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By Mary Lynne Gibbs • 2018 Director

Errors and omissions insurance claims are rising in the nation, yet Texas is not seeing an increase in these kinds of professional liability issues. Why? At our most recent RRC luncheon, TREC Chair Avis Wukasch told a packed house that one E&O insurance provider believes it is because brokers in Texas must meet stricter educational and regulatory requirements.

Avis recently appointed me and eight others across Texas to the Broker Responsibility Working Group (BRWG) which will allow us to make sure Texas remains a leader in broker accountability. We are in charge with reviewing broker licensing requirements, minimum competency requirements, broker mentorship programs, minimum service requirements in relation to service fees and temporary out of state registrations for commercial transactions. It is my honor to be appointed to this vital group for the second time.

While most people in real estate are responsible, there are a few crummy people out there who make it imperative that we clean up the profession. I remember one case of a broker who was taking rental payments for a veteran serving in Iraq but was not depositing the money for him. The veteran got a notice of foreclosure after he was deployed. Another broker was in a nursing home and others individuals could not be located. 

“Over the years, the work of this group has resulted in a greater experience required to become a broker, a mandatory Broker Responsibility CE course for brokers who sponsor sales agents, TREC Rule 535.2 on Broker Responsibility and more consumer-friendly language for the Information About Brokerage Services Notice,” says Kerri Lewis, general counsel for the Texas Real Estate Commission (TREC). “All of these improvements strengthen the professionalism of the industry and better serve consumers of real estate services in Texas.”

If you have an interest in improving broker standards, consider putting the Broker Responsibility Course offered by TREC on your goal sheet for next year. Whether you are a sales agent or a broker who supervises sales agents, there is so much valuable content that benefits our profession. Have you ever thought about getting your broker license? The Broker Responsibility Course is a great course to take before doing so and it would help you to determine if becoming a broker something that you would truly like to be involved with, especially if you are considering leading a team. Instructors are now revising the course, so I recommend that you take it beginning in January 2019. Another option is to sign up for the 9-day cruise to the Panama Canal in February. I will be teaching the course and you’ll receive six hours of CE elective credit.

Let’s work together to make sure brokers ensure compliance with applicable laws and regulations, including proper training and supervision of sponsored agents.

By Mary Lynne Gibbs • 2018 Director

As REALTORS, you know that trees add value to property. A majestic oak may be worth thousands! With the constant threat of oak wilt, one of the most destructive tree diseases that can kill oaks at epidemic proportions, we need to make our homeowners aware of the dangers. 

Research and industry knowledge add value to our clients and improves our competency, but we certainly do not want to offer information outside our expertise. I recommend you seek the advice of a qualified arborist like Greg Gundersen of Certified Tree Care who recently shared with me some helpful advice: 

What recommendations do you have for agents who refer landscape and tree care services to clients?  

Greg: The most important thing is to make sure whoever is being referred is a professional in their field. If looking for tree care, make sure they are using an ISA certified arborist. 

What do we need to know about tree care and oak wilt? 

Greg: If the trees have a lot of broken or dead limbs, make sure to have them painted to ensure their health. Oak wilt beetles are active between 60-90 degrees so no matter what time of year, pruning is important and all equipment should be sterilized. 

What preventive measures can be taken? If discovered, what can be done to help save the trees?

Greg: Prevention is always less expensive than being reactive. Keeping the trees properly maintained and all wounds painted is crucial. There are ways to protect the live oaks if oak wilt is a threat. After trees are manicured, we recommend injecting the trunk base with a fungicide, which acts as a protective barrier for up to two years. It also helps open the vascular system of the tree to allow water and nutrients to flow more freely to the crown. Make sure you have an ISA certified arborist up-to-date on the most effective and efficient ways to treat the issue.

So my advice this September is to take care of your trees, educate your clients and have a happy fall! And since fall is one of the best times to establish trees, you might tell your clients to consider planting some trees. One day they may add thousands to the value of their home!

By Mary Lynne Gibbs • 2018 Director

Moving often rates among the top stressors in life. So, when various start-up companies say they have invented ways to make buying and selling homes hassle free, we, as REALTORS, often want to know more. Because isn’t it our job to make sure our clients have a pleasant and smooth experience during these kinds of transactions? 

But let’s remember that our job is also to protect our clients during these transactions. As we often say, “they don’t know what they don’t know,” and our job is to educate buyers and sellers. These new options to buy and sell a house with the click of a mouse – or a tap on a phone – may be convenient, but, as in many things in life, convenience often comes at a cost. I did some research on one of these companies that is active in some our state’s largest cities and found that at least one of these start-ups has charged fees of 8 to 10 percent, and sometimes as high as 12 percent. Clients have the perception they are saving 6 percent without working with a traditional REALTOR, but often they aren’t.

In addition to possibly higher fees, sellers may be leaving money on the table that they don’t know they are leaving. Like I said before, “they don’t know what they don’t know.” If they are in a hurry to sell, perhaps a click and sell method is beneficial to them, but in most cases, people need to get the most money for their homes. As REALTORS, we bring experiential knowledge that sets us apart. Algorithms used by these technology-based companies can’t touch, taste, smell or put their eye on the property to determine its value like we can. 

Even a former REALTOR, who had years of experience but had let his license expire, did not know how much his home was worth when it came time to sell. Factors such as low inventory and location allowed us to push the market and we got him $100,000 more. If he had used a click and sell type of company, he would have left that on the table unknowingly. How is that helping the consumer?

In everything, there is going to be a bigger, better model that touts itself as being more efficient and saves money, and we in the industry must be prepared for that. But we also must be ready to educate and protect our clients about the potential costs of these click and sell methods. More than ever, be ready to show clients how using your skills as an experienced and educated REALTOR is essential. And if the transaction does turn out to be one of life’s stressful events, they can buy multiple massages with the money they did not leave on the table! 

By Mary Lynne Gibbs • 2018 Director

It was May 23, 1973, when my parents closed on their home and our family moved back to Austin. The final sales price was $34,582.75. Wow, how times have changed since my teenage years.
  Fast forward to May 2018, when the Austin Board of Realtors reported the median price of a home in our city at $389,000, a figure fewer and fewer can afford.
   Recently I attended a mid-year economic forecast with speaker David Tandy, president of Texas National Title, who stated that if home prices continue to increase at 5 to 7 percent per year, combined with our population growth, then affordability challenges will continue, and rentals will grow.
     As REALTORS we all are feeling this impact and realize that more and more of our first-time home buyers are seeking housing on the outskirts of Austin due to affordability. The challenge for them is often whether to accept a longer commute into work or trade off with less square footage closer in.    
   Affordability also is taking a hit due to interest rates, which had been historically low but are now rising. Communicating this shift with our buyer prospects may encourage them to act more quickly to enable them to benefit from homeownership sooner rather than later.
   While native Austinites who have witnessed home prices skyrocket may feel as though housing affordability is diminishing, Austin is reasonable when compared to the national market. According to PayScale, our city is 3 percent below the national average cost of living and the cost of housing is 15 percent below the national average.  
   “In many other large cities, the cost of housing is well above the national average, regardless of the overall cost of living,” according to PayScale. “It’s no wonder that Austin is one of the most popular cities in Texas.”
 So while home prices have risen astronomically over the past 45 years, smile and realize it could be worse!

By Mary Lynne Gibbs • 2018 Director

Closings are typically the time to celebrate and are often topped off with champagne. This is not always the case when couples are divorcing. Our fiduciary duties as professionals are to put our clients at ease; making sure to treat both spouses or soon to be ex-spouses equally. Remain neutral, avoid giving relationship advice, remember you are not a marriage counselor, but have a willingness to listen.

The closing may be the final act in dividing assets in a settlement agreement. Separating marital assets should be left in the hands of your clients and their attorneys. Remember REALTORS shall not engage in activities that constitute the unauthorized practice of law as per the Code of Ethics. Obtaining a copy of their divorce decree, open communication with their attorneys and the title company will help ensure a smooth transaction. Utilizing your title resources for a preliminary closing disclosure or estimated net sheet when taking the listing will allow transparency and prevent surprises at closing. Ask your clients how they would like to be communicated with and copy both on all correspondence. A “paper trail” is always a good habit so nothing gets lost in translation.

Divorcing couples with children can be the hardest. Paying extra special attention to them will brighten their day. They of course did not wish for these changes in their lives. Will both parties be able to purchase or only able to lease? Is there damaged credit? Housing may be smaller and less affordable based on one person’s income. All these things are to be taken into consideration.  

The house was once filled with memories, dreams and traditions; the adjustment to change can be very emotional. One spouse may have moved on in another relationship and the other one remaining in the house may have a lot of anger festering with additional responsibilities such as having the house on the market and keeping it show ready. Some tips to help with the sale may be to incentivize the seller with offering housekeeping services paid by the party that is ready to get the house sold or offering financial gain for a good showing.  

Scheduling separate signings at closing may be best for some and less stressful. Divorcing couple representation can be twice as much work and double communication yet certainly worthwhile.