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For internal use

Make Every Deal a

Win-Win

Pro  Tips  &  Winning  Strategies

Copyright © 2018 REILLY, REALTORS® - All Rights Reserved. 

This document contains information confidential and proprietary to REILLY, REALTORS® and may not be used, disclosed or reproduced without the prior written authorization of REILLY, REALTORS®. Only real estate agents sponsored by REILLY, REALTORS® and employees of REILLY, REALTORS® may view this document.

WIN BIG WITH REILLY, REALTORS®

As your broker, I want to see YOU win. I want you to win more clients, more listings, and ultimately, more sales. In fact, I want you to win BIG, because when you win, your clients win, and REILLY, REALTORS® wins!

As a 15 year REALTOR®, I’ve learned a few secrets to success in real estate. I’ve created this guide to share these important strategies and tips that will help you succeed in your career and make every deal a win-win. 

Whether you are new or have been with us for some time, I want you to succeed and get the most benefit from your association with REILLY, REALTORS®. Please read this guide in detail and let us know if you have any questions, or if there is anything more we can do to help you have an incredible career with us! 

 


Michael Reilly

 Owner/Broker
 REILLY, REALTORS®

INSIDE THIS GUIDE

For best viewing, please review this guide on a computer rather than a mobile phone.  

1.      WINNING STRATEGIES 

1.1    Take Advantage of Our Services  
1.2    Put Your Clients First  
1.3    Be Professional!  
1.4    Understand the Contract & Process Terminology  
1.5    Don't Play Attorney!     
1.6    Don't Make Verbal Agreements!     
1.7    Document Important Communications  
1.8    Use docs@reillyrealtors.com & Avoid Common Mistakes  
1.9    Understand the Intermediary Relationship  
1.10  Wire Fraud is Real!  
1.11  
 Avoid Copyright Infringement     
1.12  Stay Out of Trouble with Online Content!        
1.13  Understand Fair Housing

1.14  Establish Your Own Personal Safety Protocol NEW!  
1.15  What to Do When Serious Issues Arise

Adopt the 7 Habits of Highly Successful REALTORS®   

2.    LISTING AGENT TIPS 

2.1  Market Your Listings Right  
2.2  Use Your Site with Sellers   
2.3  Avoid Legal Problems with Your Listings  
2.4  Disclose, Disclose, Disclose!  
2.5  Use these Tips when Negotiating for Your Seller  
2.6  Common Ways Your Buyer Can Back Out 
NEW!

      

3.    BUYER AGENT TIPS 

3.1  Use These Forms with Buyers   
3.2  Get it Inspected!     
3.3  Understand the Lead Based Paint Addendum
3.4  Handle Potential Appraisal Issues the Right Way

3.5  Don't Draft Escalation Clauses NEW!
3.6  E&O Benefits      

Revised on July 10, 2018

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At REILLY, REALTORS®, our goal is to provide the best possible service while protecting the best interests of our clients, agents, 

and our firm. We put together this guide to help our REALTORS®
avoid common real estate pitfalls so every deal is a win-win.

1. WINNING STRATEGIES

You and your clients have access to the best technology in the business including a highly personalized, lead capturing website with an abundance of content, plus tools to manage your relationships.

1.1

As a REALTOR®, you're running your own business. As a REILLY, REALTOR®, you're not on your own! Take advantage of the creative marketing, leading-edge technology, and fanatical support we offer, and build lasting relationships with our team of experienced agents. Let's make being part of the REILLY team rewarding - financially, professionally, and personally!

Take Advantage of our Services

Marketing

Technology

Your
Success!

Support

You and your listings are center stage with a strong online presence, printed materials, custom buyer and seller guides, seasonal marketing, and more. 

You have a hands-on broker, dedicated support staff, and friendly team of like-minded agents to help you run your business well and have fun while you're at it!

1.2 

It may sound cliché, but putting your clients' interests first is absolutely the number one thing you can do as a REALTOR® to win in this business. Here are tips to make it happen:

PUT YOUR CLIENTS FIRST

5 

3 

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2 

1 

Always go to bat for your client, even if the other side is likely to say no to a request or offer. Let the other side play the bad guy and maintain your clients' trust!

Keep your cards close! Be careful about sharing information with others that could jeopardize your clients' plans. The less you say in negotiations, the better!

Stay in your clients' good graces. If your clients are happy with your services, you can overcome just about any transaction obstacle!
 

Put your clients' interests above all else.

Understand your clients' goals.
 

"

Professionalism goes a long way in staying out of trouble in real estate! That means you work hard to provide the highest level of service to your clients. It means you are kind, fair, honorable, and honest in all your dealings. And it means you strive to increase your knowledge of the market and industry to better serve your clients. 

1.3 

Take the high road and show respect to all parties in everything you do! 

Be Professional!

"

Pro Tips

Kindness Wins!

Even if the other side is behaving poorly, don't follow suit!  A calm demeanor can help your side win, especially if things get difficult.

Keep Social Media Clean!

Everyone looks at everyone online - make sure your presence is professional! Would someone want to work with you after reviewing your Facebook or Twitter account?  

Watch your Words!

Carefully consider everything you communicate - in texts, emails, and on social media - it reflects on you and how you do business. If issues come up, your written words provide a record that may be used to defend you, or incriminate you!

Run from Bad Clients!

If you suspect your client is litigious, irrational, or even crazy - or if your client is just plain mean or argumentative - stay away! You don't need the stress (or future lawsuit)!

Assume You're on Camera!

Video cameras are everywhere! Warn your clients and be careful during every showing!

1.4 

As a REALTOR®, you are expected to be an expert in the process of buying and selling real estate, therefore, you must fully understand the process and terminology!  Be careful to use the correct terms to avoid confusion. For example, don't say we have a contract or deal if you don't have signatures - at that point, you are still in the offer stage. Another common misunderstanding is thinking Title has to have the contract for it to be enforceable. Once all parties have signed during the Acceptance/Delivery stage and everyone is notified, you have a contract!

Executed Date Noted & Effective Date Established

All Parties Notified - You have a contract!

Your listing? Mark it as Pending in the MLS!

A counteroffer negates the original offer or counter, so be careful in a tight market! Learn how best to negotiate for your seller.

Understand the contract process & terminology

Title Co Receives

1.5 

Never engage in the unauthorized practice of law! It's easy to accidentally slip into a lawyer role - so avoid the common ways REALTORS® do it!

Never interpret documents for your clients such as Title Commitments, HOA Docs, Easements, Tax Certificates, and Surveys. 

Do not state a property may be used for a specific use (e.g. commercial) without legal documentation from the seller. Always include a disclaimer that buyer should independently verify use with an attorney and conduct a feasibility study.

Use Special Provisions correctly. Never include language in Special Provisions that is covered by a TREC form or is not a fact. If/then statements in this section would
likely be deemed as the unauthorized practice of law. When in doubt,
check with Michael Reilly or the TAR legal hotline before you write
or accept anything written into special provisions.

Don't play attorney!

"

Only written agreements, signed by the buyer and the seller, are valid. The best practice is to put it in writing!

Only signed contracts/amendments are enforceable.
Time is of the essence when negotiating. If documentation is not signed by both parties, there is nothing to enforce.
If your buyer submits a counteroffer, the original offer is null and void and without the seller’s signature,  there isn’t contract to uphold. 

While verbal negotiations of contracts can be a quicker way to reach an agreement, verbal agreements are not enforceable for the sale of real property.

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1.6 

3

Don't make VERBAL AGREEMENTS! 

"

Pro Tip

Never make promises on behalf

of your client(s). 

 

Always write agreements on a contract or amendment! For example, never say "we have a deal!" until you have an executed contract. You may be held liable for misrepresentation if for some reason the contract is never executed.

If you are negotiating verbally or via text or email, until you have a signed contract, you should use a disclaimer stating your communication is not binding. For example: ”My client has authorized me to tell you they will accept $X, but until we have it on the contract, signed by everyone, this is not binding."

Pro Tips

1.7 

Email provides an important documentation trail you may need down the road, so be sure to deliver any contracts, addendums, important documents, or important advice to relevant parties via your REILLY, REALTORS® email account, even if you are also providing the information in person. For example, if you had a verbal conversation with another agent or your client about expectations, document it in an email like this: “Sally, it was great talking to you today! As we discussed, ....”

Be extremely careful about offering your opinion on matters where you are not a subject matter expert to avoid exposing yourself and REILLY, REALTORS® to unnecessary risk. If a client has a question about a subject that you are not 100% sure about and qualified to answer, you should always put in writing that the client needs to seek the advice of an expert.

Be Careful with Opinions!

Document important communications

Or if you are delivering important information via email, like an IABS Form, document it in an email like this:  "I look forward to helping you. By the way, please take a moment to review the required TREC IABS form when you have a minute by clicking this link..."

If there is ever a question related to a conversation or delivery of a document, you'll have a record of it.

At the first substantial conversation or written communication you have with a buyer, seller, lessor, or even a renter, you MUST provide them with the Information About Brokerage Services (IABS) Form and have them sign it. Simply including a link to the IABS form on your website or in your email is insufficient. Per TRELA Rule 531.20(d), the IABS can be provided "as an attachment to an email or as a link in the body of an email so long as there is a specific reference to the IABS Form in the body of the email." You can find your personal IABS here.

For buyers, you MUST have the buyer sign
the General Information
and Notice to a Buyer form
BEFORE you execute
a contract.

 

Always write your emails as if they will be read by a judge in front of a jury to avoid your written communication coming back to haunt you! Be courteous, professional, explain facts, and demonstrate a desire to be helpful. Additionally, restate a bad client decision to protect yourself ("I understand you don't want to have an inspection done..."). 

Write as if Your Email/Text Will be Read in Front of a Jury

"

Provide your clients with all signed documents via email -

even if you meet in person to sign or deliver it to them!

"

1.8 

We created docs@reillyrealtors.com to make it easier for you to keep track of your deals, so please help us make Quickbase as complete and accurate as possible! 

Incomplete documentation or mistakes on contracts, amendments, or other deal files can open you and your client up to unnecessary risk. You can avoid many problems by thoroughly reviewing your documents before finalizing them! While a missed detail may not seem like a big deal, it can make you look unprofessional, nullify a contract, lead to confusion requiring legal assistance, or result in disciplinary action with TREC.  

Use Docs@Reillyrealtors.com and avoid common mistakes

Blanks on the Contract 

A contract with missing signatures, initials, or details is unforgivable! Paragraphs with checkboxes that have not been selected are not enforceable. Missing contact information (including broker info!) can make it difficult for parties involved in the transaction to communicate important info. Take the time to protect yourself and your client - review the details of all required deal documentation! 

Common Issues

Missing Executed Date

Performance is calculated based on the executed date (aka effective date), so once everything is signed, make sure you or the other side enters the executed date and that you have a copy of the executed contract. No executed date? The brokers or the court may have to decide the date, and your buyer may not be able to terminate the contract! 

"

Contract Questions? Contact Michael Reilly or call the TAR Legal Hotline at 1-800-873-9155

Being thorough and professional on every deal will help you in so many ways - you'll win the trust of your clients, be in a better position to negotiate for your clients, and protect yourself and our brokerage.

Misuse of Special Provisions

Do not write language in Special Provisions that is covered by a TREC promulgated form or that is not a fact. If/then statements in this section would likely be deemed the unauthorized practice of law. When in doubt, check with Michael Reilly or the TAR legal hotline before you write or accept anything written into special provisions.

"

Missing Listing Agreements

You MUST have a listing agreement in Quickbase BEFORE your listing goes live in the MLS! If not, you do not have the protection of our E&O insurance, we are not indemnified if accidents or theft occur on the property, and we are liable for commission to the buyer agent with no ability to collect from the seller.  In addition, you will receive an automatic $100 fine!

1.9 

Intermediary relationships exist if you have a situation where you or two agents within REILLY, REALTORS® represent both sides of a transaction. An intermediary relationship only occurs when our represented buyer wants to see or buy one of our listings. If an intermediary relationship exists, you must:

Prior to negotiations, 
have both parties complete the TAR Intermediary Relationship Notice (TAR Form 1409). This form states who will pay the Broker and sets forth the Broker’s obligations as an intermediary.  

understand the intermediary relationship

 

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1

There are four scenarios that impact the intermediary relationship. Let's look at each with two fictional agents at REILLY, REALTORS®, Lucille and Bill. In every intermediary situation below, the TAR 1409 must be signed by both parties.

INTermediary Situations

Lucille is the listing agent, and Bill has a buyer for Lucille's listing. Because both agents work for REILLY, REALTORS®, there is an intermediary relationship. Because each agent had a relationship with their clients prior to Bill's buyer's decision to purchase Lucille's listing, it is an automatic intermediary with appointments relationship, meaning each agent is appointed to represent their clients as usual.

In the next two scenarios, Lucille is the listing agent and finds a buyer for her listing. Based on her seller's input, Lucille can either: 

a) act as an intermediary without appointments and not represent either side of the transaction, but just facilitate the transaction, or 

b) appoint another agent within REILLY, REALTORS® to represent the buyer.

The last scenario is one in which Michael Reilly, as the Broker of REILLY, REALTORS®, represents a seller and Bill brings a buyer. Because Michael Reilly is the supervising broker and his involvement may not be deemed fair and impartial, he must appoint another agent within REILLY, REALTORS® to represent his seller. The same would be true if Michael brought a buyer for Lucille's listing - he would have to appoint an agent to represent his buyer.

Just because there is not a Buyer's Agent does not make you an intermediary! If someone calls you directly to see one of our listings and they don't have an agent, they are a customer, NOT a client.  

In this case, you are legally allowed to assist the customer, but you must disclose that REILLY, REALTORS® represents the seller and we cannot offer advice. Since you are NOT acting as an intermediary, you must have the unrepresented buyer sign your TREC Information About Brokerage Services disclosure and Notice to Unrepresented Buyer and include this disclaimer in all written communication.
Please also review our
policy
and commission considerations.

TRUE STORIES

There are sophisticated cyber scams involving criminals acquiring sensitive personal and financial information, which they use to divert funds related to real estate transactions to themselves. Criminals may hack into email accounts and computer systems, impersonate account owners, and send
legitimate-looking emails with fraudulent wiring instructions.

PLEASE NOTE: As a REILLY, REALTOR®, NEVER ask your clients to share sensitive personal or financial information, and NEVER volunteer to provide instructions to wire or electronically send funds to anyone, not even a title company. 

The closing agent (e.g. title company representative or escrow agent) is the only person who may request or provide wiring instructions. It is your responsibility as an agent to warn your clients to never comply with wiring instructions to wire funds or provide sensitive personal information until they verbally verify the wiring request with their trusted closing agent using a phone number they are confident is accurate.

1.10 

One of our own clients received false wiring instructions via emails that looked legitimate. Luckily, our client was suspicious and called a trusted phone number to confirm.

Someone in Austin almost wired $1,000,000 to a cyber criminal a week before closing. Fortunately, the bank caught wind of the scam since funds are never requested that early.

A Denver couple is suing their REALTOR®, the brokerage, the lender, the title company and Wells Fargo because they were victims of wire fraud.

Wire Fraud is Real!

PRO TIPS

REQUIRED: SIGNED WIRE FRAUD NOTICE 

Whether you are representing a buyer or a seller, you are required to have your clients sign our Wire Fraud Notice. Even sellers can be targets - what if they have to bring money to the closing table? If there is an unrepresented seller or buyer, they also need to sign the Wire Fraud Notice. Do not leave yourself vulnerable to liability!


You can view and download our Wire Fraud Notice in English here and in Spanish here

Always look over all email addresses copied on emails with sensitive information and documents. If an address belonging to someone not involved in the deal has been copied, request that it be removed ASAP.

Instruct your clients to look over email addresses closely especially when sensitive information is being requested. Criminals often mimic email addresses of title reps, lenders, and real estate agents. Take a moment to make sure the company name is spelled correctly: for example, REILLY vs REILY.

1.11 

Did you know articles and photographs found on the web are protected by the U. S. Copyright Office? This means you could find yourself faced with a lawsuit if you use photos, blogs, neighborhood descriptions, and other content without explicit permission. Read more below on how to avoid copyright infringement.  

Because photo copyright is a big concern across our industry, our board has established the 
ABoR Verified MLS Photography Partners Program 
to help protect its members. We recommend choosing a photographer from this list for all listing photos as these photographers have agreed to license their photos to the MLS in perpetuity.

PHOTOGRAPHY
Guess who owns the rights to the photos you purchase? Your photographer, most likely! Typically, you are granted permission to use photos you purchase for a specified purpose or duration, so make sure you have written permission. Likewise, if you are 
marketing
 
 someone else's listing or want to use the previous listing agent's photos for your new listing, be sure you have both the agent's and the photographer's written permission    

USE ABoR VERIFIED MLS PHOTOGRAPHY PARTNERS!

Avoid Copyright Infringement

TRUE STORIES

CONTENT  

Do not use other people's written word or images without their consent! For example, say you find a blog or infographic you like online. DO NOT repurpose it on your personal website or in marketing materials without explicit permission. Save yourself the headache of an angry author and potential law suit.    

LOCAL FIRM SUED OVER ADVERTISEMENT

A local brokerage used a photo in a print ad without getting permission from the original photographer. The brokerage had to settle and pay the photographer $20,000 for the copyright violation. 


BROKERAGE SUED OVER LISTING PHOTOS

In California, a broker, salesperson, and owner were sued for using a previous listing agent's photographs without permission.

©

1.12 

With over 90% of consumers using the internet to find real estate information, it is essential to pay attention to your online presence! That means making sure your social media and website information complies with all rules - both statutory and ethical!

Stay Out of Trouble with Online Content

FOLLOW ADVERTISING RULES!

The Texas Real Estate Commission has rules on everything from how big our brokerage name needs to be in advertisements to where you need to display certain disclosures. In addition, NAR has rules on how you use their trademarked word REALTOR®! We've studied the rules to keep your REILLY, REALTORS® website and online marketing compliant. If you create an advertisement or website on your own, you MUST get approval from ops@reillyrealtors.com! Don't trust outside vendors who say their products are compliant - they won't be liable if they are not! Read the rules here and here - or just call Agent Services and we'll help you out!

TRUE STORY

SOCIAL MEDIA CONSIDERATIONS

Because TREC Advertising Rules apply to anything you do on social media, and consumers judge you based on the content you post, here are a few Dos and Don'ts to follow:

FACEBOOK POST LED TO TREC COMPLAINT

A buyer's agent sought a renter for the subject property, that had not yet closed, via Facebook. The deal fell apart, and the seller filed a TREC complaint suggesting the buyer's agent violated advertising rules since the buyer's agent did not have permission from the seller's agent to market the property for rent.

DO talk to Agent Services BEFORE you run ads or create a website! Many companies promoting services to agents don't comply with our state rules. Don't waste time and money on marketing that can get you in trouble!

DO leverage Agent Services to create Open House, New Listing, and Just Sold posts with links to keep you compliant!

DO make sure you include "REALTOR at REILLY, REALTORS" and links to the TREC Consumer Protection Notice and TREC Information About Brokerage Services on all Social Media accounts.

DON'T post photos or links to anyone else's listings without the agent's AND the photographer's explicit written permission! Common violations include posting links to listings you think are cool or pics you took at a showing or open house.  

DON'T post inappropriate content on your Social Media sites! If you wouldn't want your grandmother to read it, don't post it!

DON'T make negative comments on social media about another agent or property or get involved in commission conversations or controversial topics online. 

1.13 

The Fair Housing Act was established in 1968 as part of the Civil Rights Act. As a citizen, you are required to abide by this law, and as a REALTOR®, you have the additional responsibility of upholding the NAR Code of Ethics, which includes Article 10 related to discrimination. Please make sure you read the code and the Equal Opportunity For All Brochure on the HUD website! Be careful to NOT include phrases like "great for families" in your advertising and don't engage in conversations regarding the ethnic profile of neighborhoods.

understand Fair Housing

The Fair Housing Act prohibits the following actions in the sale and rental of housing based on race, color, religion, sex, disability, familial status, or national origin:

  • Refusal to rent or sell housing
  • Refusal to negotiate for housing
  • Making housing unavailable, or otherwise denying a dwelling
  • Setting different terms, conditions or privileges for sale or rental of a dwelling
  • Providing different housing services or facilities
  • For profit, persuading, or trying to persuade homeowners to sell or rent dwellings by suggesting that people of a particular race, etc. have moved, or are about to move into the neighborhood (blockbusting)
  • Denying any person access to, membership or participation in, any organization, facility or service (such as a multiple listing service) related to the sale or rental of dwellings, or discriminating against any person in the terms or conditions of such access, membership or participation

FAIR HOUSING RULES

Additional safety guidelines

If you ever have a concern when meeting someone, feel free to tell your client your office requires a copy of their ID before you visit a property. Just take a photo of it and email it to ops@reillyrealtors.com, letting us know your plans with the client. We can even have someone check in on you with a phone call!

NEVER visit a vacant house without having first met the client. If it is a new client, follow #1.

If you are waiting for your client to view a home, wait in your car with your doors locked until they arrive. You should approach the home together.

If you are hosting an open house, do it with a friend. If you have to do the open house on your own, be sure to have someone check in on you periodically.

If you ever have a concern about a client or someone at an open house, go with your gut! Drop the client, or make an excuse to get away.

Call Michael or let someone in the office know if you have concerns for your safety.

1.14 

Your safety and security is very important! A good place to start is to watch this 3-minute Personal Safety Video and review this list of Safety Tips from NAR. This video/list doesn't specifically cover a situation in which a complete stranger approaches you while you are preparing a showing, so please consider specifically what you would do in that instance.

Establish your own personal safety protocol

1.15 

Despite your best efforts, you may at some time be faced with difficult circumstances in your real estate career. This could involve any issue where disagreements have escalated to a point that a formal complaint or legal action is a real possibility. Regardless of which side is right, when serious issues arise, here are the steps you need to take:

what to do when serious issues arise

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1

Cease communication with all parties until you have spoken with management at REILLY, REALTORS®. As your broker, we will help you navigate the situation and respond in such a way as to protect you, the brokerage, and our clients. We will need as much information from you as possible to help find a solution to the problem. 

Make sure all required documents are loaded in your Quickbase deal file. Send them to docs@reillyrealtors.com ASAP if you have not previously done so.

Create a file containing a timeline of all communication related to the deal, including screenshots of texts, copies of emails and important documents, and details about important phone conversations with relevant parties.

LISTING AGENT TIPS

"

2.1 

Your listing clients expect you to be an internet marketing expert!
Let Agent Services help!

Our goal at REILLY, REALTORS® is to get the most exposure possible for every listing. For each of your listings, Agent Services will send you an email with marketing solutions we provide, but there are also things you should do to ensure your listings stand out in the busy Austin real estate market!

Market Your Listings Right!

"

LISTING CHECKLIST

Description provides an accurate view of the property & doesn't include showing instructions or fair housing violations (e.g. perfect for families!). 

Professional photos loaded before MLS listing goes live! New listing alerts only go out once & should showcase the property. Make sure your first photo is horizontal, not portrait, for best viewing in online search results.

Correct neighborhood listed in subdivision field so listing appears correctly in searches (e.g. Spillman Ranch is really Falconhead to the general public!). 

Client has reviewed and ideally signed off on your listing description and MLS data - they know the house better than anyone else!

Listing looks great online! Property correctly appears on maps, is in the results for neighborhood specific searches, and photos look great! Review your listing on your website AND the competitions'!

Sign and correct rider are in place. Feature rider or luxury style signage is used as needed and installed properly. Review our sign policy for details.

Professionaly printed flyers/brochures ordered from Agent Services.

Social media post prepared for Just Listed, Under Contract, and/or Just Sold as needed. All posts include links to your website.

Unbranded 3D Tour on MLS listing. GetAWalkthrough.com provides Matterport tours for as little as $149.

Just Sold postcards planned for via Quickbase deal form. The cost for mailers is processed on your DA!


PERSONALIZED LINKS

2.2 

Your REILLY, REALTORS® website has great information for you to pass on to your sellers. Be sure to use your branded links to direct sellers to pages like Preparing for Home Photos 

and Disclosures and Documentation. Your personal website will help build trust with your clients and prospects, and make it easy for you to share important information!

To link to search results, append &alink=agentname to the search URL. Example:
https://www.austinhomelistings.com/idx/?usearch[search_neighborhood][]=7380ad8a673226ae47fce7bff88e9c33&alink=michael 

To link to all other pages, append ?alink=agentname to the URL. Example:
https://www.austinhomelistings.com/sell-a-home-in-austin-texas.php?alink=michael 

To link to a listing detail page without requiring registration (e.g. FaceBook Open House posts), append ?alink=agentname&noreg to the URL. Example:
https://www.austinhomelistings.com/listing/10101-double-eagle-pass-austin-tx-78717-mls-8798748/?alink=michael&noreg 

Drive clients and prospects to your website by creating personalized links using your personal website identifier. Questions? Ask Agent Services!

USE YOUR SITE WITH SELLERS!

COMING SOONS
Avoid a TREC complaint with "coming soon" listings! Only use “coming soon” if the seller is still preparing the property for sale. If your goal is to use “coming soon” to try to acquire a buyer before the listing is exposed to other agents, you're putting your interests before your clients' and could end up with TREC disciplinary action.

ADVERTISING
Per TREC: "To avoid any violations of Article 12 of the Code of Ethics, REALTORS® shall be honest and truthful and present a true picture in their advertising and ensure that their status as real estate professionals is readily apparent in their advertising." This means you MUST include our brokerage name, REILLY, REALTORS®, in all advertisements. 

SPECIFIC USE OF PROPERTY
If you have a listing that would be perfect for a specific use (e.g. commercial, rental, addition) make sure you have supporting legal documentation BEFORE you market the property as such! Either way, ALWAYS suggest that buyers independently verify the property is suitable for the intended use. 

2.3 

Avoid Legal Problems with Your Listings

SQUARE FOOTAGE ISSUE

Seller was convinced his house was larger than that reported by the appraisal district. Agent listed the home with seller's reported sq ft with no supporting documentation. When appraisal sq ft came in lower, buyer demanded a price reduction.


SELLER BUY BACK

We represented a buyer who purchased property that was advertised as no-zoning but in fact, unbeknownst to the seller, the property was annexed by the city and zoned agricultural just prior to close. Our buyer hired a lawyer to force the seller to buy back the property. 

TRUE STORIES

2.4 

Did you know the #1 cause of home sale lawsuits is related to mistakes on the Seller’s Disclosure? Failure to disclose known defects exposes your client, you, and REILLY, REALTORS®  to legal liability, so remember this rule of thumb: Disclose, Disclose, Disclose!

Instruct your seller to complete their Seller's Disclosure to the best of their knowledge and belief. 

NEVER complete or help your seller complete their Seller’s Disclosure.

Read the Texas Association's Seller's Disclosure FAQ and then encourage your seller to purchase Sellers Shield, a helpful resource that also provides your seller with litigation insurance.

Disclose, disclose, disclose!

"

If your seller has prior inspection reports, whether from a buyer that terminated or from a report your seller purchased, you absolutely must share the report in its entirety with the next buyer. Whether you read the report or not, once you have it you are "charged with knowledge of the information in the report even if [you do] not open the report." (per TAR) As a listing agent, the best practice is to request the inspection report so you have the same information as the buyer, and so any defects found are shared with future buyers before they buy. 

If you or your seller learn something new about the condition of the property after completing the Seller's Disclosure, your client must update the disclosure. Also, if you receive a repair amendment and the deal falls apart, the details in the amendment must be shared with the next buyer.

If repairs are made, feel free to document that on the inspection report.

Our easy-to-use SMART Seller Tools PREVENT sellers from making critical mistakes disclosing the condition of their home, stopping lawsuits before they happen. Our Interactive Sellers Disclosure Notice allows you to easily fill out your form online as our LEGAL WIZARD seamlessly educates and guides you through each question. We keep sellers out of trouble, but if a lawsuit occurs, WE HANDLE IT offering the SECURITY of our $20,000 Promise.             - Sellers Shield

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Do not commit your seller to anything! 
Put the onus on the buyer to submit a new offer.

2.5 

Whenever you are negotiating on behalf of your seller, convey what your seller wants from the buyer without making a formal counteroffer to the buyer. The best way to do this is to use the "Seller's Invitation to Buyer to Submit a New Offer" (TAR-1926 Form). The form makes it clear that your communication is NOT a counter offer, but rather a list of items the seller would like to see on a new offer.

Use these Tips when Negotiating for Your Seller

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Examples

Let's say you have a very popular listing that will get multiple offers. If you make a counteroffer to Buyer #1 and then you get an offer you like better from Buyer #2, you have to formally withdraw any outstanding counteroffers to Buyer #1 before you agree to a contract with Buyer #2.  If you had used the TAR-1926 Form (or the form's language in your email) to communicate your desired goals to Buyer #1 instead of submitting a counteroffer, you would have no obligation to Buyer #1.

If you say "Thanks for the offer but my seller really wants $310,000!" in response to a formal offer and the buyer's agent writes back saying "ok, we've got a deal!", you may find yourself in a situation where the buyer thinks you have a meeting of minds, even though you haven't formally checked with the seller or negotiated other parts of the contract. A better text would be: "Thanks for the offer!  My sellers would more favorably consider an offer of $310,000 with a close date a week earlier than you proposed. This is not a counteroffer, but a request to your buyer to submit a new offer. We look forward to hearing from you!"

TEXT OR EMAIL NEGOTIATIONS

MULTIPLE OFFER SITUATION

Offer $ for Repairs!

Are the buyers asking for repairs? Cash is king!  

After an inspection, it's common for buyers to submit repair requests to the seller. If the seller agrees to do the repairs, the following problems may result: 1) the seller could be in default if the repairs are not done in a timely manner or 2) if there is an issue post close with the agreed upon repairs, the seller may be on the hook!

The best response to such requests is to have the seller offer a specified dollar amount at close for the repairs. Once the amount is agreed upon, the seller will have no further responsibility for the issue!

2.6 

3

1

4

2

The truth is, it's very difficult for a seller to terminate a contract with a buyer, and pretty easy for a buyer to back out. Here are common ways buyers can terminate the contract outside of their option period without losing their earnest money.

Third Party Financing Addendum: This is the most common way a buyer backs out of a contract and may occur if the buyer is approved but learns the appraisal falls short. It's important to understand that the buyer getting loan approval is a based on the date negotiated in the contract, but the lender's approval - which includes the appraisal - is not. If the appraisal is a concern, be sure to use the Addendum Concerning Right to Terminate Due to Lender’s Appraisal. 

Seller's Disclosure Notice: Buyers have seven days after receipt of the SDN to back out. Best practice for a seller is to deliver the Seller's Disclosure at the time of contract signing. 

HOA Documents: A buyer can back out without losing earnest money after reviewing the HOA Documents, so when representing a seller, be sure the title company delivers HOA docs early in the transaction to give the buyer time to review them within the negotiated time frame.

Statutory Tax District (e.g. MUD Notice):  According to Section 6 E, Paragraph 3 of the 1-4 Family Contract, the seller must provide, and the buyer must sign, any notice disclosing a Statutory Tax District, including MUDs and Conservation Districts, prior to executing the contract. If you are listing a home in a MUD/Conservation District, it is your responsibility to ensure your seller completes the MUD Notice and has it notarized if required prior to contract signing. 

Common Ways Your Buyer Can Back Out

BUYER AGENT TIPS

PRO TIPS

3.1 

Please contact ops@reillyrealtors.com for your Personalized Buyer's Packet that contains these forms.

BUYERS REP FORM
While we do not require Buyer Representation forms, there are times it's a good idea to have one signed. For example, if you are working with a lead or are unsure of someone's loyalty, use our one page Buyers Rep Form for your protection.

In addition to contract related forms, ammendments, and disclosures, you will need to present and obtain signatures from your buyers on the following TREC Forms and REILLY documents: 

At the first substantial communication with a buyer, please obtain signatures on these documents:

          Information About Brokerage Services (IABS)
          (REQUIRED, signature needed)

          General Information and Notice to A Buyer
          (REQUIRED, signature needed)

USE THESE FORMS WITH BUYERS

DON'T WAIT TO PRESENT!
Required forms help your buyers understand their risks, and also help protect YOU. For example, the Wire Fraud notice is intended to help your buyer watch for suspicious activity - if you wait to present the Wire Fraud notice, it may be too late!

When contracts are signed, present buyers with these REILLY, REALTORS® specific docs:

          REILLY Wire Fraud Notice
          (REQUIRED, signature needed)

          REILLY Inspection Notice
          (signature required if no inspection)

          REILLY Home Warranty Notice
          (no signature required)


YOUR IABS
It matters how the IABS is completed! Be sure to use the personal IABS we created for you and loaded to your website!

3.2 

You should always recommend that your buyer has their subject property inspected! Be sure to provide at least three licensed inspector recommendations so your buyer can make their own decision on whom to hire. By giving only one name, you could be put in an awkward position if the inspector misses something.

If your buyer opts out of getting an inspection, get it in writing using our Notice to Buyers Regarding Inspections form as discussed on the previous page. This form documents your client's decision to use (or not use!) an inspector.

Get it inspected!

INSPECTION TYPES

PRO TIP

A standard home inspection should always be encouraged, but additional inspections may also be needed, depending on the property. If applicable, encourage your buyer to get the following inspections:

For new construction, consider a
3D Tour at frame stage - it could help your client with issues down the road!

  • Pre-sheetrock (new, custom homes)

  • Lead Based Paint (homes built prior to 1978 - see next page)

  • Stucco

  • Pool and/or Hot Tub

  • Septic

  • Well 

3.3 

If the subject property is a home built before 1978, a signed Lead-based Paint Addendum is required BEFORE the contract is executed! Additionally:

  1. Use the correct form! There is a Lead Based Paint Addendum for Leases and for Residential Sales.

  2. The seller must sign first because the seller has the obligation to provide information to the buyer regarding any known lead-based paint and/or lead-based paint hazards, including any records or reports the seller has pertaining to lead-based paint/hazards. Your buyer must sign AFTER the seller!

  3. You must provide the EPA’s “Protect Your Family from Lead in Your Home” pamphlet to your buyer.  Be sure to send the pamphlet via email so you have a record of delivery!

  4. Have the addendum signed before you execute the contract! All sections must be completed (checkboxes in B, C, and D) and signatures from all parties are required (buyer, buyer’s agent, seller and seller’s agent).

understand the Lead-based paint addendum

3.4 

If you are working on a deal where the appraisal is a potential issue, use this TREC FORM: 

Handle Potential Appraisal Issues Correctly

Appraisal Addendum Deciphered

Option (2) means the buyer is forced to cover any shortfall in the appraisal with an increased down payment, but is limited to a specific, predetermined amount. Only use this option when you know your buyer has the cash available to make this adjustment. If they don't have the additional cash, the buyer would be in default and lose their earnest money.  This option is preferable to the first option since there is a limit to the additional cash for down payment required from the buyer.

Option (3) would be used by a buyer who already has a larger than normal cash down payment, but still wants protection in case the appraisal comes in low. Typically, the benefit of a larger down payment is that it can cover an appraisal shortfall, but this would allow the buyer the ability to terminate if the appraisal is low.

Option (1) means the buyer is forced to cover any shortfall in the appraisal with an increased down payment. Only use this option when you know the buyer has the cash available to make this adjustment, otherwise the buyer would be in default and lose their earnest money if there is a shortfall. Be very careful with this option!

To best protect your client, also consider: 

1

2

Including in special provisions: "Buyer to order appraisal and deliver copy to seller within 10 days of executed contract date."  While this doesn't necessarily obligate the buyer to put up more, it moves the issue to the beginning of the transaction, keeping it from becoming a last minute issue.

Increasing the down payment on the contract up front to handle the anticipated appraisal shortfall. If the appraisal comes in fine, you can write an amendment to change the down payment back to 20%.

If the house HAS to appraise for the sales price AND the buyer CAN'T increase the downpayment, do NOT use the appraisal addendum. The first two clauses obligate the buyer to increase the downpayment while the third is for a cash buyer or someone with a large downpayment.

See TAR's article on this topic for more information.

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While it may be tempting, it is illegal for you to draft and use escalation clauses.

3.5 

In a hot market where multiple offers are common, remember, escalation clauses are not allowed. An escalation clause is when a buyer promises to automatically increase their offer above any other offer the seller may receive. 

Don't draft escalation clauses

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TREC RULING

TREC has repeatedly noted that "making the purchase price vary from the amount set out in the contract based on the outside variables could affect the rights and remedies of one or both of the parties to the contract and is considered the unauthorized practice of law."

Only an attorney may draft such language and it must be an attorney working for that specific client on that particular deal. In other words, we can't hire an attorney to create boiler plate language that can be re-used on any deal. To read more about TREC's opinion on this practice, please click here.

3.6 

Permit History Reports

If there is a possibility that work was done on a property that would require a permit, protect your buyer by verifying the correct permits were pulled and closed out. CRES offers an online tool that allows you to pull permit history. If there is a claim on a property and the buyer was provided a permit history report from the CRES system prior to close, our E&O deductible may be reduced by $2,500. Contact ops@reillyrealtors.com for login info. Learn more here.

Home Warranties

Our E&O deductible, which is shared by the brokerage and agent, may be reduced by $2,500 if there is a claim on a property and the buyer purchased a CRES Home Warranty. Three of the big names in home warranties offer a CRES product, and these are listed on the Notice to Buyers Regarding Home Warranties we encourage you to present to buyers. 

REILLY, REALTORS® has partnered with CRES Insurance for our Errors and Omissions Insurance, and they offer two important benefits that could save you money if there is ever a legal claim that causes us to use our E&O policy. More importantly, both options protect your buyer!


E&O Benefits

adopt the 7 habits of highly successful realtors®

  1. Acquire leads any way you can! Work to constantly grow your network and ask for referrals!
  2. Stay connected to past clients.
  3. Communicate often with clients, and explain things along the way.
  4. Know everything you can about your neighborhoods.
  5. Always work to earn your clients' trust and act in their best interests.  
  6. Maintain positive relationships with other agents.
  7. Take the high road and show respect to all parties in everything you do!

Increase your success with these habits!

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Thanks for your help in making REILLY, REALTORS® a team of top agents by demonstrating love for your work, your clients, your community, our city, and each other. We appreciate your efforts to take the high road and show respect to all parties in everything you do!

Questions? Contact Agent Services!

512.600.1800 | OPS@REILLYREALTORS.COM

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