Ohio Market Watch: Inventory of homes for sale remains tight

By Greg Stitz, OAR Director of Research

The Ohio Association of REALTORS’ latest Housing Market Confidence Survey reveals a reported increase in the number of homes on the market by one-third (36 percent) of respondents. Survey participants were asked to indicate any noticeable change with regard to the number of homes on the market in their area. 46 percent noticed a slight or significant decrease in the number of homes, one-third (36 percent) noticed a slight or significant increase and 18 percent noticed no change at all.

Survey results are based on responses to a monthly survey, designed to capture the effects of the existing economic conditions and trends on the real estate industry, sent to a pool of 1,500 OAR participants. Click here to participate in future OAR Housing Confidence Surveys.

Tags: Ohio Market Watch, research

Ohio’s REALTORS bullish about the current housing marketplace

By Carl Horst, OAR Director of Publications/Media Relations

The mood within the ranks of Ohio’s real estate professionals about the current state of the housing market has reached its highest level of the year, according to the latest tracking survey by the Ohio Association of REALTORS.

The findings of our July Ohio REALTOR Confidence Index show a seven point gain from the June results, pushing the “current condition” score to 72. The mood regarding the market’s long-term outlook and the potential movement of home prices remained steady, at 66 and 73 respectively.

Looking back to July 2013, the overall sentiment of the current marketplace increased two points.

 

Ohio REALTOR Confidence Index

July 2014 June 2014 Difference
Current Housing Market 72 65 +7
Housing Market (Next 6 Months) 66 66
Home Prices (Next 12 Months) 73 73

 

It’s worth noting that the industry’s views are significantly more bullish than what REALTORS say exists among their buyers and sellers. While the profession’s views of the current market reached their peak in July, REALTORS say the mood of buyers and sellers stands at 59 (down one point from the June 2014 score of 60).

Survey results are based on responses to a monthly survey, designed to capture the effects of the existing economic conditions and trends on the real estate industry, sent to a pool of 1,500 OAR participants. Click here to participate in future OAR Housing Confidence Surveys.

 

Tags: Ohio REALTOR Confidence Index, research

Ohio housing sector heats up in June; marketplace posts gains in number of homes sold & average price

By Carl Horst, OAR Director of Publications/Media Relations

The number of homes sold across Ohio in June increased 4.7 percent from the level posted in May, according to the Ohio Association of REALTORS.

Home sales activity in June increased slightly from the level reached during the month a year ago, recording a 0.1 percent increase.

“Through the mid-point of 2014 the Ohio housing market has been able to display stability in the overall level of sales activity and steady growth in pricing,” said OAR President Chris Hall. “It’s evident that we’ve made significant progress in building a solid, stable foundation for the state’s housing sector, one that is able to withstand the certain ebbs and flows that will occur due to market conditions.”

June’s average home price of $163,711 reflects a 1.2 percent increase from the $161,846 mark posted during the month last year.

Sales in June reached a seasonally adjusted annual rate of 132,464, increasing 4.7 percent from the 126,564 level posted last month. The market also experienced a 0.1 percent increase in sales from June 2013’s seasonally adjusted annual rate of 132,338. Sales during June 2014 reached the highest level for the month since 2007.

Around the state, 13 of the 20 markets tracked reported increases in sales activity levels or remain unchanged during the month. All but five local markets showed an increase in average sales price.

Home sales during the second quarter were up from the first quarter, but were down slightly from the same period a year ago. Specifically, second quarter 2014’s seasonally adjusted annual rate reached 127,178, a 9 percent increase from the first quarter mark of 116,660. Activity in the marketplace during the quarter declined 1.4 percent from the second quarter 2013 level of 139,038. Second quarter 2014 dollar volume of $5.6 billion is up 1.0 percent from the same period last year.

Data provided to OAR by Multiple Listing Services includes residential closings for new and existing single-family homes and condominiums/co-ops. The Ohio Association of REALTORS, with more than 27,000 members, is the largest professional trade association in Ohio.

Click here to view OAR’s seasonally adjusted Ohio home sales report. To access a market-by-market analysis of sales activity throughout Ohio, click here.

Tags: home sales, research

Legally speaking: What does Ohio license law say about…?

By Peg Ritenour, OAR Vice President of Legal Services/Administration

The OAR Legal Assistance Hotline receives an array of real estate-related legal questions — including license law issues, disclosure, contract law, ethics and commission problems, among others. In an effort to help you work within the law, our “Legally Speaking” series spotlights some of the timely questions that are being asked by REALTORS. The following are some of the most frequently asked regarding license law…

I am moving to another state. Can I still maintain my Ohio real estate license?
A: Yes. Residency in Ohio is not required to be licensed here.

A salesperson from another brokerage has submitted an application to transfer her license to my company, but it has not been processed yet. Can she go on a listing presentation for my company, if another agent or manager from my company goes with her?
A: No. A salesperson can only act on behalf of a brokerage when the Division of Real Estate has actually issued a license in the name of the new broker. Therefore, the agent should not make listing presentations or do anything on behalf of the new brokerage until her license has actually transferred to that new company.

One of my sales agents wants to handle the rental of a duplex his father owns. My brokerage doesn’t do property management. Can he do this on his own?
A: The leasing or managing of real estate for a fee, commission or anything of value, is activity that requires a real estate license. Therefore if the agent is being compensated for leasing or managing this duplex, this activity must be done in the name of his broker. The fact that the property is owned by a relative does not matter.

Can I pay a finder’s fee or give a free month’s rent to tenants who refer other prospective tenants to me?
A: No. Referring a prospect for the lease, purchase or sale of real estate for a fee or anything of value is conduct that requires a real estate license. Therefore, this tenant may not legally accept a finder’s fee or free month’s rent and a licensed agent or broker my not pay an unlicensed person for such conduct.

Do real estate agents licensed with my brokerage have to purchase and sell their own property through my company?
A: There is no legal requirement that agents purchase or sell their own property through the broker with whom they are licensed. However, a broker can require this as a condition of working for the brokerage. If a broker wants to impose this requirement upon his agents, it is advised that this be set forth in the independent contractor agreement with the agent and/or in the broker’s policy manual.

Am I responsible or liable for my agent’s personal real estate transactions if they are not “run” through my brokerage? Does my agent have to provide me with copies of the documents involved in these transactions?
A: If the property is not listed with your brokerage and you are not otherwise involved in the sale, rental or purchase of the property, you and/or your company should not have any liability for these transactions. To avoid any claim that your firm is involved with or responsible for these transactions, you should make sure that your agent is not using purchase contracts, leases, etc., that bear your brokerage name, logo, etc., or reference “broker” any way (i.e. earnest money deposit sections). Further, because these transactions are not being handled by your brokerage, the license law does not require you to maintain copies of the documents involved in these transactions.

Are attorneys exempt from the real estate licensing requirements?
A: Ohio Revised Code Section 47235.01 (K) provides that an attorney is exempt from the requirements to be licensed if the conduct he is engaged in is part of the performance of his duties as an attorney. Examples of situations that would fall under the exemption would be an attorney who is selling property that is part of an estate or liquidating property as an asset in a bankruptcy proceeding.

Can I use an unlicensed person to serve as a host or hostess at an open house?
A: A real estate license is required of anyone who assists in the procuring of prospects for the sale of real estate. Because the purpose of an open house is to capture prospects to buy the house, generally only licensed persons should represent the brokerage at an open house. An unlicensed person may be present only to greet persons and may not answer any questions or provide any information.

Can an unlicensed person solicit business for the brokerage by providing information on the brokerage and brokerage services to potential clients and customers?
A: No, this activity requires a real estate license.

If a broker has decided to close his company and activate his sales license with another brokerage, can listings with the broker’s company be taken to the other brokerage?
A: No. Listing agreements are personal service contracts and are only assignable with the consent of the seller. The sellers would have to either sign such an assignment or enter into a new listing agreement with the other brokerage.

Tags: legal, Legally Speaking

RESPA violations result in hefty penalty

Does your brokerage have an affiliated business such as a title company or mortgage brokerage? If so, the following RESPA case is a “must read” to make sure you aren’t running afoul of the RESPA disclosure requirements.

By Lorie Garland, OAR Assistant Vice President of Legal Services

The Consumer Financial Protection Bureau (CFPB) recently entered into a Consent Order with RealtySouth, a large Alabama real estate brokerage, over the affiliated business arrangement disclosure form (Disclosure Form) the brokerage used when referring consumers to their affiliated title company, TitleSouth, LLC. RealtySouth was ordered to pay a $500,000 civil penalty for failing to comply with the Real Estate Settlement Procedures Act (RESPA) requirements.

RESPA prohibits the giving or receiving of a fee or “thing of value” for referring a consumer to a settlement service provider (lender, real estate broker, title company, etc.). RESPA permits settlement service providers that have an affiliated business arrangement (joint ownership) to make referrals between affiliated companies as long as:

  1. certain disclosures are made to the consumer at the time of the referral,
  2. the consumer is not required to use the affiliated company, and
  3. the only “thing of value” received for the referral is a return on their ownership interest.

RESPA Appendix D to Part 3500 provides a model disclosure form that fulfills the RESPA disclosure requirements. The model disclosure form requires information to be provided on the business relationship between the companies, the estimated changes for the settlement service provided by the affiliated company and the fact that the consumer is not required to use the services of the affiliated company. A disclosure form must provide the following language and typography:

Set forth below is the estimated charge or range of charges for the settlement services listed. You are NOT required to use the listed provider(s) as a condition for [settlement of your loan on] [or] [purchase, sale, or refinance of] the subject property. THERE ARE FREQUENTLY OTHER SETTLEMENT SERVICE PROVIDERS AVAILABLE WITH SIMILAR SERVICES. YOU ARE FREE TO SHOP AROUND TO DETERMINE THAT YOU ARE RECEIVING THE BEST SERVICES AND THE BEST RATE FOR THESE SERVICES.

Upon investigation of RealtySouth’s referral practices, the CFPB determined that RealtySouth’s referrals to TitleSouth violated RESPA based on the following findings:

  • RealtySouth strongly encouraged its agents, and in certain instances, required their agents to use TitleSouth.
  • From March 2011 until May 2012, RealtySouth had a preprinted purchase contract that directed title services to TitleSouth. In 2012, RealtySouth changed the language in the purchase contract to allow consumers to check off TitleSouth or “other.”
  • RealtySouth’s Disclosure Form did not meet RESPA requirements as it did not use the format of Appendix D. It did not use capital letters and set apart the language informing consumers that they can shop around for services.  Instead, this language was hidden in a list of descriptions for seven affiliated companies. RealtySouth’s Disclosure Form also included marketing statements touting the benefit and value of the affiliated companies. When the CFPB notified RealtySouth of its concerns with the form, RealtySouth immediately changed its form to address those concerns.

In addition to the $500,000 civil penalty, the CFPB ordered RealtySouth to ensure that its Disclosure Form be in the format of Appendix D with no additional marketing statements and that its agents be trained that they cannot require the use of any affiliated company.

Tags: legal

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