Everyone hates the dreaded offer rejection form. I think it is the most worthless form in real estate and it only serves to cost you more time and liability. However, it is required by law so you better be sending them out. Here are the five ways that most agents are screwing up the Offer Rejection Form. Understand that each of these could result in you having a grievance filed against you. As buyers and buyer's agents become more desperate to find houses in this tight market you don't want to give anyone a reason to file a grievance against you.
Also, in this episode is an Extra Value Sized edition of What Happened While You Were Out Showing as well as Gary's Good News Only!
Enjoy, but don't forget to subscribe!!!!
Gary
* Gary serves on the South Carolina Real Estate Commission as a Commissioner. The opinions expressed herein are his opinions and are not necessarily the opinions of the SC Real Estate Commission. This podcast is not to be considered legal advice. Please consult an attorney in your jurisdiction for applicable legal advice germane to your issue.
Everyone hates the dreaded offer rejection form. I think it is the most worthless form in real estate and it only serves to cost you more time and liability. However, it is required by law so you better be sending them out. Here are the five ways that most agents are screwing up the Offer Rejection Form. Understand that each of these could result in you having a grievance filed against you. As buyers and buyer's agents become more desperate to find houses in this tight market you don't want to give anyone a reason to file a grievance against you.
Also, in this episode is an Extra Value Sized edition of What Happened While You Were Out Showing as well as Gary's Good News Only!
Enjoy, but don't forget to subscribe!!!!
Gary
* Gary serves on the South Carolina Real Estate Commission as a Commissioner. The opinions expressed herein are his opinions and are not necessarily the opinions of the SC Real Estate Commission. This podcast is not to be considered legal advice. Please consult an attorney in your jurisdiction for applicable legal advice germane to your issue.
This is edition dirt with Gary pequin, South Carolina's only podcast dedicated to the real estate agents craft. And Greetings everyone. Welcome back to yet another exciting week edition dirt. I am your very talented, often opinionated, and sometimes verbose host Gary Pickering with yet another tantalizing episode of edition dirt. But what could be more fun than waking up or working out to the sound of my voice, discussing all the woes and limitations that are real estate? This week's class comes from the broker class that I taught last week, and I realized just how badly that real estate agents are handling the offer rejection form. So we're going to talk about that and the top five ways that you guys are just constantly screwing this thing up. We're also going to have a little bit longer segment on what happened while you were out showing and I'll do my normal Gary's good news only with a lot of good COVID vaccine news. But before we start, someone asked me the other day exactly how many listeners are you getting to your silly little show? And I think he was thinking I'd say four or 5678 people. But believe it or not, we're actually now averaging about 500 listeners per week. And in case you're wondering how far of a net that this cat this show actually cast, I think you might be amazed that it actually reaches people in Europe and Asia have several people that listen to the show regularly over there. I think they're mainly service members who are looking to move to South Carolina, but also wanted to give a big shout out to those that are listening constantly in Centennial, Colorado, Atlanta, Georgia, whew, Ohio, Lake Stevens, Washington, San Jose, California. So you guys that are listening outside of South Carolina, keep it up. I really appreciate you guys listening to us and helping make this show what it is today and helping it to grow. So once again, if you like us, please like us, share us and subscribe and let all the other real estate agents know whether they're in South Carolina or otherwise, about our shows, so we can continue to offer you great content. So today we're going to talk about this offer rejection form. And let me just start off by saying, I absolutely hate the offer rejection form, I think is probably one of the dumbest things I've ever come out in real estate there. I said, I don't know who the ad genius was behind this one. The premises is this, that you guys aren't presenting offers, is what they believe. And so the legislature felt that if they would just create a form for you to sign saying that you've presented the offer, he would just make everything all right. But here's the sad truth about that. Any agent who's not presenting offers, is not going to hesitate to sign the stupid form saying that they did present the offer. This is not going to dress address anything, it's not going to fix anything, because those same bad agents who are not presenting offers, are now not presenting offers and signing a form saying they did. How does that change anything, nothing's different. I don't understand why anyone ever thought that this form would do anything except add more work to you. And that's the bigger problem. I feel that this offer injection form does nothing but creates more work for you, the honest agent that is and it creates more liability for you as well. What I mean by liability is not necessarily liability towards your client, but liability under the wall 40 das 57. Now, I have already had to defend real estate agents before on this form, if you want the grievance was is that they did not send it off a rejection form. And it's a very difficult case to defend because either you sent it or you didn't. And so if you didn't send the form and you have a grievance against you, it's very difficult for me to defend you against that. All I can say is yes, but here's why. And that's not usually a very good way to defend somebody before the real estate commission. I can easily see and understand in today's climate, how you could miss that. I mean, you're only getting, I don't know, 4812 offers per listing, right? I mean, it's outrageous what's happening, really, you're averaging I think somewhere between 1020 or 30 per listing. So I can understand it being very easy to miss one or you being just so busy that you don't have time to respond to 30 offers that are all outrageously low when everything is going above market price. And people are coming in 15 20% below market, I can understand why it's tempting just to ignore that offer and not make the offer rejection form or send the alpha rejection form. But that's why this is so important because I do believe in this atmosphere that we're in that people are very upset right now. People are mad. they've submitted eight 910 offers and they haven't been able to win a house yet. Real estate agents have a stable of buyers that are just willing and able to buy a house but they can't find them anything. And when you have agents that rely mainly on buyers and don't have listings, that is their income. So imagine if you're here a buyer and you continue continually and constantly submit offers for your buyers, and you're not hearing back from the other side. how angry that would typically make you as an agent, particularly when that is your income that is your livelihood. So I certainly understand how the buyer's agents are getting fed up. I understand why the seller's agents are getting fed up because it is additional work and is bad For the buyer's agents, because they're not getting any information back to find out why their offers aren't being accepted. So I understand both sides of it. I don't understand at all how this form is going to do anything to protect it. So you have to understand you've got to be able to prepare, be prepared to prove that you sent the form. Because if a grievance is filed against you are hopeful answer is, oh, they're mistaken. Here's the email. And here's the form we sent out. But outside of that, if there's a grievance against you for that, it becomes a very difficult case for us to defend. So be prepared, have that forms on set, and keep a copy of it so that you can prove it. Now several agents have asked me in the past, well, wouldn't it just fix the whole matter if we just asked the sellers to sign this disclosure form? Well, first of all, under 40 dash 57. That is the real estate law and how it affects real estate brokers and salesmen and property managers. Notice I didn't say sellers, the jury, they have no jurisdiction over the seller for that statute. 40 dash 57 only pertains to real estate licensees and their brokers. It does not pertain to seller so they have no jurisdiction over the seller, and they can't make them do anything the seller doesn't want to do. Let's go ahead and suppose for one second, that there was jurisdiction over the seller, what are you going to do fight? I mean, they're going to have hearings every day on how many times the sellers didn't sign it and find the seller $25? Who's going to police that and how are they ever going to collect the money? But more importantly, I'm glad they don't have sellers on this thing. Because Could you imagine in today's market where every offers above ask and somebody comes in at half price that you'd have to present that offer to your seller and have your seller sign that they don't want to counteroffer they're already mad that such a bad offer came in. Or imagine a scenario where we weren't in this type of market and the house has been on the market for almost a year and they already talked about they want to fire you and then you finally get a terrible offer. And and you have to call these people on vacation, ask them to please go up to the hotel, get off the beach, sign the document, and then fax it back to you. I can only imagine how many cuss words would be levied at you in that situation. So let's look at the law what the law actually says. So there's several statutes here that actually control this 40 dash 57 135 h one says upon receipt prepare all offers in writing and properly present them to the seller 135 l four says a licensee offers things offering services to a customer shall tonally present all written offers to and from the parties involved in the sale lease and exchange of property even when the property is subject to a contract of sale. And then 135 four says that a brokerage charge shall ensure that association associated licensees prepare all offers and counteroffers in writing have them dated and signed by the offer wars and properly present them to the offerees or the authorized representative. So we have three different statutes that talk about promptly and timely presenting offers not only the buyer's agent tonally presenting them once they are signed, but also the selling or listing agent rather that they are presenting these offers timely once they are presented as well. So it is very important that you understand that anytime you receive an offer, you must present the offer timely to the buyer for for the buyer to the seller. And then the most important part is 4057 135. Five says if an offer is rejected without counter and offer rejection form promulgated by the Commission signed by the licensee affirming presentation, the offer must be provided to the offer or by the licensee whether the agent or the buyer, the seller or if acting as a transaction broker. So do you think they mean serious business about that? And did you notice that the language in the form is mandatory, it uses the word must, it doesn't say you may do it, or you should do it. It's mandatory language, you must do it. So understand. This real estate commission is very serious about this form. It has consistently been in our legal education. So they are going to punish you if you're not doing this, and somebody decides to turn you in. The easiest way to understand all four rejection form is this. a buyer should get one of three responses from myself, when they present a contract either a written acceptance of that contract, a written counter offer that contract or an offer rejection form. As long as you understand that there has to be one of those three things going back to a buyer making an offer, you should be good to go. Now, let's also examine when you must present the offer because I think that is also very important in this discussion. They've used words promptly and timely. So what does that mean? It's case specific, but I say use your common sense. If you're in a listing meeting with another and an offer comes in, do you need to stop the listing meeting and go present the offer? No. If you're it during an MC or C class that we're teaching, you need to get off the class and go present the offer. No, that's not Tom Lee promptly that's not necessary. It's unreasonable. But waiting to the next day or waiting until other offers are coming in. That's an absolute No, no, you can't wait and call offers, you can't decide when you want to present the offer. When you get all four you need to do as soon as reasonably possible present that offer to your client. Now your client can decide to wait to respond. But you cannot wait to present too many in this industry are saying in MLS right now that they're not going to present offers until the end of the week, you cannot do that that's a violation of the law. You can say I will present all offers when they are received and then state that my client has advised us that they will not respond to any offers until Friday at five o'clock Be sure to make sure that your expect expiration of the contract is not till after that time. Lastly, before we start with our countdown, no You do not have to submit for rejected counteroffers. The statute is somewhat unclear on that. But the Commission has ruled that you only have to submit the offer rejection form on the original offer and not on counter offers. So now let's look at the top five ways you guys are screwing up the offer rejection form, the number five way that you guys are screwing up the offer rejection form is not doing it. As I mentioned, the statute requires it mentions it multiple times throughout. There's no if ands or buts about it. I hate it, you hate it, we all hate it. But guess what you got to do it. So number five way in which you get in trouble for offer rejection form is simply ignoring the statute. And in today's environments, as buyers are more more frustrated, and buyer's agents become more and more frustrated, if you are not sending that form, it's a guarantee that when I'm gonna get mad at you at some point and file a grievance against you. And if you haven't filed the form with them and sent the form to them. Rather, there is absolutely no defense. It doesn't matter who's representing us, Johnnie Cochran and f lee Bailey combined, they're not going to get you out. Because the bottom line is they're going to ask us to send a copy of the form. And if you don't have it, you don't have it. And that's going to be actionable. And I think the days of the commission just simply giving you a way, warning on this issue of probably long gone. We've had the statute since 2017. Now over four years, and I think they are now to the point they expect you to know the law and abide by it. It's in our education classes. We've had it for multiple times in the education classes. There's no excuse now for not doing it. Number four, the fourth most common way that you guys are screwing up all four rejection forms, not using the prescribed form. The statute says an offer rejection form promulgated by the Commission. It does not say your email that's not promulgated by the Commission, your text messages, your phone calls, that doesn't count. And I had somebody call me the other day and said this top agent and they named the agent said they didn't have time for it. The email was good enough. No, it's not used a stupid form. The form is what you have to use, you don't get decide how you want to do it. When you want to do it, your office can't create a form you can't create a form you have to use the exact form that has been promulgated by the real estate commission, which by the way Asana does that job over to the real estate Real Estate Association, and they've done it. So there's no reason not to do it. Every one of you have copies of it's all in your zip forms and other form form banks. The number three way you guys screw up the offer rejection form is fizzbuzz. So let me see if you know the answer to this. A residential buyers presenting an offer directly to a fizbo. The owner is upset that the buyer did not offer full price and refuses the counter. Is the buyer agent required to complete the offer rejection form? The answer is yes, the buyer's agent is the presenting licensee. So even though you do not represent the seller, you have to complete the form because you are the presenting agent. Remember, the language in the statute says the agent presenting the offer. If the seller was represented, then the listing agent would present it and they would have to fill it out. But when the seller is not represented and you represent the buyer, you are presenting that offer to the seller. So you are the one that has to provide the no counter offer form back to your own buyer. Little bit screwing. A lot of people don't know that. So make sure you understand if you're dealing with a fizbo, you've still had to do that offer rejection form. Unfortunately, you may have to do it free to your client and not from your client. The number two way that agents are screwing up the offer rejection form multiple offers. Today you're getting 30 4050 offers per listing, how many of you are sending out this form each and every time to all of those that you're not countering? You should be it doesn't matter. There's no exemption or exception because there were too many. If you have offers period that you are not counting countering you have to send the offer rejection form. So I'm sorry that it's 40 offers today that you've received, count yourself blessed if you got 30 or 40 offers on a listing today be fortunate there were times I've been doing this for 26 years and they've been many times where we've had properties that you couldn't give away. If you go back just to the 2007 economic crisis in 2009 and 10. There were a lot of properties you could not give away regardless what price you put on them. So that is fortunate where we are today. I know it is time consuming, I know it's a pain in the butt. But you still have to send the offer rejection form to all of those multiple offers that you are not counting. And now the number one way that agents are screwing up the offer rejection form, and this one's gonna get you a little bit as well. When you get multiple offers and asked her best and final, you're in essence rejecting all the offers. So you have to send the form with a call for the best and final. So let me give an example. A broker has five purchase offers on a retail space that is located in a rapidly developing complex, the owner turns down three of the offers due to price and contingencies. They offer asked a sales agent to return the final two offers for best and final. And we'll review these two offers and any others that come in with the next three business days. How many offer rejection forms most you present as a licensee, most agents including myself would say three because you turned down those three offers and you asked her best and final from the other two. But the correct answer is five. Because in essence, you are turning down all five offers. You've declined all over with no power. And now you're asking them to come back with best and final you asking for best and final is not a counteroffer, that's a rejection. And now you're asking them to submit you another offer. So there you have it. Those are the top five ways that real estate agents screw up the offer rejection form, I reiterate, do not mess around with this form. It's very important. Make sure that you are completing it and sending it out every single time because if you don't, not much I can do to save you if you have a grievance over. And now let's move on to one of my favorite segments what happened while URL showing we actually have three of those for you today. Number one, Bloomberg is announcing that the administration is proposing to eliminate 1031 like kind exchanges for tax gains over half a million dollars. And what Bloomberg says is that these light kind exchange known as 1031 exchanges, as a person allows property investors to roll the proceeds of real estate sales into future purchases without paying capital gains taxes on the profits. The deferral process can theoretically continue indefinitely until the investors death. And if assets are passed to an heir, the capital gains bill is often wiped out, the strategy was projected to save the investors $41.4 billion between 2020 and 2024. According to Congress Joint Committee on Taxation, it does not break down how many of these would lose that benefit if the 500,000 in greater cap is put in. That's not good news for investors. Secondly, from the National Law Review on the same bill, but the administration has proposed eliminating this step up in basis at death. The result and this would change would be also elimination will the key advantages of the 1031 exchange allowing individual investors to essentially make the tax deferral payment permanent if they choose to hold it until they die. This could obviously have severe ramifications for estate planning and 1031 tax planning. Now from Yahoo Finance. Here's more on what they're saying about the housing market and what it looks like this year what they believe will happen next year. Number one, they say interest rates will remain relatively low. They say the pandemic has brought the lowest 30 year fixed rate mortgage in US history. It plummeted to 2.65% in January down from 3.6 for a year earlier and while it has climbed back to an average of 3.18%. At the beginning of April, it was back down to two point not eight by the end of April. Interest rates they say will continue to rise but remain low through 2021 and possibly into 2022. So that's certainly good news. Home inventory will increase the average total for sale housing inventory in the country for January was 855 excuse me 895,003 81 dropping to 822 790 in February and then 8080 71 in March. They expect the home inventory will increase but not at breakneck speed. It stands to reason that after selling the home May those sellers will turn around and buy another home. They also stated that we were in a unbalanced market where there is low inventory on homes available on multiple buyers on every property that is for sale and I know you all are seeing that no doubt. Also it will remain a seller's market in the coming year as vaccine continues to be administered businesses are reopening and unemployment claims continue to steadily fall consumer confidence is growing which means there are more sellers may start entering the market but we have to acknowledge that's not going to happen for a while so the seller market will last but how long it will we don't know it definitely will not be indefinitely. And then they also say two other things home prices will continue to climb January the medium home listed in the US was 330,500. It climbed slightly to 331,008 30 in February and a 338,008 30 in March. This continued pace, the median list price will reach 379,001 12 by the end of the year. It's an unbelievable figure. And lastly lumber prices will remain hard for Home Builders 2021 will be defined by a surge in material costs lumber prices have simply gone through the roof. One of my friends on Instagram posted how bad lumber prices were would cost to build a 2400 board foot deck which is a 200 square foot deck or also known 10 by 20 and April of 2020 it was $936 of lumber. Today the lumber alone 3696 sells out great. And that's what happened while you were out, shall I? Let's move over to Gary's good news only we have three economic news tidbits before we move into COVID. But before we start with the economic good news, wl TX has just announced that Lexington Richland school district five has decided to allow students and staff to choose if they want to wear a facemask becoming the first district in the middle is relaxed that roll. This bow numeral will go in effect on May the 10th. I hope other school districts are following what they're doing. That is certainly good news, moving forward for our children. And now back to the economic news. First for Market Watch pending home sales rebounded after two straight months of decline. But challenges still remain for the market ahead due to the lack of inventory. The index of pending home sales from the National Association of Realtors increased 1.9% in March. According to housing wire the total number of servicers loans in forbearance fail for the ninth straight week. That's certainly good news and housing wire also reported for the second consecutive week, mortgage rates managed to hold steady below 3% rising one basis point last week to 2.98%, according to Freddie Mac. Now, let's talk about COVID. What does the science say about the vaccine? What's the risk of getting it? What's the risk of passing it along to anybody else? Let's talk about the risk of getting the COVID vaccine. We certainly know it is possible to get COVID after the vaccine, most of them have about a 90% efficacy rate. But how likely is it really, so I'm gonna give you some stats, this will blow your mind. your risk of contracting the COVID virus is this 0.008% if you're vaccinated, your risk of being hospitalized, if you're vaccinated 0.00056% that is only 7% of those people who have gotten a vaccine who even got COVID that is your risk of being hospitalized and your risk of dying from COVID. If you've been vaccinated 0.00001% Let me put that to you another way 99.992% chance that you're not going to get COVID. If you're vaccinated, you have a 99.99944% that you won't be hospitalized, and your percentage chance of not dying from COVID. And this is a crazy number 99.99999% chance you won't die of COVID if you're vaccinated, that's simply astonishing. If you get vaccinated, you're not going to catch COVID, you're not going to be hospitalized, you're not going to die from it, which is probably why we're seeing so many states. Now finally open is probably why we're seeing CDC and New York Times and CNN and things of that nature saying that maybe we aren't going far enough on opening the answer to that question is absolutely we're not because if you have no chance of getting COVID dying from COVID or being hot even hospitalized from COVID, then there's no reason anything needs to be shut down or need to be wearing masks. Unbelievable. How So now the question is so we know it's almost impossible for you to get it to be hospitalized or died from it. But can you spread it if you are one of those point 00001 people present people? Can you pass it on? Three studies say you can't Well, the first one found that after one, not two, but one dose of Pfizer. The viral loads are 20 times lower than those people who aren't vaccinated. And then the Mayo Clinic in a UK study found that though the 85,000 people they routinely tested in healthcare it worked, that were vaccinated, it reduced their level of infection if they did get the infection by 85 to 89%. So once again, it's almost impossible to get it and it's nearly impossible to spread it. So it's time to follow the science once you get vaccinated, stop worrying. If you get anything, it's going to be extremely mild. And if you pass it on, it's gonna be even less than mom. So how low of a risk is transmission outside? From COVID? are researchers in Italy have used a new mathematical model to calculate the amount of time a person would take to become infected outdoors, and they use Milan they even use a grim scenario if 10% of the population was infected with the virus. It would take on average 31.5 days of continuous outdoor exposure to inhale a dose of Coronavirus sufficient enough to transmit infection. I've been to some concerts, some festivals, some ballgames none of them ever lasted 31.5 days. Worldwide scientists have also not documented a single case of outdoor transmission unless the people were close conversation. Not one Zilch none globally and that comes from students America, which is actually Very good podcast. Next from Becker's hospital review as a 6am may 3, a total of 312,500,000 vaccines have been distributed 246,780,000 have been administered, which is 79%. Additionally, 147,000,140 7,517,000 people have received at least one dose, which means they'll probably receive to at some point 105,523,000 have been fully vaccinated. That now means 44.4% of the entire US population has received at least one dose of the vaccine and 40 31.8% have been fully vaccinated. We're over halfway there on vaccination. Also in the state of South Carolina, for 4.5 million doses been distributed 3.3 million have been administered. Lastly, let's talk about the seven day rolling averages. I love these things. The current seven day moving average of daily new cases is 52,005 28. That is a decrease of 16.2% from the previous seven day average. And it's also compared to the peak is down from the 249,669 day peak of January eighth. that's currently a 79% decrease. Next, let's talk about the percentage of positive PCR test. Those have decreased from the previous week, the seven day average percent positivity from PCR test is now only 4.5%. That is down 3.1%. From the prior Seven Days NEW hospitalization emissions the current seven day average 5057 that is a 9.8% decrease from the prior seven day average of 5607. And that is also good to see because the numbers had been slightly increasing from March 22 till April 18. That's April 19. The seven day moving average has been lower compared with the seven day moving average in the prior week. Current seven day average is 628 deaths, which is a decrease of 8.2% compared to the last number which was 684. So that's certainly good news looks like we are continuing to turn the tide on the COVID virus. And that's our silly little show for the day. I really appreciate everybody tuning in. If you're listening on podcasts, such as Apple or Pandora or one of those platforms, if you just reach up and click that little button saying that you like it or give me a thumbs up that would certainly help my cause. And if you would please LIKE US shares and subscribe to us. That would be really cool as well. Once again, thank you for all your support and I hope everybody has a wonderful weekend.