Real Estate Concepts: Listing Agreements & Inspections

Listing Agreements

• Listing agreements are employment contracts between a principal and agent, authorizing the agent to perform services involving the principal's property.

Home Inspections

• Home inspections evaluate a property's condition, including roof, foundation, HVAC, plumbing, electrical systems, and safety aspects.
• Inspectors look for signs of damage, insects, or issues impacting property value.

Escrow

• Escrow is a written agreement where a third party holds instruments or property until specific conditions are met for delivery to a designated person.

Exemptions from Real Estate Licensing Course

• Licensed real estate attorneys are considered licensed salespersons/brokers.
• Public officers performing official duties related to real estate court proceedings are exempt.
• Individuals acting under court orders/appointments from NY Supreme or federal courts are exempt.

Property Condition Disclosure Report

• This report details a property's condition; it must be completed or a signed statement of refusal must be on file.
• Seller's often decline to fully complete the report, which results in a $500 credit for the buyer, although it's advised to complete the report for better practice.
• Homeowners aren't experts, and even minor issues can lead to claims later. Completing the report is often beneficial.

Due Diligence Process

• The due diligence period allows buyers to assess the property.
• It includes conducting a professional title search to uncover ownership history, liens, encumbrances, and any third-party rights.
• Property engineers conduct inspections, evaluating the structure, mechanical systems, and the like.
• Environmental investigations assess property for chemical spills or potential contamination, often more critical in commercial properties.

Uncapped Natural Gas Wells and Notices

• The disclosure form for uncapped natural gas wells must be filled out, and the presence or absence of such wells must be disclosed.

Buyer and Seller Disclosure Forms

• These forms ascertain an agent's representation (buyer, seller, or both) and protect the client's interest.
• Seller's agents have fiduciary duties including care, loyalty, confidentiality, disclosure, obedience, and accounting.

Commingling

• Commingling is mixing client funds with a broker's personal or business funds, which is prohibited.

Net Listing

• A net listing sets a minimum price for the seller; the broker receives the price above this minimum as commission.

Article 78 Proceedings

• Article 78 proceedings are appeals to challenge decisions of government agencies, such as license revocations.

Article 12-A

• Article 12-A of the NY Real Property Law regulates real estate salespersons and brokers.

Kickbacks

• Kickbacks are payments given to unlicensed people in real estate transactions. This is a violation. Penalties include license loss and fines up to three times the commission amount.

License Loss – Grounds

• Material misstatements on the license application
• Fraudulent practices
• Demonstrated incompetence or untrustworthiness
• Offering properties without the owner's consent
• Taking listings from a former broker
• Violations of anti-discrimination laws
• Practicing law without a license.
• Commingling funds
• Net listing contracts
• Kickbacks
• Having an unlicensed assistant
• Untruthful or misleading advertising
• Advertising without the sellers' consent.
• Failure to include name and license information in ads.

Administrative Discipline

• State Departments enforce real estate license laws by imposing reprimands, denial, suspension, and revocation of licenses.