The statistics here generally reflect the activities of the Real Estate Commission during the period from May 1, 2008 to April 30, 2009.
Contact
• 246,609 telephone calls
• 1.5 million+ Web site “hits”
Publications
• 640,000+ publications distributed to brokers, consumers, applicants
Technology
• 8,645 student rosters electronically processed for CE courses and 859 for post licensing courses
Licensing
• 457,468 license records changed
• 5,663 applications processed for licenses by examination
• 5,273+ license examinations administered
• 2,993 licenses by examination issued
• 339 licenses issued by reciprocity
• 1,051 firm licenses issued
• 209 expired, surrendered and suspended licenses reinstated
• 2,243 Certificates of License History issued
• 216 license applications reviewed by Commission for character issues
• 106 license applicant conferences conducted
Education
• 7 new private real estate school licenses issued and 66 renewed
• 27 real estate instructors approved (a 19% increase) and 109 renewed
• 83 new continuing education elective courses approved (for a total of 437 courses)
• 28 new continuing education sponsors approved (for a total of 231)
• 13 new continuing education Update Course instructors approved (for a total of 190)
• 41 Broker-in-Charge Course sessions conducted for 2,027 licensees
Audits/Investigations
• 152 field investigations completed
• 196 trust accounts examined
• 373 persons interviewed
• 13 trust account sessions conducted for 310 students
• 1,848 students instructed for trust account portion of BIC course
Legal
• 1,037 case (complaint) files opened and 1,101 closed
• 33 licensees reprimanded
• 70 licenses suspended
• 70 licenses revoked
• 20 licenses surrendered
• 95 cases with conditional remedies
This article came from the October 2009-Vol40-2 edition of the bulletin.
By Charlene D. Moody
Deputy Legal Counsel
The Real Estate Commission often gets calls from licensees and homeowners seeking alternative ways to bring about sales. One such method suggested by callers is to raffle a home. The seller would sell raffle tickets, the winning ticket-holder would receive the property, and the seller would receive the proceeds.
In the past, the answer was clear that under North Carolina law, no real estate could be offered as a raffle prize under any circumstance. However, in May 2009, the N.C. General Assembly amended N.C.G.S. §14-309.15 to allow real property to be offered as a prize in a raffle by certain organizations.
The maximum appraised value of the real property to be raffled is $500,000 for any one prize and the total appraised value of all real estate prizes offered by one nonprofit organization may not exceed $500,000 in any one calendar year.
Licensees must note that the statute authorizes only nonprofit organizations or government entities to conduct raffles.
Sellers might ask if they would qualify if they donated a portion of the raffle proceeds to a charity. However, the statute provides that the proceeds of the raffle may not be used to compensate any person to conduct a raffle. The Commission, therefore, takes the position that the seller may not receive any part of the raffle proceeds nor may a licensee receive any fee or commission from the raffle proceeds.
A person conducting a raffle in violation of N.C.G.S. §14-309.15 shall be guilty of a Class 2 misdemeanor.
Additionally, licensees and the public should be aware that there may be surprising tax consequences of winning a real estate raffle. Licensees should advise any participant in such a raffle to consult a tax advisor concerning the tax consequences to the winner. For example, in the current tax year, the home may be reportable as ordinary income, leading to a large income tax bill.
Further, when the winner decides to sell the home, he or she may encounter a large capital gains tax because the cost basis for the home will be the ticket price rather than the value of the home.
This article came from the October 2009-Vol40-2 edition of the bulletin.
(The following is excerpted from ARELLO® Boundaries, the newsletter to members of the Association of Real Estate License Law Officials.)
The North Carolina Real Estate Commission recently joined numerous federal agencies and the state’s Commissioner of Banks in announcing the resolution of an inter-agency investigation of Beazer Homes, a home building company based inAtlanta, Georgia, with operations in at least 21 states, and its wholly-owned subsidiary, Beazer Mortgage Corporation.
In a criminal Bill of Information filed along with a Deferred Prosecution Agreement resolving the case, the United States Attorney for the Western District of North Carolina (Charlotte Division) charged the company with engaging in massive and complicated schemes that included discount point fraud, down payment assistance fraud, HUD-licensing fraud and mortgage loan stated-income fraud.
In the Deferred Prosecution Agreement executed by the United States Attorney and Beazer, the company agreed to pay up to $50 million dollars in restitution over several years.
The announcement of the investigation and resolution of the case included public statements by officials of the many agencies involved in the investigation including U.S. Attorney Edward R. Ryan, HUD Secretary Shaun Donovan, the North Carolina Deputy Commissioner of Banks and North Carolina Real Estate Commission Deputy Chief Counsel Janet Thoren.
Thoren said, “The North Carolina Real Estate Commission is committed to the fight against mortgage fraud. We are pleased that we were able to partner with the U.S. Attorney’s Office in the Western District and each of the other agencies involved in this complicated and detailed investigation and work together to bring about a result that includes restitution to so many consumer victims, both in North Carolina and nationwide.”
This article came from the October 2009-Vol40-2 edition of the bulletin.
From The North Carolina Society of Surveyors, Inc.
(Reprinted from the March 2004 Real Estate Bulletin)
There is a school of thought that it is not necessary to obtain a current survey when purchasing real estate–that title insurance and affidavits from sellers sufficiently protect the purchaser’s interests or that the purchaser can simply rely upon a previous survey. However, real estate agents should be aware that purchasers face potential problems typically referred to as “matters of survey” when a current field survey of property is not performed.
Matters of survey relate to anything that could negatively affect the use of property being purchased. These include, encroachments across property lines or building restriction lines; fences/walls, landscaping features, wells, swimming pool decks; the location of utilities, access ways, etc., relative to easements, property lines or buildings; the existence of flood zones; and other similar matters.
It is possible that matters of survey may be covered in title insurance policies. But coverage that protects the purchaser=s interests is unlikely to be included unless a survey is performed prior to issuance of the policy. ALender=s policies@ maycover matters of survey without requiring a current survey, but they do not protect the purchaser. The risk associated with lenders= policies is often acceptable to the title insurer because claims from a lender are not likely to occur until the purchaser defaults on the loan.
In recent years, it has become popular to have the seller sign an affidavit effectively guaranteeing that no matters of survey negatively affect the property. However, in doing so, the seller may be unwittingly accepting some unwarranted risks of liability. The buyer may also be tempted to simply rely upon a survey document from a previous transaction, but such survey may not contemplate changes to the property since the earlier survey was performed.
Many people choose not to obtain a current survey because they believe it will delay closing the transaction. This may be true if it is not ordered from the surveyor until closing of the transaction is assured. However, if the purchaser decides that a current survey is desired, it can be ordered early enough so as not to delay the closing date.
An informed purchaser knows that an accurate, current survey will provide peace of mind that cannot be obtained from any other source.
This article came from the October 2009-Vol40-2 edition of the bulletin.
Governor Beverly E. Perdue has appointed Everett “Vic” Knight of Raleigh and Alice L. Mosteller of Lake Junaluska to the Real Estate Commission, it was announced by Phillip T. Fisher, Executive Director.
Knight, a licensed broker since 1984, is also a certified appraiser and the owner of Chapel Hill Appraisals and Consultants. He previously was broker/owner of Century 21 Vic Knight Realty in Hillsborough for 10 years.
A native of Burlington, Knight graduated from North Carolina State University with a BS in Civil Engineering and worked internationally for Bechtel Corporation for several years. He was a licensed General Contractor in North Carolina.
Knight is currently a director of the National Association of REALTORS®, a past president and member of the board of directors of the North Carolina Association of REALTORS®, and past president of the Chapel Hill Board of REALTORS® and the Triangle Multiple Listing Service. He is a Continuing Education Instructor for the Real Estate Commission and the North Carolina Appraisal Board.
Knight has two daughters, “Krystle” Gray Knight, 23, and “Victoria” Scarlet Knight, 16, and is a member of Hillsborough United Church of Christ.
Mosteller is Vice President/Managing Broker of the Beverly Hanks & Associates office at Waynesville. She formerly owned Apple Realty, Inc., in Waynesville for 18 years until selling it to Beverly Hanks in 2004.
A graduate of Appalachian State University, she taught at schools in North Carolina and Virginia for 20 years. She received her real estate license in 1984.
She is a former Haywood County and North Carolina REALTOR® of the year and a past president of the Haywood County Board of REALTORS®
Mosteller has two daughters, Debra Bryant, a Registered Nurse in Raleigh, and Paulette Childers, a broker at Beverly Hanks in Waynesville.
This article came from the October 2009-Vol40-2 edition of the bulletin.
Editor’s Note: The recently implemented Home Valuation Code of Conduct is intended to enhance the independence and accuracy of the home appraisal process and provide added protections for homebuyers, mortgage investors and the housing market. In response to complaints from real estate consumers and brokers regarding the Code, the Real Estate Commission has announced its support for legislation requiring appraisal management companies operating in North Carolina to be regulated by the North Carolina Appraisal Board, and it directed that the following letter be sent to the Federal Housing Finance Agency.
September 23, 2009
The Federal Housing Finance Agency
1700 G Street, NW 4th Floor
Washington, DC 20552
Dear Sir or Madam:
To assist your agency in monitoring and evaluating the effectiveness of the Home Valuation Code of Conduct implemented May 1 by the U.S. Federal Home Loan Mortgage Corporation (Freddie Mac) and the Federal National Mortgage Association (Fannie Mae), the North Carolina Real Estate Commission has directed me to share with you its observations and experiences with regard to the Code and to respectfully offer its suggestions for improvement. The Real Estate Commission is a governmental agency charged with protecting the interests of real estate consumers in our State. The Commission recognizes and appreciates your efforts through the Code to address some of the more egregious abuses visited upon the public by the unscrupulous acts of certain mortgage lenders. However, like your agency, we have found when adopting rules and implementing new legislation, some innocent misunderstandings and intentional attempts to exploit ambiguities in them are perhaps unavoidable.
With regard to the Code, prospective homebuyers have complained to us that lenders assert that under “new rules” the lenders must order appraisals through appraisal management companies. We have also received complaints from buyers, sellers and real estate agents that appraisers assigned by such companies to perform the appraisals are not familiar with or sufficiently informed about the real estate market where the property is located to make accurate appraisals. We are, in fact, aware of cases where appraisers have traveled from other states and of cases where appraisers attempted to perform appraisals without consulting MLS sales data. Further, despite the apparent intent of the Code to distance lenders from the appraisal process, we have learned that some lenders own or have an ownership interest in the appraisal management companies they use.
Although the Real Estate Commission does not at this time support a proposed moratorium on the continued implementation of the Code and we are aware that bulletins and other supplemental information about the Code have been published, it recommends for your agency’s consideration that the Home Valuation Code of Conduct itself be amended to:
1. Clarify that lenders need not engage appraisal management companies;
2. Prohibit lenders from engaging appraisal management companies which are owned, controlled by, or affiliated with the lender;
3. Expressly require lenders to engage, whether directly or indirectly, appraisers who are state-licensed and that the appraisals performed by such appraisers conform to the minimum requirements of state laws and rules and the Uniform Standards of Professional Appraisal Practice; and
4. Expressly require appraisers who are engaged to perform appraisals to be familiar with the market where the property is located and to have access to and use the best available data for that market in performing the appraisal.
We hope our suggestions are received in the helpful spirit in which they are intended and that you will you not hesitate to contact our office if we can be of any assistance to your agency with this or any related matter.
Sincerely yours,
North Carolina Real Estate Commission
This article came from the October 2009-Vol40-2 edition of the bulletin.
The Real Estate Commission recognized the outstanding academic achievement of three brokers in REALTORS® Institute courses.
Nigel Terry of Raleigh received the Joe Schweidler Memorial Scholarship and Thomas Alexander of Havelock, the Blanton Little Memorial Scholarship. Both Schweidler and Little were former Executive Directors of the Commission.
Dorothy Boudreaux Hays of Murphy received the Phillip T. Fisher Scholarship. Fisher is currently executive director.
The recipients were selected by the North Carolina Real Estate Educational Foundation.
This article came from the October 2009-Vol40-2 edition of the bulletin.
Real Estate Commission member and former Chairman Wanda J. Proffitt of Burnsville has resigned. A member of the Commission since 1994, Proffitt was appointed by Governor Perdue to the State Board of Transportation.
Joe L. Hodge, Jr., of Raleigh, a member since 2006 and Vice Chairman, has also left the Commission.
Commission members thanked Proffitt and Hodge for their leadership and valued service to North Carolina.
This article came from the October 2009-Vol40-2 edition of the bulletin.
The Broker-in-Charge Guide, a valuable reference and resource for the management of North Carolina real estate offices, has been updated and expanded.
This 194-page volume features a lengthier discussion of licensee compensation with several pages of examples, plus updating of the requirements for maintaining and reinstating BIC eligibility under the new rules effective July 1, 2009.
Orders may be placed for the book either online from the Publications page or with printed forms available online or in this issue of the Bulletin to mail or fax.
It is recommended that BICs with editions of the Guide dated 2006 or older (see date at bottom of title page) purchase the newly updated volume. The Guide was first published in November 2004.
This article came from the October 2009-Vol40-2 edition of the bulletin.
Lindsey E. Wakely of Raleigh, a second year law student at the University of North Carolina, was the Allan R. Dameron Legal Intern for 2009.
The award is given annually in memory of and tribute to former Commission Chairman Dameron for his dedicated service in protecting the interests of North Carolina real estate consumers.
This article came from the October 2009-Vol40-2 edition of the bulletin.