Conducting a Safe Open House

By Nicholas T. Smith, Consumer Protection Officer

Seller clients entrust their listing agent to effectively market and expose their property to many prospective buyers. Holding an open house can be an effective marketing tool to gain exposure for a client’s property and can be a great way to find potential buyers. While this additional exposure can be advantageous for selling a home, conducting an open house poses additional risks to a broker and the seller and it is important that brokers take precautions to protect themselves and their client’s property when holding an open house. 

Recently, a man and a woman posing as potential buyers were arrested in connection with multiple thefts occurring during open houses in Southern California. The male suspect distracted the agent conducting the open house while the female suspect went from room to room stealing desired items. Although more rare, brokers also have been victims of violent crimes during open houses, more often when they are alone.

A broker should be sure to discuss with their clients the safety risks of holding an open house and describe the precautions that should be taken to protect the property. When discussing preparations for the open house, a broker should remind their clients to take valuables and prescription drugs with them, or secure them in a safe place. While there is always a possibility of theft from a burglar entering the home under the guise of a potential buyer, the seller stands to lose less when valuables are removed or secured. Additionally, potential burglars who may be “casing” the property to determine if there is anything of value may be less inclined to return later.

Consider taking the following steps to better protect you and your client’s property and ensure a safe open house:

Preparing for a safe open house:

• Enlist the help of a teammate, assistant, spouse or friend to accompany you during the open house, especially with multi-level properties.
• Notify the neighbors of the open house and introduce yourself if time permits. They may notice something out of the ordinary, such as someone removing electronics.
• Consider setting up a webcam to record prospects’ images as they enter the property. Avoid audio without talking first to an attorney about how and when audio recordings are permissible.
• Do not advertise the listing as vacant. Doing so may attract a criminal’s attention.
• Establish escape routes from each level of the house.
• Check for cell phone service in a prior visit to the property and ensure your phone is adequately charged before the open house.
• Arrange to check-in with the office or a buddy at pre-designated times during the open house.

During the open house:

• Park where you can get out quickly and ensure you will not be blocked in.
• Keep your keys and cell phone in hand.
• Be watchful and observant. Pay attention to who is entering the home and take notes if possible (car description, license number, and physical attributes).
• Use a registration system and encourage prospects to sign in.
• Touch base with your office or a buddy at pre-designated times.
• Always follow a prospect, never lead. Avoid attics, basements and small rooms that are difficult to exit.

After the open house:

• Take time to ensure you leave the property as you found it. Ensure everyone has left the property by checking all the rooms.
• Be sure to lock all of the doors, return the key(s) to the lockbox and properly close the lockbox.
• Report to your clients on the open house and ask them to double check to be sure none of their items are missing.

Editors Note: Credit is also attributed to the authors and contributors to the NC Safety Guide including the North Carolina Association of REALTORS ® and the Washington Real Estate Safety Council.

Commission Spotlight: Executive and Administrative Division

This is the first of three articles highlighting the North Carolina Real Estate Commission’s staff and structure. 

The principal purpose of the Real Estate Commission is to protect the interests of members of the general public in their dealings with real estate brokers throughout the state. This is accomplished through:

1. licensing real estate brokers and brokerage firms, and registering time share projects;

2. establishing and administering prelicensing education programs for prospective licensees and postlicensing and continuing education programs for licensees;

3. providing education and information relating to the North Carolina Real Estate License Law and Commission Rules, and 

4. regulating the business activities of brokers and brokerage firms, including disciplining licensees who violate the License Law or Commission rules.

As dictated by N.C.G.S. § 93A-3(a), the Real Estate Commission consists of nine members who serve three-year terms. Seven members are appointed by the Governor and two are appointed by the General Assembly. 

The Commission’s staff is tasked with implementing rules and policy set forth by the Commission. 

As of October 1, 2019, there are 56 Commission staff members, divided between three divisions, Executive & Administrative, Education & Licensing, and Regulatory Affairs.  Miriam Baer is the Executive Director.

This month’s Commission Spotlight is on the Executive and Administrative Division.

The Executive and Administrative Division works to effectively and efficiently administer Commission programs and operations. As Executive Director, Miriam Baer is tasked with management responsibilities as Chief of Staff, and oversight of the Commission’s licensing, education, and regulatory functions.

The Division is supported by eleven full-time staff members.

Primary responsibilities of the Executive and Administrative Division include:

• managing the Commission’s financial affairs;
• overseeing the day to day administrative and operational functions of the office;
• developing, managing and evaluating the Commission’s technological resources;
• managing the Commission’s human resources; and
• developing and publishing print and digital content and publications.

To learn more about the North Carolina Real Estate Commission, go to ncrec.gov or contact us at 919.875.3700.

Disciplinary Actions

JACQUETTE DIAMOND LAND GINYARD (Charlotte) – By Consent, the Commission suspended the broker license of Ms. Land Ginyard for a period of six months effective September 17, 2019. The Commission then stayed the suspension for a probationary period from September 17, 2019 through March 17, 2020. The Commission found that Ms. Land Ginyard, a buyer agent in a residential transaction, failed to maintain records of all the subject transaction documents and failed to make them available for inspection by the Commission. Ms. Land Ginyard was the qualifying broker and broker-in-charge of a licensed firm and failed to notify the Commission within 10 days of its dissolution by the North Carolina Office of the Secretary of State.  

KATRINA LAMURIEL KEOGH (Charlotte) – By Consent, the Commission suspended the broker license of Ms. Keogh for a period of 18 months effective September 17, 2019. The Commission then stayed the suspension for a probationary period from September 17, 2019 through March 16, 2021.  The Commission found that Ms. Keogh, a buyer agent in a residential transaction, submitted an Offer To Purchase and Contract on behalf of her buyer clients which stated that they would be obtaining a conventional loan. The subject property went under contract but failed to close as the buyer could not close on two separate occasions. Ms. Keogh failed to timely inform the seller that her buyer client could no longer obtain a conventional loan and must now pursue a VA loan and that the buyer’s funds to close would not be available until they sold their current home. Ms. Keogh told the Listing Agent that an appraisal had been performed on the subject property when, in fact, it had not yet been scheduled. Ms. Keogh failed to forward her buyer client’s signed Due Diligence extension request to the Listing Agent. Ms. Keogh failed to respond to the Commission’s Letter of Inquiry within 14 days.

PIERRE MAREE (Charlotte) – By Consent, the Commission reprimanded Mr. Maree effective September 25, 2019. The Commission found that Mr. Maree, also licensed as a real estate broker in South Carolina, acted as listing agent in a transaction. Mr. Maree was aware of a dispute between buyer and seller regarding earnest money disbursement upon termination of a contract and failed to disclose the dispute when he delivered to the escrow agent an earnest money release agreement that had been altered by his seller-client but not initialed by the buyer. The escrow agent disbursed the $2,000 earnest money deposit to the seller before being informed about the dispute. Mr. Maree has paid the buyer $2,000 from his own funds.

SUSAN A. RICHTER (Durham) – By Consent, the Commission reprimanded Ms. Richter effective December 15, 2019. The Commission found that Ms. Richter, acting as a listing agent, misrepresented in her advertising that the subject property had a slate roof and a complete central vacuum system. The buyers discovered the misrepresentation regarding the roof during the due diligence period. The buyers discovered that the central vacuum system did not have a motor or other necessary components after closing. Ms. Richter has paid $1,100 out of her own funds for the central vacuum system.

Reminder: If you reinstate, don’t forget to activate!

When a broker’s license is reinstated, the license is on inactive status.  Before the broker may begin legally practicing brokerage again, the license must be activated. 

To activate a license, the License Activation and Broker Affiliation form (REC 2.08) must be completed online and submitted to the Commission. 

Do you need to reinstate your license? Click here for instructions.

Do you need to activate your license? Click here to access the activation form.

Need further assistance? Contact the Education and Licensing Division at 919.875.3700.

Appearances

Sheryl B. Graham, Consumer Protection Officer, spoke to the Central Carolina Association of REALTORS® in Albemarle and to Keller Williams Realty Platinum in Garner.

Disciplinary Actions

ERIKA LEE REED (Greensboro) – The Commission accepted the voluntary surrender of the broker license of Ms. Reed for a period of three years effective August 14, 2019. The Commission dismissed without prejudice allegations that Ms. Reed violated provisions of the Real Estate License Law and Commission rules.  Ms. Reed neither admitted nor denied misconduct.

BENITA WILLIAMS SCOTT (Raleigh) – By Consent, the Commission suspended the broker license of Ms. Scott for one year effective August 14, 2019. The Commission then stayed the suspension and instead reprimanded Ms. Scott on certain conditions. The Commission found that Ms. Scott in or around 2002 was licensed as a surety bail bondsman by the North Carolina Department of Insurance (NCDOI) and in or around 2005 was licensed as a professional bondsman by the NCDOI. On or about October 4, 2018, the NCDOI revoked the professional and surety bail bondsman licenses of Ms. Scott for multiple violations of N.C.G.S. § 58-71.

A New Deadline for Postlicensing Education

Beginning July 1, 2020, Rule 58A .1902 will require a Provisional Broker to complete all three 30-hour Postlicensing courses within 18 months of initial licensure in order to maintain active license status. 

More information about this important change is provided during General Update (GENUP) and Broker-in-Charge (BICUP) courses throughout the year. Also, if you are a provisional broker, be on the lookout for email communications from the Commission about the changing education deadlines. 

If you have further questions regarding this rule change, please contact the Education and Licensing Division at 919.875.3700.

Licensees as of August 1, 2019

Spotlight: Douglas A. Fox, Commissioner

Douglas A. Fox has served on the North Carolina Real Estate Commission since November 2018. He is a senior partner and attorney with Yow Fox & Mannen, LLP, in Wilmington, NC. Mr. Fox’s practice areas are business law, collections, and real estate, along with wills and estates. Mr. Fox’s law partner, Jerry A. Mannen, Jr., was on the North Carolina Real Estate Commission from 2006-2012.

Mr. Fox graduated from Guilford College with a Bachelor’s of Art in 1970 and received his Juris Doctorate degree in 1973 from the Cumberland School of Law of Sanford University. He was admitted to the North Carolina State Bar in 1974. He has also been admitted to practice before the U.S. District Courts, specifically the Eastern and Middle Districts, and the U.S. Court of Appeals, Fourth Circuit.

Mr. Fox served as President of New Hanover County Bar Association from 1986-1987. He is a member of the North Carolina State Bar, North Carolina Academy of Trial Lawyers, and Delta Theta Phi, a legal fraternity.

Doug is married to Marcie Fox. They have been married for over 30 years.  He has two sons, David, who lives in Charleston, SC,  and Allan, who resides in Wilmington, NC. If Doug is not in the office or spending time with his family, you can find him on a golf course.

On-site Septic System or Public Water and Sewer – Do Your Research

By Danielle Alston, Consumer Protection Auditor

Since 1993, there have been at least 8 articles published by the Commission on the importance of reviewing septic permits in order to accurately advertise the number of bedrooms for a listed property. This subject has also been covered in at least 3 General Update courses. However, the Commission continues to receive complaints about misrepresentations by overstating the number of bedrooms for a property served by a septic system. If a broker decides to advertise the number of bedrooms for a property, that advertisement should accurately reflect the bedrooms supported by the septic system. In other words, be sure to check the septic permit, specifically, the number of bedrooms the septic permit allows.

Unfortunately, many complaints about septic permit misrepresentations are not received until years after the misrepresentation has been made.   The buyer is now ready to sell the home and cannot list it for the same number of bedrooms it was advertised as having when the buyer purchased it. While listing agents are primarily responsible for researching and reviewing septic permits, selling agents should also make it a practice to ask to review permits as a service to their clients. Reliance on old listings only adds to the misrepresentations over several transactions.

Sometimes the original septic permit for a property cannot be located due to the age of the property.  Be careful if you are relying on a bill to determine that a property is on city water or sewer. In some cases, the property may only have public water or sewer, but not both. Accuracy is important.  If a permit cannot be located after a reasonable search, a broker should document search efforts and obtain something in writing from the municipality stating that the permit cannot be located.  The broker can then advertise the  existing number of bedrooms with the disclosure that the permit records are not available and therefore capacity of the system could not be verified. 

Both listing and selling agents should be able to explain to their clients the value of obtaining a septic permit and what information such permits provide. Disclosures must always be made so that the potential buyer is made aware of material facts before an offer is made.

REMINDER: The Real Estate License Law prohibits misrepresentation, omission, or concealment of material facts; a course of misrepresentation through false advertising; and improper, dishonest, or fraudulent conduct. Willful or negligent misrepresentation of the occupancy or the design limits of a property’s on-site sewage disposal system may result in disciplinary action by the Commission.