FHA'S TOP FIVE ITEMS OF REPAIR
The following five items are seen by Appraisers more often than any other repairs listed on the VC Sheets. If you would like to expedite your closings and save your clients time and money, make them aware of these five repair items.
1. PEELING PAINT: For properties built after 1978, any and all peeling paint on the exterior of the dwelling must be scraped and painted with two coats of no-lead base paint. For properties built prior to 1978, any and all peeling paint on the interior and exterior and including all detached improvements must be painted with two coats of neo-lead base paint. Example: storage building, decks, patios, fences, detached quarters, etc. The detached improvement may be demolished and removed from the property as an alternative to scraping and painting.
2. GAS WATER HEATERS: Must be at least 18 inches above the floor level. Exception: if the water is electric, if the gas water heater is within the living area, or if the water heater is contained in its own area no larger than 2 feet by 2 feet with proper ventilation outdoors. If the room is large enough to store anything else other than the gas water heater, it must be raised.
3. UTILITIES: All utilities must be turned on or the Appraiser will have to come back to re-inspect.
4. STEPS WITHOUT HANDRAILS: Anything with more than one step must have a handrail. This includes both interior and exterior.
5. PLUMBING LEAKS: Nine out of ten leaks noted are found under the kitchen sink. Flush toilets and checks water lines, run water in all sinks and check fittings under the sink, check bathtubs and showers to ensure they are working properly. Make sure the hot water is turned on at time of inspection.
FIFTEEN REASONS WHY ALL REAL ESTATE TITLES SHOULD BE INSURED
1. A fire destroys only the house and improvements. The ground is left. A defective title may take away not only the house but the land on which it stands. Title insurance protects the buyer against such loss.
2. A deed or a mortgage in the chain of title may be a forgery.
3. A deed or a mortgage may have been signed by a person under age.
4. A deed or a mortgage may have been made by an insane person or one otherwise incompetent.
5. A deed or a mortgage may have been made under a power of attorney after the death of the principal and would, therefore, be void.
6. A deed or a mortgage may have been made by a person other than the owner, but with the same name as the owner.
7. The testator of a will might have had a child born after the execution of the will, a fact that would entitle the child to claim his or her share of the property.
8. The testator may not have revoked a will after its execution.
9. A conveyance by heirs-at-law of a person supposed to have died without a valid will may be defeated by subsequent discovery and probate of a will.
10. An heir or other person presumed dead may appear and recover the property or an investment therein.
11. A Judgment or levy upon which the title is dependent may be void or voidable on account of some defect in the proceeding.
12. Title insurance helps speed negotiations when the property is ready for
13. If an insured title is ever defeated, the amount of the loss is reimbursed by the title insurance company.
14. Title insurance means free defense in court.
15. Only title insurance protects against claims due to marital status and validity of divorces such as a supposedly non-existent or divorced "wife" or "husband".
HOUSE HUNTING CHECKLIST
The following checklist will help you compare "apples to apples" as you look for your new home. It is by no means complete; there are probably items you'll want to add. It should, however, cover some of the more important things to consider during your search.
★ Is the neighborhood attractive, pleasing, and well-maintained?
★ Is the lot free from drainage from neighboring lots?
★ Is it possible to enjoy privacy in the yard?
★ Are there vents under the roof overhangs and close to the roof ridge or in the gable ends of the house?
★ Is the ridge of the roof straight and free from bowing?
★ Is the siding at least six inches above the ground?
★ If brick has been used, is it free from cracks?
★ Are the walls straight and free from major bulges?
★ Are the window and door frames sealed with unchipped caulking?
★ Do the windows have double-pane insulating glass?
★ Do windows provide good cross ventilation and adequate natural light?
★ Does the placement of windows and doors allow for a variety of furniture arrangements?
★ Do interior doors open inward into rooms and outward away from stairs?
★ Are floors level and free from squeaking?
★ Are adequate electrical outlets located in every room?
★ Does the house have adequate storage space?
★ Does the house have copper water lines?
★ Does the floor plan provide the space you want for your activities and privacy?
★ Are stairways conveniently located?
★ Is the kitchen centrally located to the rest of the house?
★ Is the kitchen planned so work flows freely from the refrigerator to the sink to the range?
★ Is counter space conveniently arranged?
★ Is the laundry area conveniently located to the bedrooms?
★ Do bathrooms have adequate storage space for towels, toiletries, etc.?
★ Are the bedrooms large enough to meet your family's needs?
★ Is the attic easily accessible, especially if you plan to use it for storage space?
★ Is the garage large enough for the number of cars your family uses?
★ Does the garage provide sufficient storage space?
★ Visit the homes you are considering at different times of the day.
SAFETY PROOF YOUR HOME FOR YOUR CHILDREN
Whether your are just now guessing which color to paint your nursery or have a little one that is ready to crawl, taking preventive measures to childproof your home against unintentional accidents is essential. Even you don't want your children to get into something, it seems that they can always find a way to do so. Specialists in child safety recommend that parents get down on their hands and knees and take a look around the house from a child's viewpoint.
Consider the following room-by-room tips to help make your home safer for your children:
SAFETY MEASURES FOR ALL ROOMS
• Install child-resistant covers on all unused electrical outlets.
• Keep all mini-blind cords out of reach.
• Tape down the corners of area rugs or electrical cords that might trip children.
• Place furniture well away from all windows.
• Keep cigarettes, matches and lighters out of reach.
• Place screened barriers around fireplaces, radiators and portable space heaters.
• Keep firearms and ammunition safely locked away.
• Secure unsteady furnishings.
• Be vigilant about choking hazards. ( Anything that fits inside a toilet paper tube has the potential to choke a child. )
• Secure bookcases to the wall, using shelf brackets attached to the side and/or top of the bookcase, and then screw into the wall.
• Secure or remove heavy or breakable items from tables, as children are likely to grab or shake them, causing whatever is on top to move or fall off.
• Use corner bumpers on furniture and fireplace hearth edges.
• Keep the houseplants high. ( The objective here is two-fold: to keep a falling plant from hurting your child and potentially poisonous houseplants out of reach. )
• Install childproof latches on all cabinets and appliances within a child's reach.
• Keep knives, cleaning supplies, and plastic bags out of reach.
• On stoves, keep the handles of pots and pans turned toward the wall. Never leave cooking food unattended.
• If stove knobs are easily accessible to children, use protective covers to prevent kids from turningthem on.
• Keep chairs and step stools away from counters and stove.
• Keep syrup of ipecac on hand.
• Place infants under one year of age on their backs to sleep.
• Crib bar spacing should be no greater than 2-3/8 inches, smaller than the diameter of a soda can.
• Position the Crib away from all drapery, electrical cords, and windows.
• Be sure the crib sheet fits snugly.
• For crib bumpers, make sure it's firm ( not fluffy ) and secured tightly with at least six ties.
• Remove mobiles and other hanging toys from the crib as soon as a child can reach up and touch them.
• Never use an electric blanket in the bed or crib of a small child or infant.
STAIRS AND HALLWAYS
• Have two safety gates, one at each end of the staircase.
• Brighten dark hallways.
• Install carbon-monoxide ( CO ) alarms and smoke alarms in each room on every level of the home.
WINDOWS AND DOORS
• Mark sliding glass doors with colored tape or stickers to distinguish them from open doorways.
• Place sleeves on doorknobs to prevent toddlers from accessing dangerous areas of the house.
• Use doorstops to ensure that doors can't slam shut.
• Turn down the hot water heater temperature to a maximum of 120 degrees.
• As in the kitchen, lock or tie cabinet doors, and move all soaps and shampoos to higher surfaces ( especially colorful ones, or varieties that have tempting scents like vanilla or strawberry ).
• Place a non-slip mat or stickers on the bottom of your bathtub.
• Put locks on medicine and cleaning supply cabinets.
• Cover the bathtub waterspout with a soft, protective cover.
• Install toilet lid locks.
• Install ground-fault circuit interrupters on outlets near all sinks and bathtubs.
If you are unsure about any of the items listed, ask a professional. Professionals may come to your home to "child or baby-proof" it by installing protectors and locks, while looking for hazards that might go unnoticed. Your family doctor or pediatrician may be a great resource for locating reliable, inexpensive professionals that may perform these services in your area.
SEX OFFENDERS IN TENNESSEE
The Role and Responsibility of the Real Estate Agent in
Tennessee Law TCA 40-39-106 makes some Tennessee Sexual Offender Registry Information about sex offenders who committed certain offenses on or after July 1, 1997, a matter of public record.
Real Estate Agents should forward any questions about Sexual Offenders to the Tennessee Bureau of Investigation's " Sex Offender Registry".
Tennessee Law requires the Tennessee Bureau of Investigation to post information about sexual offenders on their Internet home page.
Any additional Information requested concerning sexual offenders can be should be directed to the TBI at 1-888-837-4170
STIGMATIZED AND PSYCHOLOGICALLY IMPACTED PROPERTIES IN TENNESSEE
The Role and Responsibility of the Real Estate Agent in Disclosing Stigmatized or Psychologically Impacted Properties.
Tennessee Law: TCA 66-5-207 state "...no cause of action shall arise against an owner of real estate or a real estate licensee for failure to disclose that an occupant of the subject real property, whether or not such real property is subject to this part, was afflicted with HIV or other disease which has been determined by medical evidence to be highly unlikely to be transmitted through the occupancy of a dwelling place;
or that the real estate was the site of: An act or occurrence which had no effect on the physical structure of the real property, its physical environment or the improvements located thereon; a homicide, felony or suicide,."
An agent does not disclose any information about Stigmatized or Psychologically Impacted Properties without the written authorization of the property owner. Without authorization, the agent's response to any questions about Stigmatized or Psychologically Impacted Properties should be —"Tennessee Law prohibits me from answering that question".
TENNESSEE PROPERTY DISCLOSURE LAW
The Duties of real estate licensees as stated in the Tennessee Property Disclosure Law TCA 66-5-206.
· A real estate licensee representing an owner of residential real property as the listing broker has a DUTY TO INFORM each such owner represented by that licensee of the owner's rights and obligations under the Property Disclosure Law.
· If a purchaser is not represented by another licensee, the real estate licensee representing the owner of residential real estate and dealing with the purchaser has a DUTY TO INFORM the purchaser of the purchaser's rights and obligations under the Property Disclosure Law.
· A real estate licensee representing a purchaser of residential real property has a DUTY TO INFORM each such purchaser represented by that licensee of the purchaser's rights and obligations under the Property Disclosure Law.
· A real estate licensee working with a purchaser of residential real property has a DUTY TO INFORM that purchaser of the purchaser's rights and obligations under the Property Disclosure Law.
If a real estate licensee performs these duties, the licensee shall have no further duties to the parties to a residential real estate transaction under the law, and shall not be liable to any party to a residential real estate transaction for a violation of the law or for any failure to disclose any information regarding any real property subject to the law.
A cause of action for damages or equitable remedies may be brought against a real estate licensee for:
· Intentionally misrepresenting or defrauding a purchaser,
· Failing to disclose adverse facts of which the licensee has actual knowledge or notice.
The Twenty (20) Common-Law Factors Determining Employee or Common-Law Independent Contractor Status.
The Internal Revenue Service has enumerated twenty (20) factors in Revenue Ruling 87-41 which it considers in determining whether individuals are employees or common-law independent contractors for federal tax purposes. The degree of importance of each factor depends on the occupation and is case specific. When evaluating each of these twenty (20) factors in light of your office practices, remember that a "yes" for a factor weighs in favor of assessing a worker an employee. The twenty (20) factors below:
4. Services Rendered Personally.
5. Hiring, Supervising and Paying Assistants.
6. Continuing Relationship.
7. Set Hours of Work.
8. Full-Time Required.
9. Doing Work On Employer's Premises.
10. Order or Sequence Set.
11. Oral or Written Reports.
12. Payment by Hour, Week, Month.
13. Payment of Business and/or Traveling Expenses.
14. Furnishing of Tools and Materials.
15. Significant Investment.
16. Realization of Profit of Loss.
17. Working for More Than One Firm at a Time.
18. Making Service Available to General Public.
19. Right to Discharge.
20. Right to Terminate.
These are the factors the IRS has used when determining whether a real estate agent is an employee or common-law independent contractor.
Walk Through Checklist
Floor (under rugs)
LIVING AREA AND BEDROOMS
Floor (under rugs)
Ceilings (new stains or holes)
Walls (new stains or holes)
Garage door (openers)
Smoke detectors (check batteries)
Carbon Monoxide detectors (check batteries)
Floor (under rugs)
Walls (new stains or holes)
Ceiling (new stains or holes)
RECORD MAINTENANCE FOR TENNESSEE REAL ESTATE FIRMS
RESIDENTIAL AND COMMERCIAL REAL ESTATE FIRMS ARE REQUIRED BY TENNESSEE LAW TCA 62-13-312. #6 TO PRESERVE FOR THREE YEARS FOLLOWING ITS CONSUMATION, ALL RECORDS RELATING TO A REAL ESTATE TRANSACTION.
( THE FIRM MAY UTILIZE ELECTRONIC OR COMPUTERIZED DATA STORAGE ) .
Those Records Should Include:
1. The Listing Contract or Property Management Contract between the property owner
and the real estate firm.
2. The Agency Disclosure Form between the property owner and the real estate firm's
The Agency Disclosure Form between the real estate firm's sales affiliate and the
buyer, only if the transaction was an Inhouse sale or lease.
(The Law does not require a real estate firm to have copies of Agency Disclosure Forms
from all the parties and sales affiliates involved in a transaction unless it is an Inhouse sale
or lease and the firm has an agency relationship with all the parties involved in the
If the buyer or tenant is represented by or working with a sales affiliate from another real
estate firm, a copy of the Agency Disclosure Form between that sales affiliate and the
buyer or tenant is not required in the transaction file.
3. The Seller Agency Agreement between the property owner and the real estate firm and their sales affiliate.
4. The Buyer Agency Agreement between the buyer and the real estate firm and their
5. Copies of all Offers to Purchase/Lease even those that are that do not become
6. A copy of the Property Disclosure Form, if required by law of the property owner.
A copy of the Exemption Notification if a Property Disclosure Form is not required.
A copy of the Waiver which is required if the property owner refuse to fill out a Property
A copy of the Property Disclosure Addenda from the property owner if there were any
material changes in the physical conditions of the property prior to the closing or a
Certification Addenda from the property owner stating that the condition of the property at
closing is the same as stated on the Property Disclosure form prior to the closing of the
7. A copy of the Lead Base Paint Disclosure if property was constructed prior to 1978.
8. Copies of any other Environmental Disclosures.
9. A copy of the Termite or Pest Inspection Report.
10. A copy of the Contract to Purchase or Lease.
11. A Detail Record of the handling and disbursement of all deposits and earnest money involved in the transaction.
The Broker who accepts or whose sales affiliate accepts a deposit or earnest money from
a buyer or tenant is always responsible for that deposit or earnest
money, regardless of whether such deposit or earnest money is actually held
by some other real estate firm or other person. - TREC Rule 1260-2-.09 #3.
(It appears that a safe policy for the real estate firm accepting the deposit or
earnest money from a party to a transaction would be to always hold the
deposit or earnest money in the firm's escrow account.)
12. A copy of the Closing Statement.
13. Any and all Correspondence pertaining to the transaction.
14. Any and all Notes pertaining to the transaction.
15. Any other Relevant Information pertaining to the transaction which might
be beneficial to you if the real estate firm, Broker, and or sales affiliate is
involved in a lawsuit concerning the transaction.
Recommendation: The Principal Broker or Office Manager should convert the above into a checklist to be followed by every licensee in the office.