Chattanooga Real Estate Blog

Neal Pascal plead guilty today and agreed to assist prosecutors in his mortgage fraud case.  If you are reading from out of the Chattanooga area, Neal Pascal was a weatherman for 20 some years on our local ABC television station.  He resigned a month or so ago when he was charged with mortgage fraud in a federal investigation.

The Chattanoogan has all the details but in a nutshell he preyed on For Sale By Owners who had no idea what they were doing.  He was in cahoots with the title company and his lender.  The FSBO may or may not have know what they were doing was illegal but if they had been represented by a REALTOR® the chances of this scam happening would have been slim to none.  I don’t know any REATLORS® who are willing to risk their license on something like this.  He has plead to only one offense but he bought and sold many many properties.  Speculation is that this was a common practice.

He is facing up to 5 years in prison and a $250,000 fine for just one offense.  Remember this if anyone ever asks you to change the sales price and give the difference to the buyer for any reason.  It’s illegal and you could wind up behind bars!

Standard of Practice 3-5

It is the obligation of subagents to promptly disclose all pertinent facts to the principal’s agent prior to as well as after a purchase or lease agreement is executed. (Amended 1/93)

·  Standard of Practice 3-6

REALTORS^® shall disclose the existence of accepted offers, including offers with unresolved contingencies, to any broker seeking cooperation. (Adopted 5/86, Amended 1/04)

·  Standard of Practice 3-7

When seeking information from another REALTOR^® concerning property under a management or listing agreement, REALTORS^® shall disclose their REALTOR^® status and whether their interest is personal or on behalf of a client and, if on behalf of a client, their representational status. (Amended 1/95)

·  Standard of Practice 3-8

REALTORS^® shall not misrepresent the availability of access to show or inspect a listed property. (Amended 11/87)

I’m down to just 2 listings now.  We are having a Christmas Sale!!

213 Baker St (North Chattanooga) 2 bed 2 bath built in 2004 and available immediately. 

New Price!

2001 Duncan Ave (Highland Park) 3 bed 2 bath practically new construction.  Available immediately. 

Seller will pay $4000 towards buyers closing costs!!

1-31 "Arte d’Italia" at Athens Center for the Arts

2-15 "Holidays at the Houston" tours at Houston Museum of Decorative Arts

13 Advent concert at St. Paul’s Episcopal Church featuring Choral Arts of Chattanooga

13 Advent concert at Jones Memorial United Methodist Church featuring Beth Burkey

13 Bach’s Lunch at St. Luke’s Episcopal, Cleveland, featuring Tennessee Wesleyan College Chorale

13 Lindsey Noelle Brown in concert at Chattanooga Theatre Centre

13-31 "Common Threads" exhibit at McMinn County Living Heritage Museum, Athens

14-16 Holiday Lights at Chattanooga Zoo

15 NCAA Division I-AA Football Championship at Finley Stadium

15 Bach’s Lunch at Grace Episcopal Church featuring Chattanooga Bach Choir

15-16 Crosspointe Community Church presents "The Journey Home" at Colonnade

15-16 "Sorry Wrong Chimney" at Foggy Mountain Theatre

16 CSO Pops: "Home for the Holidays" at Tivoli

16 Tennessee Valley Railroad Museum’s Chickamauga Christmas Special

16-17 The Four Freshmen at Tivoli

18 GAC Country Christmas with Deana Carter, Julie Roberts, Steve Azar, Buddy Jewell and Blue County at Tivoli

18 "Common Threads" exhibit opens at McMinn County Living Heritage Museum, Athens

20 Advent concert at St. Paul’s Episcopal Church featuring Chattanooga Boys Choir

20 Advent concert at Jones Memorial United Methodist Church featuring Doug Richison

20 Bach’s Lunch at St. Luke’s Episcopal, Cleveland, featuring Margaret Ann Randolph and Company

22 Bach’s Lunch at Grace Episcopal Church featuring Laura Elder on harp and Nora Kile on flute

27-30 Quilts accepted for "Stitches in Time" exhibit, opening Jan. 12 at Museum Center at Five Points, Cleveland

31 New Year’s Dinner Gala Cruise on Southern Belle

31 New Year’s Eve party, with Nashville band Timeline, at Bear Hollow Resort, Monteagle

This act, commonly referred to as the “FCRA”, is a list of the rules and regulations that govern lenders and the credit reporting agencies. You should become familiar with your rights under this act which can be accessed at no cost at the Federal Trade Commissions web site. Some highlights are:

      *Permissible Purpose – There are only eight legal reasons why your credit reports can be accessed. These are called “Permissible Purposes.” Some of the more obvious reasons are:

     *Consumer Disclosure – If you ask for a copy of your own credit report then this is a permissible purpose.

     *As Part of a Legitimate Business Transaction – If you fill out an application for credit then this gives the lender permissible purpose to pull your credit reports.

     *Your Right to Dispute Your Credit Information – Every consumer in the U.S who has a credit report also has the right to dispute the information in that report if they feel it is incorrect, outdated or unverifiable. The FCRA lays out the process and requirements on how to file a dispute and what kind of turnaround time your lenders and the credit reporting agencies have to complete their investigation.

      *Your Right to a Free Copy of all Three of Your Credit Reports – Recently the FCRA was amended by an act called FACTA also known as the Fair and Accurate Credit Transactions Act. FACTA calls for national disclosure of credit reports for free. By September 2005 every person in the U.S can get a free copy of his or her three credit reports. Requesting your free copies if very easy. Go to www.annualcreditreport.com to verify your eligibility.

Standard of Practice 3-4
REALTORS^®, acting as listing brokers, have an affirmative obligation to disclose the existence of dual or variable rate commission arrangements (i.e., listings where one amount of commission is payable if the listing broker’s firm is the procuring cause of sale/lease and a different amount of commission is payable if the sale/lease results through the efforts of the seller/ landlord or a cooperating broker). The listing broker shall, as soon as practical, disclose the existence of such arrangements to potential cooperating brokers and shall, in response to inquiries from cooperating brokers, disclose the differential that would result in a cooperative transaction or in a sale/lease that results through the efforts of the seller/landlord. If the cooperating broker is a buyer/tenant representative, the buyer/tenant representative must disclose such information to their client before the client makes an offer to purchase or lease. (Amended 1/02)

This one can get tricky.  Lets say John Smith with John Smith Realty (made up name) has listed Sally Jones’ home.  John has agreed to market the home for a 6% fee.  However, if an agent with John Smith Realty procures the buyer he will reduce the fee to 5%.  This is a variable or dual commission. 

It is perfectly fine to do this.  However, it must be disclosed to potential cooperating brokers.  In our area there is actually a place in the MLS to note if it is a variable or not.  If I called John Smith and asked the particulars of the variable rate he is obligated to tell me.  I can ask what the difference to the seller would be if someone from John’s company wrote the same offer as opposed to me writing it.  Then I must disclose this information to my buyer client prior to writing an offer.

It puts everyone on a level playing field.  For example if I have an offer for list price and John has an offer for list price the seller will net more on Johns offer even though they are for the same amount because the commission due from the seller is lower if they accept John’s offer.

I ran across a neat site the Amazon has in beta now.  UnSpun is a community run "Best of" site.  You can browse the lists already created and cast your vote as well as create your own list.

I spent a while browsing and created a list myself.  "The Best Chattanooga TN Real Estate Websites".  I voted for myself, of course:)  But there have been a few more sites added and votes cast.  I checked out one list that was "Top Qualities in a Real Estate Agent".  Honesty is currently number one with knowledge running a distant second. 

During my browsing I found a list of the "Best 80’s Bands".  Since I spent my late teens and early 20’s in the 80’s I feel extremely qualified to vote on this one but Duran Duran?????  No way,  I voted Guns ‘N Roses up:)

Standard of Practice 3-3
Standard of Practice 3-2 does not preclude the listing broker and cooperating broker from entering into an agreement to change cooperative compensation. (Adopted 1/94)

Obviously if everyone agrees to changing the compensation then it’s not a violation.

If you’ve been looking at a HUD foreclosure and trying to decide if now is the time to make an offer this news from HUD might just help you decide.  HUD is offering an incentive on all HUD owned homes sold between December 8th and January 5th to owner occupants who purchase wiht an FHA insured loan.  Including in the "FHA Brings the Holidays Home" sales event are a $2500 home inprovement allowance and a minimum $100 down payment. 

Additional information can be found on HUD’s website.