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September 30, 2010

Investigation Finds Majority of Agents Fail to Properly Disclose Agency Relationship

An investigation into real estate industry practices conducted this past summer by the Massachusetts Division of Professional Licensure (DPL) has uncovered a high degree of non-compliance with the state’s agency disclosure regulation [254 CMR 3.00: Section 13.].  According to a news release issued by the DPL, investigators posing as consumers visited over 200 real estate offices across Massachusetts, and just 6 percent of the agents they met with properly disclosed to the testers whose interests they represent.  Nine out of 10 agents, or the other 94 percent of licensees who were visited, failed to present the Massachusetts Mandatory Licensee Consumer Relationship Disclosure form as required under the law.

First enacted in 1990, the current agency disclosure regulation stipulates that notification in writing as to whose interests the licensee represents – the buyer or seller – is to “be provided to a prospective purchaser or seller at the time of the first personal meeting between the prospective purchaser or seller and the broker or salesperson for the purpose of discussing a specific property.”  Failure to do so can result in the loss of one’s license to practice real estate, and, in fact, all those who were found to be out of compliance with the agency regulation during the DPL investigation have been sent warning letters informing them that further non-compliance could lead to suspension or revocation of their license.

Although it’s unknown what comments, scenarios or methodology were used by investigators to conduct the field survey and measure agent compliance with the regulation, what is clear is that all REALTORS® would be wise to increase their level of awareness and understanding of the agency law, particularly their responsibilities as it relates to the consumer disclosure requirements.  The GBAR Education Committee will be convening shortly to explore programming initiatives to meet this need.

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New Minimum Credit Scores Announced for FHA Loans


 

Earlier this month, the U.S. Department of Housing & Urban Development issued Mortgage Letter 10-29 which announced changes in its minimum credit score requirements that will take effect in early October.  Effective October 4, 2010, borrowers with a credit score below 500 will not be eligible for Federal Housing Administration (FHA)-insured mortgage financing.  In addition, borrowers with a credit score between 500 and 579 will be limited to 90 percent Loan-to-Value financing, which requires a 10 percent down payment.  Borrowers with a credit score of 580 or higher will be eligible for maximum financing, which does feature a 3.5 percent minimum down payment requirement.

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National Flood Insurance Program Gets Extension Thru September 2011

This past week both the U.S. Senate and House of Representatives passed H.R. 3814, legislation which authorizes a one year extension of the National Flood Insurance Program (NFIP) until September 30, 2011.  The bill is now headed to President Obama who is expected to sign it. 

It was just a few short months ago that the NFIP was actually allowed to lapse for a brief period during the spring market, which caused major disruptions for homeowners, prospective home buyers, and REALTORS® negotiating property transactions.  Congress ultimately did step in to approve a short-term re-authorization of the flood insurance program through September 30, 2010, but the passage of H.R. 3814 will provide an even greater level of certainty in the market over the coming months.

A long-term extension of the NFIP is really what is needed however and the National Association of REALTORS® (NAR) continues to make this issue a top legislative priority.  Although initially encouraged by the passage of H.R. 5114, legislation which includes a provision to extend the National Flood Insurance Program to September 30, 2015, NAR officials now believe the Senate is unlikely to act on the measure before it adjourns for November elections.  Therefore, it is unlikely a comprehensive reform bill providing sound financial footing for the NFIP will move until Congress reconvenes in 2011.

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Vote to Approve New GBAR Bylaws Scheduled for October 25

A newly-proposed set of association bylaws will be presented for approval on October 25 at 12 noon at the Annual Meeting of the GBAR Board of Directors.  The comprehensive re-write of the association’s bylaws was completed over a 10-month period by a presidential advisory group of seven members, chaired by William Dermody, of Coldwell Banker  Residential Brokerage in Needham, and assisted by GBAR counsel.  The newly-drafted bylaws document integrates new Articles and language that mirror the National Association of REALTORS® Model Bylaws, including provisions that address Use of the REALTOR® Trademark Terms, and State & National Membership.  In addition, it includes an enhanced Article on Membership that more fully details membership types; new Articles addressing the qualifications, privileges and obligations of GBAR/GBREB and REALTOR® Membership; and provisions that provide for the electronic transaction of business as well as attendance by phone or video conference at meetings of association committees and the board of directors in order to conduct business.

The general membership meeting will take place at the Greater Boston Real Estate Board (GBREB) offices at One Center Plaza in Boston.  Registration in advance is requested and may be made by calling Sandy Cravines at 617-399-7853 or e-mailing scravines@gbreb.com.

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Housing Demand Eases in August, But Gr. Boston Home Prices Continue to Climb

Housing prices in metropolitan Boston continued to strengthen last month despite a softening in buyer demand due to the weak labor market, more stringent lending requirements for home mortgages, and the end of the federal home buyer tax credit. 

The median selling price for a detached single-family home increased 5.4 percent in August compared to the same month last year to $490,000.  It’s the sixth consecutive month – and tenth time in the past 12 months – that the monthly median home price has improved on an annual basis across the 54 cities and towns in GBAR/GBREB jurisdiction.  In addition, the median selling price has climbed 40 percent from its nadir during the recent market correction, which occurred in March 2009 when the median price of a single-family home in Greater Boston fell to $350,000.

The condominium market experienced an even stronger rebound in prices over the past year, with the median selling price up 9.3 percent in August from the same month last year to $372,000.  This equals the all-time high monthly median selling price for condos in Greater Boston which was first recorded in July 2007 (and also observed in July 2010).  Notably, the median selling price has risen 37 percent since January 2009, when the monthly median price fell to a low of $270,000 in the recent market correction.

The healthy jump in home prices comes despite a second consecutive month of double-digit declines in sales volume in both the detached single-family home and condo markets.  In fact, sales of single-family homes fell 17 percent over the past 12 months to their lowest August sales total in 15 years.  Condo sales also fell sharply in August, declining 20 percent from the comparable month last year to their lowest level in eight years.  However, in a positive development, the number of condo units sold last month improved 20 percent from July, an indication that this market remains attractive to empty-nesters, second-home owners and investors.

For more August data and analysis on the housing market in greater Boston, visit the Monthly Housing Reports page on gbar.org.

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Volunteers Sought to Serve on GBAR Committees in 2011

Are you interested in becoming more actively involved with the REALTOR® organization?  Then we invite you to apply for an appointment to one of nearly one dozen association committees that have openings for GBAR members in 2011.  Participation as a committee member affords you the chance to become part of the association’s decision-making process, and also provides the opportunity to network regularly with REALTORS® and affiliate members from communities all across eastern Massachusetts.  To be considered for a 2011 committee appointment, simply complete our online Committee Volunteer Request Form by November 1, 2010.  You’ll find a description of each committee’s purpose and anticipated frequency of meetings in a document linked within the Committee Volunteer Request Form.  For questions, call GBAR at 617-423-8700.

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GBAR Fall Furniture Drive will Benefit Homeless

This fall, the Greater Boston Association of REALTORS® will conduct its Third Annual Furniture Drive to benefit the Massachusetts Coalition for the Homeless (MCH), the association’s designated charity.  Organized and coordinated by the GBAR Community Service Committee, the furniture drive has generated over 25 truckloads of household goods for needy families in its first two years.  In addition, nearly $40,000 in grants and charitable donations have been donated by GBAR and its members to support the Coalition and its mission since 2007.

GBAR members, their clients and customers, and family members of REALTORS® can arrange for a pick up of furniture and other household items that are in good condition during the week of November 8-12 by sending an e-mail to mahomeless@olympiamoving.com.   For those unable to donate items during the week-long furniture drive, a drop-off of items can be scheduled for later this year to the Coalition’s warehouse as part of GBAR’s Furnish the Future campaign, a year-long partnership with Olympia Moving & Storage and the MCH that is aimed at helping individuals and families transition from homelessness to permanent housing. 

Established in 1981, the MCH is the nation’s oldest statewide homeless advocacy organization and annually assists over 2,000 households transition from shelters, motels and other temporary housing to a home of their own.  For questions, contact GBAR Communications & Marketing Assistant Kate Reynolds at keynolds@gbreb.com or 617-399-7840, or watch for an informational e-mail from GBAR in the weeks ahead.

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Five GBAR Members Accepted Into MAR Leadership Academy

Nearly one half dozen GBAR members have been accepted into the 2010-2011 class of the Massachusetts Association of REALTORS® (MAR) Leadership Academy.  The Leadership Academy is a training program that allows participants to develop strong leadership and life skills, including goal-setting, networking and communication skills, through individual study, group sessions, and team-building exercises. 

The local REALTORS® from Greater Boston participating in the new Leadership Academy class are: Greg Kiely, of William Raveis Real Estate in Chestnut Hill; Joanne Paleo Taranto, of Prudential Wilmot Whitney Real Estate in Weston; Ana Portillo, broker-owner of Global Gateway Realty Group in Arlington; Andrew Sarno, a current GBAR Director and agent with ERA Andrew Realty in Medford; and Joseph Schutt, the current chairman of GBAR’s Technology Committee and agent with Gibson Sotheby’s International Realty in Boston.

 We extend our warm congratulations to all five members accepted into the MAR Leadership Academy!

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MAR Conference and Tradeshow | October 18-20

Only a few weeks left to register!  Don’t miss the Massachusetts Association of REALTORS® 2010 Conference & Tradeshow. Earn your CEs, learn about latest advances with Tech/Marketing classes, meet over 50 of New England’s leading businesses, attend the largest General Session in MAR history and much, much more.