Real Estate Q&A’s

DRG blog

Find answers to common real estate questions in the DESKTOP REFERENCE GUIDE. This is a great guide to laws, rules and regulations pertaining to real estate.

You’ll find Q&A’s on all kinds of topics including Department of Commerce Regulations, Environmental Issues, Property Tax, Short Sales and more.

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Here are a few examples:

Q: Is the seller required to disclose the presence of pets in the home? 

ANSWER-

Many people have allergies to pet dander and/or pet fur. Dander and fur can remain present well after the pet has no longer been on the premises. The presence of these allergens would have an adverse affect on a buyer’s use and enjoyment of the property, and therefore, is considered a material fact and needs to be disclosed.

Q: Can I use my team’s name in our advertising?

ANSWER-

blog Q&AAny advertising by a licensee must include the real estate brokerage name more prominently displayed than the licensee’s name for the purchase, sale, lease, exchange, mortgaging, transfer, or other disposition of real property, whether the advertising pertains to the licensee’s own property or the property of others. If a salesperson or broker is part of a team or group within the brokerage, the licensee may include the team or group name in the advertising only under the following conditions:

  • the inclusion of such team or group name is authorized by the primary broker of the brokerage to which the salesperson or broker is licensed; and
  • the real estate brokerage name is included and more prominently displayed than the team name or group name in the advertising.

The following two options would be acceptable forms of using team names in real estate advertising:

The Smith Team at ABC Realty; or

The Smith Group

ABC Realty

Please see MN Statute 82.69 for more information.

View more Q&A’s in the DESKTOP REFERENCE GUIDE

The Minnesota REALTORS® is the largest professional trade association in the state with more than 17,000 members who are active in all aspects of the real estate industry.

Department of Commerce Regulations – 3 Tips on Compensation

  1. A licensee shall not accept compensation or other consideration, including referral fees, for the performance of any acts requiring a real estate license from any person except the real estate broker to whom he is licensed or to whom he was licensed at the time of the transaction.
  2. A licensee shall not accept, give or charge any undisclosed commission or realize any direct or indirect compensation that is paid to or for the benefit of the licensee on an expenditure made for a principal. An example of this would be commissions received on homeowner warranty packages. Such a commission must be disclosed.
  3. A licensee may not pay any portion of his/her compensation to an unlicensed person except a licensee may pay part or all of his/her compensation to a principal to the transaction in which the licensee is involved, (i.e. buyer’s agent sharing his/her compensation with the buyer, a listing agent sharing his/her compensation with a seller). If a licensee is sharing his/her compensation with a party to the transaction who is not being represented by the agent, the agent should advise his/her client that he/she is paying a portion of the compensation to the other party to the transaction.

The Minnesota Association of REALTORS® is the largest professional trade association in the state with more than 17,000 members involved in all aspects of the real estate industry.

5 Key Principles to a Sound Data Security Program

The FTC has set forth the following five key principles for businesses to follow when creating a data security program:

  1. Take Stock. Know what personal information you have in your files and on your computers.
  2. Scale down. Keep only what you need for your business.
  3. Pitch it. Properly dispose of what you no longer need.
  4. Lock it. Protect the information that you keep.
  5. Plan ahead. Create a plan to respond to security incidents.

PRACTICE TIP: If your brokerage does not have a legitimate business need for personal identifying information – then don’t collect it. If there is a legitimate business need for the information, then keep it only as long as it’s necessary. Once that business need is over, then properly dispose of it.

The Minnesota Association of REALTORS® is the largest professional trade association in the state with more than 17,000 members active in all aspects of the real estate industry.

2 Major Misconceptions by Real Estate agents with Respect to Procuring Cause

  1. Many agents believe that if they have a Contract for Exclusive Right to Represent Buyer or a Buyer Facilitator Services Contract and are involved in a commission dispute, they are automatically entitled to the cooperating compensation. That is not true. However, there may be offers of compensation only made to buyer brokers who are under contract. This would bar other procuring cause questions as there would be no other offers of compensation.
  2. Many agents believe that if their advertising attracted a buyer to a listed property and they are the agent who first shows the buyer the property, they are automatically entitled to the cooperating compensation. That is not true.

There two misconceptions arise out of real estate agents not understanding the fundamental elements of procuring cause as outlined above.

The Minnesota Association of REALTORS® is the largest professional trade association in the state with more than 17,000 members who are active in all aspects of the real estate industry.

Q: What is the process for filing a dispute against another REALTOR?

Answer:

If a dispute arises between two brokers as to who was the procuring cause, that dispute must be submitted to the MNAR Professional Standards Committee for resolution if the brokers cannot independently agree on a resolution of the dispute.

If the brokers involved are not able to agree on a resolution of the dispute between themselves, they may wish to voluntarily submit to mediation through the MNAR whereby a Mediation Officer can be appointed to assist them in resolving the controversy rather than having the matter decided by an Arbitration Hearing Panel.

The Code of Ethics encourages full awards or no awards; split awards are only made in exceptional cases. It is this rule that should prompt brokers who are involved in a commission dispute to try to resolve the issue by mutual agreement rather than run the risk of losing the entire commission through a decision by an Arbitration Hearing Panel.

If the brokers cannot independently resolve the dispute, do not agree to mediate the dispute, or mediate without success, then an Arbitration Hearing Panel will be appointed through the Professional Standards Committee and that Arbitration Hearing Panel is charged with making a determination based upon procuring cause.

The Minnesota Association of REALTORS® is the largest professional trade association in the state with more than 17,000 members who are active in all aspects of the real estate industry.

Q: I have a contractual dispute (or a specific non-contractual dispute) with another REALTOR member. Can I bring them to court?

Answer:

Under the terms of membership in the National Association of REALTORS® (“NAR”) and pursuant to Article 17 of the Code of Ethics of the NAR, Minnesota REALTORS® are obligated to submit their contractual disputes and specific non-contractual disputes with other REALTORS® to the Professional Standards Committee of the Minnesota Association of REALTORS® (“MNAR”) for resolution. REALTORS® are strictly prohibited from going to courts of law to resolve their disputes with other REALTORS®, unless both parties agree not to use the Association’s services.

The Minnesota Association of REALTORS® is the largest professional trade association in the state with more than 17,000 members who are active in all aspects of the real estate industry.

Q: How does a real estate licensee who engages strictly in commercial real estate business apply for the exemption?

Answer:

Real estate salespersons and real estate brokers engaged solely in the commercial real estate business can apply for the exemption form the agency law, fair housing law and the required module CE requirements and test by filing a verification of this status with the Commissioner of the DOC.

The Minnesota Association of REALTORS® is the largest professional trade association in the state with more than 17,000 members who are active in all aspects of the real estate industry.

Q: How do I file an ethics complaint?

Answer:

  • Complete form #E-1 (Ethics Complaint) – making sure that you sign and date the form.
  • Attach a written summary of the situation and any documentation (such as listing agreements, purchase agreements, buyer contracts or disclosure forms) which support your complaint.
  • Complaints must be filed within 180 days of when the facts constituting the matter complained of could have been known in the exercise of reasonable diligence or the date of closing the transaction, whichever is later.
  • Include one (1) copy of the complaint form and all attachments.

For complete details on the ethics complaint process, go HERE

The Minnesota Association of REALTORS® is the largest professional trade association in the state with more than 17,000 members who are active in all aspects of the real estate industry.

4 Tips on Disclosure and Contracts

  1. An Agency Relationship in Real Estate Transactions form must be presented to a buyer/tenant and seller/landlord at first substantive contact with that party. This is a disclosure form, NOT a contract, although it does ask for the party’s signature as an acknowledgement. First substantive contract generally means before discussing financial, confidential or motivational information with a consumer.
  2. Listing contracts be signed before offering/advertising to property for sale or lease.
  3. Buyer/Tenant representation contracts must be signed before taking any action to represent a buyer/tenant and before a purchase agreement or lease agreement is signed.
  4. A contract is not required to act as a facilitator when working with a buyer/tenant. However, when acting as a facilitator and working with a buyer/tenant, a Buyer/Tenant Facilitator Services Contract may be wise in order to insure compensation is received for services provided, to establish an exclusive relationship so other agents are not intruding on the relationship between the facilitator and the buyer/tenant and/or to specifically define the services to be provided. (While most listing agents will use an Exclusive Right to Sell/Lease Listing Contract, a Seller/Owner Leasing Facilitator Services Contract may be used in listing property for seller/landlord.)

The Minnesota Association of REALTORS® is the largest professional trade association in the state with more than 17,000 members who are active in all aspects of the real estate industry.

Q: What logos am I required to have on my business cards and advertisements?

Answer:

There is no statutory requirement or any National Association of REALTORS® (“NAR”) policy that dictates which logos you are required to have on your business cards or in your advertising. However, your broker may have a policy in place. Please check with your office policies on which logos you must use.

PLEASE NOTE: If you are using any of the NAR logos (i.e. the REALTOR® “R”, any designation logos), please be sure to review the graphics standards on how to use these logos. You can download the REALTOR® “R”, as well as view the graphics standards HERE

RESOURCES ON ADVERTISING

National Association of REALTORS®

  • Download the REALTOR® Logo: HERE
  • Other REALTOR® Logos: HERE

Minnesota Statutes

The Minnesota Association of REALTORS® is the largest professional trade association in the state with more than 17,000 members who are active in all aspects of the real estate industry.