdriver, and measure the length of the wall along the ground beside it. Solution 2: Carry a roll of duct tape and secure the hook to the wall with duct tape. Always draw solid lines around walls and indicate other covered areas such as carports and porches by dotted or dashed lines. When completed, your drawing of the house should correspond to the shape of the house as you drew it during your walk around the perimeter and all perimeter lines should form a closed box! If the drawing does not close, this means that there is a mistake in your measurements. Mistakes are easily made when there are shrubs, etc. around the foundation of the building. If your drawing does not close, check all your measurements. If you do not find your mistake, keep measuring until you do. Hint: Many mistakes are made measuring very long, unbroken walls due to the tape sagging from lack of support. If you think that might be a problem, ask the owner to help you to support the tape. If you are alone, either divide the wall at logical points such as windows and measure from point to point, or lay the tape on the (flat) ground beside the foundation and take that measurement. Another hint: A common source of measuring error is failure to correctly draw confusing offsets and insets. These types of offsets and insets are often located in the patio of homes, and can be accurately drawn if you will "walk" around the exact shape of the house and identify all of the "corners." Once you have correctly drawn these architectural details, measuring will more likely be correct. Always spot check dimensions while you are at the site. This is the reason that the 10X10 graph paper is used. It provides evidence of problems while you are at the site and saves you from making an additional trip or making dangerous guesses after you return to the office.

Importance of Communication

It might seem logical that the major dissatisfaction sellers have with real estate agents is failing to sell the property during the listing period. However, the truth is that the primary criticism sellers have about their agents is lack of communication. Sellers often complain that once the listing agreement is signed, the agent "puts a sign on the lawn" and then "disappears." Their home becomes one of dozens of properties on the market that may be shown occasionally. A business card gets left on a table to show that someone came through, but the owners often don't get feedback on how the showing went. Owners can feel cheated or resentful when the person who so eloquently presented the reasons why he or she should get the listing seems to be so unavailable once the papers have been signed. One of the reasons that owners may start having these negative feelings is because the agent did not adequately prepare them for what would be happening during the first days of the listing period and beyond. During the first few days, you are doing multiple property marketing tasks - preparing flyers and ads, getting the property information into the MLS, etc. - which your sellers may not be fully aware of. While you are "busy being busy," your sellers are home waiting for the onslaught of prospective buyers, which usually doesn't happen in the first days. With a little planning and forethought, you can make your sellers feel like partners in the selling process, while keeping the lines of communication open and flowing.

Preparing the Home for Listing

It's helpful to give the sellers tips or suggestions to help with the marketing effort. These suggestions should be written and include information about the cosmetic aspects of the exterior and interior of the home.

Be Cautious about Joking

It's probably safe to say that most agents would not intentionally act in a discriminatory way or say things that they know are discriminatory. However, agents need to be very aware of what they are saying at all times. It may seem innocent enough to tell racial or ethnic jokes. And making disparaging remarks about particular groups of people does not mean that an agent would actually discriminate in a real estate transaction. However, saying those things can lead to the assumption on the part of a buyer, a seller or even another agent, that the person making those remarks is racist or bigoted. If an agent stands by while a client or another agent is making potentially discriminatory remarks, it can appear that he or she agrees with those attitudes. So it's best if licensees avoid participating in those types of situations.

To Measure or Not to Measure

It's up to the licensee to decide whether or not to measure the structure or to rely on measurements from another source - such as a multiple listing sheet from a previous listing of the property or measurements done by another associate in the same office. Here's a process to go through to make the determination. Decision 1: Should I learn to measure correctly? List decision alternatives: Yes, I should or No, I should not learn to measure structures correctly. Is there a middle ground between the two? Research decision alternatives: If yes: What will I have to do to learn to measure structures? Is it possible for me to do what will have to be done? Is it financially feasible for me to attend professional instruction? Is there an effective alternative to professional instruction? If no: If I do not learn to measure structures, who will do this for me? Can I depend on other associates in the office to measure for me? Will I have to pay the associates for their time if they help me? Who will be held legally responsible for any inaccuracies in measurement-the associate or me? If middle ground: Can I learn to measure simple structures and get associates to help me with the more difficult ones? Predict consequence of decision alternatives: If I learn to measure structures myself will I be more in control of my work schedule? If I learn to measure structures myself will I be more comfortable presenting market studies to sellers? If I learn to measure structures myself will I be held responsible for the accuracy of the measurements and calculation of size? What if I invest time and money in professional instruction in structure measurement and calculation of size only to find that I cannot do it correctly? List other possible consequences. Select decision alternative most appropriate for you.

Some tips for the exterior include:

Keep grass and shrubs trimmed. Repair fencing and repaint if needed. Place blooming flowers on the patio or near the front door. Check condition of the finish on the front door and trim. Redo if peeling or worn. Place lawn furniture attractively. Make any roof repairs that may be necessary. If there are outdoor pets, make sure pet area is clean and neat.

Some tips for the home interior include:

Keep the home neat and "picked up." Be sure floors, bathrooms, kitchen and appliances sparkle. Be careful about cooking "aromas" - avoid vinegar and fried food smells; but blueberry muffins, home-baked bread or chocolate chip cookies can create the right atmosphere. Repair leaky kitchen or bathroom faucets. Clean carpets. Make sure rooms are well lit - either through natural lighting or higher watt light bulbs. De-clutter closets. Remove excess furniture to make rooms look bigger. Straighten and de-clutter the garage and basement. Move items to storage if necessary.

Seller's Debits

Loan balance Unpaid items due from seller Other expenses, such as closing fees and document preparation

New Home Purchases

Many times, prospective buyers will go directly to a new subdivision and contract directly with the builder for the construction and purchase of a home. Unsophisticated buyers can get into trouble without guidance from a broker. When you qualify a prospective buyer, determine whether they are interested in purchasing a home from a builder. If so, point out the pitfalls of their doing so without a broker. The first pitfall is the builder probably will not use the standard form contract with which all brokers are familiar. As a broker, you should recommend to the buyer to get legal counsel to review the contract before the buyer signs anything or puts down a deposit. The builder may tell the buyer that their form contract is non-negotiable, but every contract is negotiable. The buyer should not attempt to negotiate it without legal representation. The broker should accompany the buyer to the sales office of the builder or developer and see to it that the buyer is properly registered so that the builder will be obligated to deal with the broker as well as the buyer.

Inside Rooms

Measurements of inside room dimensions should be taken very carefully. In the ideal situation, there is a hallway that runs the length or width of the second floor, and can be measured for one dimension. When this is not the case, individual room measurements must be carefully made and added to the drawing. These individual measurements are then added together. Any interior partitions between the rooms are measured, and those measurements added in with those of the rooms. Typical interior walls range between 4 and 6 inches deep. The depth of outside walls should be added in also. Typically, brick walls are 10 inches deep and frame walls are 6 inches deep.

Earnest Money Not Held in Trust

New home construction contracts will require an initial non-refundable deposit that can range anywhere between five and fifteen percent. This deposit is not like an earnest money deposit; the builder is free to use the deposit as he wishes. Do not allow the builder to put the deposit into the builder's general operating account. Ideally, the deposit should be put into an escrow account by a third party. This protects the buyer in case the builder gets into financial difficulty. If the builder will not agree to a third party escrow, a new home buyer should, at a minimum, get an agreement that the money will go into the construction account for the house being built.

Ancillary Rooms

Offices, Game rooms, Workshops, Sunrooms, etc. are only considered living area if they meet these tests: Can be accessed without leaving the living area of the house. Carports, garages and covered porches are not living area, so if one must be crossed to gain access to the office, game room, etc., that room so accessed is not living area. Under the same roof as living area of the house, or if a later addition, the same type roof tied in to the original roof. Sun porches with aluminum roofs are not living area. Are attached to the living area and are heated and cooled by the same system as the living area or an equivalent area. A game room added directly on to a house but having its own separate central heat/AC system is living area. A workshop with only window unit A/C or an attic or ceiling fan is open to question.

Listing Presentation Manual

Once you have created a listing manual, it will require very minimal upkeep or revision and will save you time when preparing for listing appointments. All the information about your skills and your firm's track record will be at your fingertips, assuring that you will not overlook the important points to share with the sellers.

Communicate

Once you have secured the listing, let your sellers know what to expect in the first few days: Tell the sellers they will be receiving a letter from your broker. Most brokers send a "thank you for listing with our firm" letter to new clients to introduce themselves and to invite the sellers to call the broker directly if any problems arise. Before you leave the house, install a lockbox. The lockbox holds the key to the home. Agents can access the lockbox either by using a special lockbox key or with an electronic keycard. Install the lockbox on the doorknob, a metal railing or some other stationary object. Meet with the sellers a day or two after the listing appointment to go over your specific marketing plan with them. At this meeting, go through the home again to re-familiarize yourself with its features and make note of any particular suggestions you might have. Give the sellers some tips, ideas or suggestions on what they can do to help market the property. Let them know that selling their home is a team effort. When you meet with your sellers, you should share important information on the following topics: Homeowner Tips Activity Reports Advertising Plan Showings Open Houses

Fair Housing Concerns

Real estate licensees have an ethical responsibility to their clients and customers. When it comes to Fair Housing laws, their responsibility is a legal one as well Civil rights laws in the real estate industry are designed to create a situation in which persons having similar financial means will have similar choices when attempting to buy, lease, rent, or finance property. The laws are also designed to allow everyone an opportunity to live in the place of his or her choice by creating an open and unbiased market. Fair Housing laws on the federal, state and local levels affect every aspect of a real estate transaction.

Smart Energy Living Alliance (SELA)

SELA is a nonprofit organization whose purpose is to provide the resources to help people make responsible energy decisions. It is an organization that educates about clean energy and guides consumers in how to locate green products and services. SELA also assists utility companies with their research, development and implementation of energy efficient processes. SELA is composed of business, utilities and consumers with the common goal of promoting energy efficiency.

Consider the Situation

Salesperson Greg is making a listing presentation to Sam and Sarah Whitehead, who live in a predominantly Caucasian area. During the presentation, Sam tells Greg that they have lived in the area for a long time and have made several upgrades to their home. As a courtesy to the neighbors they have known for so long, Sam says that he wants Greg to "screen" prospective buyers, being careful not to show the home to anyone who could "change" the neighborhood in any way - especially if it would lower their neighbors' property values. Even though Sam is not being direct in his comments, it would be easy for Greg to believe that the Whiteheads would not accept an offer from a buyer who is not Caucasian. Greg needs to discuss fair housing laws with the Whiteheads and, if he senses that they still would be reluctant to comply, he should not list their home.

An Example

Salesperson Nancy is giving a listing presentation at the home of a Chinese couple, the Lings. They understand English well and speak it some, but they are difficult to understand. Nancy feels uncomfortable about this, but doesn't say anything at first. After the presentation, the couple indicates that they want to list their home with Nancy. Nancy knows a Chinese-speaking agent who is a local MLS member, so she suggests that the Lings may want to list their property with this other agent. They still want to list with Nancy, but she insists they would be better served with the other agent. Even though Nancy's intentions are good and she feels she is offering helpful advice to the Lings, her actions could be considered discriminatory on the basis of national origin. If she refuses the listing, she could be violating fair housing laws.

Consider this Situation

Salesperson Tom is making a listing presentation to Sellers Ben and Mary Hadley. The Hadley's appear hesitant to commit to the listing. Tom tells them that he has heard that a neighbor down the street has an offer on his home from a Latino couple. He suggests that if the Hadley's can list and sell quickly, they should be able to secure a good price on the sale. But if they wait until the new family closes and moves in, it may impact the amount they can expect to get for their home. Tom's statements to the Hadley's indicate that a minority couple moving into the neighborhood may lower the property values. This is blockbusting and is a violation of antidiscrimination laws.

Measuring the Structure

Structure measuring is the most often observed area of unintentional misrepresentation in real estate lawsuits. Many agents simply do not know how to correctly measure and calculate the correct square footage of a structure. Intentional misrepresentation also occurs more often than is good for the industry when agents must find some way to bridge the gap between the amount expected by the seller for his property and the price of comparable properties. Either is unacceptable in an effective risk management program. There are several decisions to be made concerning structure measurement and the manner in which they are made will determine the level of risk that is acceptable to a real estate licensee.

Energy Rated Homes of Colorado (ERHC)

The Energy Rated Homes of Colorado (ERHC) program combines an energy ratings system with financial incentives to encourage Colorado homeowners, builders and buyers to invest in energy-efficient buildings and appliances. Through its leading-edge home energy rating system, called E-StarTM, ERHC provides to homeowners and builders an energy-efficiency analysis of a current or proposed structure. Based upon this analysis, ERHC recommends improvements that would increase energy efficiency, save money and reduce air pollution through reduced energy use. Advancing energy-efficiency in homes has far-reaching effects from local to global. To start with the individual, decreased utility use saves the homeowner money, and may qualify a homebuyer for special energy-efficient mortgages with additional purchasing power. E-Star wants to make homeownership more affordable and easier to accomplish. Higher energy efficiency correlates with higher quality; another homeowner benefit. At the level of the local economy, E-Star pursues its aims by supporting the business community that is helping to create higher quality, energy-efficient homes, as well as sell and finance them. This includes the builders, raters, real estate professionals, code officials, and utilities. E-Star helps builders distinguish themselves in the market, adding revenue, while promoting job growth for more knowledgeable and higher-quality workers in this sector.

Exemptions

The Fair Housing laws allow for exemptions in some areas. However, please note there are absolutely no exemptions, exceptions or excuses for racial discrimination. The Federal exemptions to the 1968-88 laws are listed below. The sale or rental of a single family home by an owner is exempt if the owner does not own more than three homes at one time, does not use discriminatory advertising and does not use a real estate agent Rental of units in an owner-occupied, one-to-four family dwelling is exempt, as long as the owner does not use an agent to secure tenants Religious organizations may restrict housing to members of the same religious organization. Non-profit religious organizations can add a surcharge to the sale or rental of a property to a person that does not belong to their religious group, as long as the membership in the group is not limited by race, color or national origin. A private club may restrict rental or occupancy of its dwellings to members only, as long as the dwellings are not commercially operated. However, the club may not discriminate in its membership requirements. Senior citizen housing is exempt if 80% of the units are occupied by at least one person 55 or older and if it publishes and follows policies and procedures that demonstrate the intent to be 55-and-older housing.

The Holdover Period

The Listing Agreement states: "Any Sale of the Property within _____ calendar days subsequent to the expiration of the Listing Period (Holdover Period) to anyone with whom Broker negotiated and whose name was submitted, in writing, to Seller by Broker during the Listing Period (including any extensions thereof). However, Seller shall owe no commission to Brokerage Firm under this subsection (3) if a commission is earned by another licensed real estate brokerage firm acting pursuant to an exclusive agreement entered into during the Holdover Period." The broker needs to explain to the seller that if the listing expires and the seller does not re-list the property, the seller may owe a commission to the broker for the period of time set forth in the "blank" in the paragraph. The seller will owe the commission if a buyer with whom the broker negotiated during the listing period purchases the property within the holdover period and the broker submitted the name of the buyer to the seller during the listing period.

Procuring Cause Disputes and Right to Commission

The broker should explain to the buyer that as long as the broker is the procuring cause of a successful contract between the buyer and the seller, the broker will be entitled to a commission under the exclusive right-to-buy agreement. In order to determine whether the broker was the "procuring cause" a court would examine whether the original introduction of the purchaser or tenant to the property started an uninterrupted series of events leading to the sale (or to any other intended objective of the transaction) and whether the series of events hindered or interrupted in any way. If the "series of event" were interrupted by actions not caused by the broker, the broker will be entitled to the commission. The commission is earned by the broker upon the buyer acquisition of any interest in the property or the creation of any right to acquire any interest in the property or any agreement to acquire any ownership interest in an entity that owns the property.

Effects of Exclusive Relationship

The broker's duty under an exclusive right-to-buy agreement is to use diligence in locating a property for the buyer under the terms agreed to in the contract. If the broker is not diligent, the buyer may void the contract. Diligence includes being reasonably available to show properties. The broker must accommodate the buyer's schedule and should not send the buyer to view properties alone. If the buyer, without due cause, cancels an employment agreement before it has expired, the broker can either walk away or sue the buyer under the terms of the agreement. The broker should explain to the buyer that the buyer cannot work with another broker while the agreement is in effect. The broker should also explain the effect of the holdover period.

Inclusions and Exclusions

The listing should be specific about which items are included in the sale and which are excluded. Typically, items that are fixtures and certain personal property items are included in the sale. Fixtures are those items that are attached to the property in such a way that removal would cause damage to the property. The listing agreement spells out the items that are included in the price of the house: Fixtures. If attached to the Property on the date of this Contract, lighting, heating, plumbing, ventilating, and air conditioning fixtures, TV antennas, inside telephone, network and coaxial (cable) wiring and connecting blocks/jacks, plants, mirrors, floor coverings, intercom systems, built-in kitchen appliances, sprinkler systems and controls, built-in vacuum systems (including accessories), garage door openers including remote controls. Personal Property. The following are included if on the Property whether attached or not on the date of this Contract: storm windows, storm doors, window and porch shades, awnings, blinds, screens, window coverings, curtain rods, drapery rods, fireplace inserts, fireplace screens, fireplace grates, heating stoves, storage sheds, and all keys. If checked, the following are included: o Water Softeners o Smoke/Fire Detectors o Security Systems o Satellite Systems (including satellite dishes). **Note that unless these items are excepted out of the listing, they will be deemed included. This means that these items were factored into the listing price of the house. When the buyer makes an offer on the house, the buyer's price assumes these items to be included.**

Explaining the Exclusive Right to Sell

The most widely used agreement is the exclusive right to sell listing agreement. Under this arrangement, the broker has the exclusive right to market the property for a specified period of time. If the property sells while the broker has the listing, the seller must pay the agreed-upon commission, regardless of who actually procured the buyer (who was the procuring cause). This means that even if the seller himself finds the buyer with no help from the broker, the seller still owes the broker the commission. When a broker enters into this type of listing, he or she becomes more willing to expend the time, energy and funds to actively market the property. It limits any conflict with the seller over who was the procuring cause. An exclusive right to sell listing gives the broker the greatest assurance that he or she will receive compensation for his or her marketing efforts. And as a result, sellers usually see a quicker and more profitable sale of the property. Note: All exclusive listing contracts must contain a definite termination date. A licensee could be subject to disciplinary action for receiving a commission for a transaction if the agreement did not have a definite end date.

Meeting with Buyers

The primary reason for meeting with the prospective buyers is to "put a face with the name" and get information about their needs. Many agents find it helpful to use a form to prompt them for the information they want and give them a place to record it. The important pieces of information to acquire include: Demographics: Name, address, phone numbers, e-mail address. Current information: Family size; rent or own at current address; features of current home they don't like; if owners, do they need to sell before they buy new; if need to sell, is home listed. Needs and wants - Reason for wanting new home; what features looking for in new home. Financial information - Qualified for or turned down for a loan in the past year; qualified for what amount, can afford what size payments; size of down payment available.

Qualifying Buyers

The process of correlating the buyer's needs and wants with his or her actual financial capacity to buy is called qualifying the buyer. You need to determine what your prospect can afford and then find those properties that fit into that range. The best way to qualify your buyers is to have them go through a lender's prequalification process. It will save time and energy and potentially save the buyers from embarrassment and disappointment if they can't afford a property they really like. Some first-time buyers may balk at the idea of dealing with a lender so soon in the process. They may feel it's too much pressure or more of a commitment than they are ready to make. Rather than alienate them if they refuse the prequalification suggestion, give them some idea of what salary it generally takes to purchase a home in the price range in which they're looking. As a real estate agent you can ask some probing questions to help you determine a buyer's capacity to make a purchase. For example, you could ask: How soon the buyer wants to buy How much savings have been earmarked for a down payment Where the prospect works (if talking with a couple, do they both work and where) If the prospect currently rents or owns If a renter, how much is the monthly rent payment If the buyer will need the equity from a currently-owned home to purchase a new one

Tools

The tools you'll need to perform the measurements include: 100-foot tape measure with a hook on the "dumb" end. Either metal or fiberglass is acceptable. A metal tape may cut hands, and might break if stepped upon. A fiberglass tape will stretch over time and will no longer give accurate measurements. Either metal or fiberglass should be calibrated in feet and tenths of feet, not feet and inches. An inch is not equal to a tenth of a foot! (If you must use a foot/inch tape, convert the inches to tenths by dividing the inches by 12. For example: 4 inches is equal to .3 foot.). Legal-size clip board or the equivalent. Graph paper calibrated 10 squares per inch is essential to accurately drawing a structure. Without graph paper, the corners sometimes do not meet; a sure sign of measuring problems. Pencil with a good eraser (a spare pencil is always a good idea). Comfortable clothes (shrubs can be very difficult on fragile clothing). A Phillips-head screwdriver for securing the hook (at the "dumb" end) of your measuring tape into the ground. A yardstick or "wooden carpenter" rule for depth measurement.

Environmental inspection

This inspection looks at environmental issues such as radon, asbestos, lead-based paint, underground storage tanks or contaminated water. We discussed these issues in an earlier chapter. If the seller is aware of any problems that these inspections might reveal, the seller needs to list them on the property disclosure form. Problems can affect the price of the property.

One and a Half Story Homes

This style is characterized in this market by a second story significantly smaller than the first story. It is also possible to have the reverse, where the second story is somewhat larger than the first, but that style is seldom seen in this market. The major difficulty in measuring the 1-1/2 story house is that the location of some of the second floor exterior walls is not always apparent from a visual observation. When this is the case, the only way to determine the shape of the upstairs is from a walk around the interior of the second floor. Take a great deal of care when drawing the shape of this floor, as the location of closets can be confusing. Open all doors. It is very easy to confuse an attic access door with that of either a closet or bathroom. The best method for measuring an upper story is to place a clean sheet of graph paper over the first floor perimeter drawing. From an exterior view try to place the second floor on top of the first floor by matching corners and exterior walls. A very good clue is the location of the stairwell. Draw dots/dashes on the top graph sheet where the second floor appears to sit on the first floor. Once all information has been obtained from exterior inspection, go inside to complete the second story dimensions.

Conversations To Avoid

To help avoid actions which might be construed as discriminatory, even though they may be unintentional, there are some guidelines that licensees can follow. Never indicate, either by direct statement or by implication, that having someone who is a member of any of the protected classes move into a neighborhood could or would impact that neighborhood by Lowering property values Changing the composition of the neighborhood Making the neighborhood a more dangerous place Causing a decline in the quality of the local schools

Multiple Story Homes

Two-Story Houses - An actual two-story house is relatively easy to measure because the second floor is exactly the same size as the first floor and is located directly above the first floor. All that has to be done is to accurately measure the first floor and multiply that measurement by two. True two-story houses are rare. Instead, some variation of the story-and-a-half house is more often the case.

Specifying Property Type

Under the Exclusive-Right-to Buy Contract, the buyer is required to specify the type of property for which he or she is looking. The buyer should be specific as to the description of the property covered by the agreement. The description should include the nature of the property - whether single family, townhouse, condo, etc.; the maximum price for the property, general location and other details.

Broker as Buyer (cont.)

Unless one of the situations mentioned on the previous screen exists, licensees are not required to use the Buyout Addendum. The term "licensee", as used above, refers to the individual licensee who has personally taken a listing or to the listing broker or brokerage entity if the buyout is to be accomplished by that broker or brokerage entity. If the listing licensee or broker desires to acquire a listed property solely for personal use or future resale and not as an inducement to the owner, the licensee or broker is advised to do all of the following: Clearly sever their agency or listing relationship in writing Renounce the right to any commission, fee or compensation in conjunction with acquisition of the listed property Advise the owner to seek other assistance, representation or legal advice. Future resale of a purchased property, as referred to above, means resale to a third party purchaser with whom the licensee has not negotiated during the listing period. Resale to a person with whom a licensee has conducted previous negotiations concerning the subject property during the listing period (often referred to as a "pocket buyer"), would constitute a violation of Colorado law in the absence of full written disclosure and acknowledgment by the owner.

Exercise Care in Listing Presentations

When doing a listing presentation, it's important for a licensee to go over the fair housing laws with the prospective seller. The licensee must stress to the seller that he or she will adhere strictly to those laws. It's also critical that the seller agree to comply with antidiscrimination laws. If a seller will not make that commitment, the licensee should refuse to take the listing. The licensee should also refuse the listing if the seller makes comments that imply that he or she would act in a discriminatory way.

Pricing and Motivation

When making a presentation to a prospective seller, you must present information as to your opinion of value. You will already have done your comparable market analysis, and it should be part of your presentation package. When discussing the pricing of the seller's property, give the seller a firm price. There is no advantage to giving the seller a range; they will always select the highest figure. Give them the number you would recommend. It is also a good idea to have worked up a net proceeds worksheet that shows what the seller can expect to receive from the sale of the home after all the closing costs and expenses are deducted. We have already completed a Worksheet in a prior Chapter, so you can use the Worksheet to figure out the net proceeds. It will be an estimate, of course; be sure to let them know that. To review, seller expenses usually include Broker commission Title fees, such as for clearing the title Title insurance for the buyers (owners) Fees for preparing the deed Attorney fees Excise tax These lists give you an idea of the items that are typically debited or credited to the seller.

The Drawing

When you have completed measuring the house and recording the measurements on your field drawing, the next step is to divide the drawing of the house into geometric shapes. Fortunately, the two most often found shapes are the rectangle and the triangle. Note: It is probably a good idea to make a copy of the sketch before you begin to divide the figure into geometric shapes - just in case you think of an easier way to divide it after you begin. When you are satisfied that you have divided the floor area into the best pattern of geometric shapes, number the shapes. At the bottom or side of the measurement sheet, list the numbers that designate the shapes comprising the living area in one column. Beside each number, write in the measurements of the designated shape in a second column. Using a calculator, compute the square footage of each shape and record it in a third column beside the measurements. Then total the square footage column. The total from that column is the square footage of the living area of the house. Remember, the area of a rectangle is L X W; a triangle is B X H divided by 2. Repeat the procedure above to calculate the remaining area of the house (porches, carport, etc.). When you have completed recording the square footage on the MLS worksheet, staple the sheet with your drawing and calculations inside the listing folder. You will have a ready reference in the event that your measurements and/or calculations are questioned. Note: Many experienced agents prepare in advance a label with the three column headings printed on it so that when listing a house they simply peel one off the sheet and apply it to their drawing sheet.

Property Disclosures: Seller's Property Disclosure Form (SPD19-10-011) & (SPD29-10-11)

When you meet with the seller to sign the listing agreement, be sure to take the Seller's Property Disclosure Form (SPD19-9-08) for all types of properties of Seller's Property Disclosure Form SPD29-9-08 for residential property. The form is on the DORA website. It is a 7-page document that covers possible defects in the property. The seller must disclose known defects. Failure to disclose a known defect can result in legal liability for the seller. If the seller refuses to complete a Disclosure Form, strike it from the listing agreement and explain to the seller that the buyer's broker and/or buyer will probably require it from the seller. Explain to the seller that the form must be filled out in its entirety and that the contract, not the disclosure controls what it included in the sale. The disclosure form is for the purpose of fully disclosing to the buyer the condition and presence of features in the house.

The Listing Appointment

You'll want to bring all of the following items to the listing appointment with you: Listing Presentation Manual Comparative Market Analysis Listing Agreement Form Agency Relationship Pamphlet Estimated Seller Proceeds Form