consumer Archives - Real Estate News and Commentary

October 28, 2019October 28, 2019

Protecting Home Buyers

Of the handful of new Maryland real estate related laws that go into effect this week, two are highly important for you to know. These are passed for the purpose of protecting home buyers and sellers. One protects your confidential information, and the other concerns your earnest money deposit on a Maryland home sale.

Protecting home buyers and sellers’ confidentiality is HB1228/SB807, which was effective October 1^st. Besides cleaning up the definition of a brokerage relationship, the bill addresses client confidentiality. Unless a client consents in writing, Maryland licensed real estate brokers and agents may not disclose confidential information received from or about a client to any other party and/or their representative (including their real estate agent). The non-disclosure of confidential information protects past and present clients, and now is extended to potential clients as well.

Confidential information is defined as: a seller/landlord willing to accept less than the listing price; a buyer/tenant willing to pay more than their offer; motivation of a client; the need or urgency to buy, sell, or rent; any facts that led the client to sell, buy, or rent; and also relates to the client’s negotiating strategy. However, the duty to maintain confidentiality doesn’t apply to the disclosure of material facts about a property (which a home seller is also required to disclose).

Protecting home buyers deposits is effective October 1^st. HB222 requires a written agreement between the buyer, seller and the escrow agent holding the earnest money deposit (EMD). The EMD is described as “consideration” for a seller to accept an offer. An escrow agent is the entity who accepts and holds the earnest money. The EMD is credited to the buyer at the time of settlement. However, if sale does not settle, the disbursement of the EMD can become contentious. Under certain circumstances, the contract of sale is clear about when the buyer may receive their EMD. However, real estate is not always black and white, and there are occasions when a dispute arises about whom is entitled to receive the EMD.

It used to be common practice for a real estate broker to accept and hold the EMD. Real estate brokers are bound by law as to how to handle and care for the EMD. However, brokers are increasingly reluctant in accepting EMDs for a number of reasons. Instead, brokers are directing their agents to have title companies to hold these deposits. But home buyers (and sometimes their agents) don’t realize that a title company is regulated differently than a real estate broker, and the EMD may not be handled as expected.

HB222 is important because it fills the gap for escrow agents who do not already have specific guidelines for handling EMDs. (HB222 doesn’t apply to Maryland real estate brokers and agents, and Maryland registered home builders selling new homes, as they are already regulated). The bill provides transparency so both the buyer and seller understand the terms for holding the EMD.

The bill requires an escrow agent to enter into a written agreement with the buyer and seller when the escrow agent agrees to hold an EMD for a Maryland home sale. The written agreement must contain the amount of the EMD; the date the EMD was given to the escrow agent; the responsibility of the escrow agent to notify the buyer and seller if the EMD funds are “dishonored” (e.g., bounced check); the conditions under which the escrow agent may release the EMD; and the process to address disputes over the release of the EMD.

Original article is published at https://dankrell.com/blog/2019/10/28/protecting-home-buyers/

By Dan Krell
Copyright© 2019

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Disclaimer. This article is not intended to provide nor should it be relied upon for legal and financial advice. Readers should not rely solely on the information contained herein, as it does not purport to be comprehensive or render specific advice. Readers should consult with an attorney regarding local real estate laws and customs as they vary by state and jurisdiction. Using this article without permission is a violation of copyright laws.

April 15, 2019July 22, 2019

Over-aggressive agent harassment

Something has happened in the last few years where unsolicited phone calls and text messages have hit critical mass. It’s bad enough that unscrupulous individuals take advantage of technologies, such as phone number spoofing, to scam consumers. But it’s not a good sign for an industry when “professionals” abuse technology without regard to the law. You’re not alone if you’re feeling harassed by over-aggressive real estate agents who place multiple unsolicited calls and texts daily. There is a way to stop the over-aggressive agent calling and texting harassment.

When over-aggressive real estate agents abuse technology

Like other industries, technology has been integral in evolving the business of real estate in the last twenty years. As a result of proper application, consumers are empowered. However, some technologies are abused by real estate agents. The combination of aggressive sales tactics and technology can sometimes go over the line and become harassment. Recent lawsuits highlight alleged abuse of technology by real estate agents.

A recent class action lawsuit filed in California is taking on real estate agents who “cold call.” Realtor Magazine (Cold Calling in Real Estate Under Fire in New Lawsuit; magazine.realtor; April 8, 2019) reported that the suit originated from a request for the defendant brokerage to stop directing their agents to make unsolicited calls. The suit alleges that calling without consent violates the Telephone Consumer Protection Act and unsolicited auto-dialer calls violate the Federal Trade Commission’s National Do Not Call Registry.

The plaintiff alleges that he received unsolicited calls from multiple agents affiliated with the same brokerage to his cell phone, which is listed with the National Do Not Call Registry. The calls solicited to re-list his home after it did not sell. Although it’s sometimes easy to find a phone number (typically a land line) associated with a property, the plaintiff said his cell phone was not associated with the property listing in any way.

Two other lawsuits filed earlier this month in Florida focus on unsolicited texting. In one, the plaintiff alleges they received thousands of unsolicited text messages, violating the Telephone Consumer Protection Act, advertising homes for sale. The other alleges the use unsolicited texting to find potential home sellers.

Haru Coryne, for the Real Deal, reported that the suits are really about the abuse of auto-dialer technology that transmits “thousands” of text messages from a spoofed local number (Unsubscribe! Resi brokerages sued over text message spam; therealdeal.com; April 4, 2019). The founder of a popular real estate technology platform acknowledged to Coryne that real estate agents who use these technologies without knowing the law can get into trouble. He further stated, “A typical real estate agent will have five, six, seven programs, probably never took the time to see what the law is. [But] Just because they offer it doesn’t mean you can abuse it. It’s like eating candy and wondering why you’re getting fat. You can’t take technology and abuse it and wonder why you’re getting sued.”

There are many platforms selling these services to real estate agents. New technologies mine data (including emails and phone numbers) and “communicate” with consumers (including internet auto-dialers). There are several popular services that sell contact information (including cell phone and email) for expired listings and Sale by Owner. The data can be used in conjunction with text/email broadcasting, phone number spoofing, and auto-dialers. Many consumers feel harassed by the over-aggressive agent because they are bombarded with auto-dialers, texts, and emails, after opting-out or asking the agent to stop.

Stopping the over-aggressive agent

If you want to stop unsolicited calls and texts from the over-aggressive agent, simply opt-out. If they continue, contact the agent. Contacting the agent should put an end to the unsolicited communication. However, you may have to call the agent’s broker. If, in the slight chance, you continue to be bombarded with unsolicited communication after opting out and contacting the agent’s broker, you may have to consult an attorney.

This can be a watershed moment for the industry to educate consumers about professional Realtors and reign in the “bad actors.” The National Association of Realtors (nar.realtor) and local Realtor associations advocate for the responsible use of technologies and cold calling. With regard to telemarketing, the NAR states, “There’s no fine line or gray area: There are laws you must not break. But you still have a lot of flexibility on the right side of the law.”

By Dan Krell
Copyright © 2019.

Original located at https://dankrell.com/blog/2019/04/15/over-aggressive-agent-harassment/

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August 29, 2018June 3, 2020

Hire a reputable mover

mover checklist — Moving Checklist (from Federal Motor Carrier Safety Administration fmcsa.dot.gov)

Moving is stressful enough without having to deal with a rogue mover. Before your hire a mover, do your research and know your rights. Your rights may vary depending if your move is intrastate or interstate. An intrastate move is within the same state, while an interstate move is between states. Although intrastate movers are not licensed by the state of Maryland, there are a rules and consumer protection laws governing their business. However, interstate movers must comply with Federal regulations.

Hiring a mover to move within Maryland (intrastate)

The Consumer Protection Division of the Maryland Attorney General published The Consumer’s Edge: Hiring a Mover? Protect Yourself! The publication outlines your rights for a move within the state of Maryland (marylandattorneygeneral.gov). The pamphlet advises that estimates must be written, and must specify if it’s binding or non-binding. Binding estimates are prohibited to change, while non-binding estimates in Maryland are capped and cannot exceed 25 percent of the original estimate. Be wary of low-ball estimates, or a mover who does not ask a lot of questions about your possessions. Don’t sign a blank or incomplete estimate.

If your move is within Maryland, consult the Maryland Movers Conference. The MMC is a non-profit organization that is part of the Maryland Motor Truck Association, and works with “governmental authorities and consumer groups to promote the highest standards for the moving industry in Maryland.” The organization established a Registered Mover Program, where movers abide by a code of ethics and other rules. You can view valuable consumer info and the MMC’s list of member movers at their website (mdmovers.org).

Hiring an interstate mover

mover pamphlet — FMCSA Ready to Move Brochure
(fmcsa.dot.gov)

If your move is interstate, your mover is regulated by the Federal Motor Carrier Safety Administration of the US Department of Transportation. The FMCSA website “Protect Your Move” (www.fmcsa.dot.gov/protect-your-move) provides an abundance of information to help you choose a reputable mover as well as tips and a checklist to help make your move less hectic. The FMCSA maintains a registry of legitimate interstate movers from which you can search and view licensing, insurance, as well as complaints.

During the planning stage of your interstate move, Federal regulation requires your mover to provide you with a copy of the booklet “Your Rights and Responsibilities When You Move” and a copy of FMCSA’s brochure “Ready to Move.” These publications (available on the FMCSA website) offer insight to make an informed decision, as well as understand your consumer rights in case something goes awry.

The FMCSA suggests that estimates that sound too good to be true are often a way for scammers to get your business. What are the red flags for which to be on the lookout? Be wary of:

Estimates given without onsite inspection of your possessions
A demand for cash or a large deposit
Blank or incomplete documents
Refusal to provide a written estimate
Movers who claim to be insured without providing proof
A mover who generically answers the phone “movers” instead of using the company’s name
No address or insurance info on the company’s website
Use of a rental truck instead of a company branded truck.

Moving Rights and Responsibilities — Rights & Responsibilities Booklet (fmcsa.dot.gov)

Movers must deliver your possessions. Call the police if a mover threatens to not deliver for any reason. Interstate movers may be in violation of Federal law if they hold your shipment “hostage.” The FMCSA offers some recourse if you feel victimized by an interstate mover or broker. The Protect Your Move Website has an online tool to make complaints. A complaint may trigger a Federal enforcement investigation against the mover.

By Dan Krell.
Copyright © 2018.

Original published at https://dankrell.com/blog/2018/08/29/hire-reputable-mover/

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August 12, 2018July 21, 2019

Real estate big tech

The business of real estate seems to be turning away from actually selling homes and wants to be housing big tech. Nothing is as it seems. Real estate companies are now technology companies, and technology companies want more of your information to control your opinion and behavior.

How much control should big tech have over what you think and do? It’s a compelling controversy that is currently being debated. It’s not clear when the discussion exactly began, but there have been many who have been wary of big tech for decades. Even President Eisenhower had something to say about it in his second 1961 farewell speech (the first being famous for his warning of the military-industrial complex) he also warned. “…we must also be alert to the equal and opposite danger that public policy could itself become the captive of a scientific-technological elite.”

Once called paranoid, those who feared big tech are being vindicated by the acknowledgments of data collection and leaks to third party users. Additionally, reports of censorship and behavioral control are slowly making its way to public awareness. Sounding like a movie plot about a dystopian future, consider the internal Google video that was leaked by The Verge earlier this year (Google’s Selfish Ledger is an unsettling vision of Silicon Valley social engineering; theverge.com; May 17, 2018). The leaked video (seen here) discusses the use of data to not only change opinions and shape viewpoints that correspond with the company’s values, but to change behavior and shape society to “a directed result.”

Imagine being told where to buy a home, and which real estate services to use based on your behavioral data. Big tech’s “guiding” of real estate consumers to homes and neighborhoods based on behavioral modeling algorithms seems like it could save time and effort for the consumer. But it could also be considered steering, which is considered to be a fair housing no-no.

real estate big tech — Real estate tech (infographic from nar.realtor).

But big tech wants more of your data, at best to improve modeling algorithms. According to a report in the Wall Street Journal (Facebook to Banks: Give Us Your Data, We’ll Give You Our Users; wsj.com; August 6, 2018), Facebook has been in conversations with banks to access users’ accounts and transactions. The social media platform denied the story the next day. However, the Wall Street Journal reporting by Emily Glazer, Deepa Seetharaman and AnnaMaria Andriotis is compelling given the report’s sources. Some experts are also talking about Facebook wanting to become a consumer marketplace.

Zillow is also allegedly expanding its data usage. Zillow announced this week of their acquisition of Mortgage Lenders of America. The purchase is said to boost Zillow’s “Offers” program, offering mortgages for home buyers making offers on the site. However, GeekWire reported (Zillow acquires Mortgage Lenders of America, posts $325M in Q2 revenue, up 22%; geekwire.com; August 6, 2018) Zillow’s CEO Spencer Rascoff as saying in the company’s second-quarter earnings call:

“We’re taking our huge advantages, which are our audience and our brand and our resources, and expanding into other business vertically… .”

And it’s not just big tech that wants your data. Traditional companies are realizing the potential of behavioral modeling and guiding consumer behavior. Inman reported earlier this year that co-founder Gary Keller proclaimed Keller Williams a tech company (What the hell is Keller Williams doing? Lingering questions from the Vision Speech; inman.com; February 28, 2018). Keller proclaimed:

“We are a technology company. No. 1 that means we build the technology. No. 2 that means we hire the technologists … We are not a real estate company anymore.”

Big tech is losing touch with the average consumer. Home buyers and sellers don’t want to be told what to do. Rather, they want to make organic decisions. While large real estate brokers seem to be moving away from actually selling homes to be real estate big tech, home buyers and sellers are turning to human real estate agents. Instead of algorithms, buyers and sellers value trusted Realtors to help with the process.

By Dan Krell.
Copyright © 2018.

Original located at https://dankrell.com/blog/2018/08/12/real-estate-big-tech/

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April 12, 2018December 13, 2022

Social media and housing

You should have already realized that all of your internet activity, such as social media, search engines, etc., leaves your digital fingerprints. In today’s interconnected world, you should assume your online profile, pictures and posts become the intellectual property of the online entities you use . So, it should not faze you that Facebook founder and CEO Mark Zuckerberg testified before Congress this week because of ongoing privacy concerns. This week’s congressional dog and pony show will most likely not reveal much. Nor is it expected to change social media’s influence on the public.

Does social media really affect your opinions and decision making? Maybe.

Content providers have been criticized for deciding what people view through alleged censorship. Besides your online social interactions and connections, the ads you see can also influence your opinions and behavior. Consider Facebook’s targeted advertising system, which has been criticized for violating the Fair Housing Act. A recent lawsuit alleges that certain groups are being discriminated against because advertisers can target ads based on age, gender, disability, family status, among other criteria (see Facebook Vowed to End Discriminatory Housing Ads. Suit Says It Didn’t; nytimes.com/2018/03/27/nyregion/facebook-housing-ads-discrimination-lawsuit.html).

In the internet age, data collection is big business. Data collection allows marketing firms to target classes with their clients’ products and opinions. Content providers have not only been criticized for collecting volumes of personal data, but also for manipulating search results and viewable content. As it turns out, the FANGs (a collective term used for content providers, such as Facebook, Amazon, Netflix, Google) not only collect your data but can influence your opinions and behavior. Especially when it comes to buying or renting a home.

You can surmise that real estate content providers (such as Zillow and Realtor.com) shape your opinions too! They publish opinions and research about the housing market. They also can influence your choice of real estate professionals. They promote agents who pay for placements on their sites to get consumer leads. These real estate professionals touted as “local experts.”

Social media influences housing decisions

A landmark study found direct evidence of social media’s impact on real estate choices. The 2017 study by Baily, Cao, Kuchler, and Stroebel (The Economic Effects of Social Networks: Evidence from the Housing Market; July 4, 2017; Available at SSRN: dx.doi.org/10.2139/ssrn.2753881) used Facebook data to explore the multiplicity of individuals’ social networks, and then analyzed the effects of people’s interactions on their housing decisions.

They found that, indeed, social media does influence decisions on housing. The research suggests that social media influences a person’s housing market expectations. When friends experience home price increases, home buyers will pay more for a home and/or buy a larger home. Additionally, renters are more likely to buy a home. Likewise, when friends experience “less positive house price changes,” home sellers are more likely to accept a lower sale price. The data also indicates that people will consider real estate an appealing investment when friends experience large home price increases.

The authors acknowledged that although this study examined social media’s influence on real estate outcomes, they suggest that effect is broader and can be applied to other subject matter.

Content providers wield great power. They manipulate news feeds via algorithms. They can also decide who they can ban from their sites. It’s clear that social media’s influence goes beyond data collection. It’s not only the social interaction among your connections that affect your opinions and behaviors. It’s also the paid ads and promoted opinions that appear alongside your friends’ posts that solidify expectations and opinions as gospel.

By Dan Krell
Copyright © 2018

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