The Housing Scene

Quick Takes: From Tipping to Lockboxes

You tip everyone else, so why not your real estate agent?

A great gesture for a job well done, perhaps. But tipping goes against the National Association of Realtors' Code of Ethics.

An agent should never accept money directly from a client, even if he's gone above and beyond on their behalf. All monies should pass through the agent's broker, and be reported on the HUD-1 settlement sheet.

Here's how Ranee Bray of TCP Real Estate in Austin, Texas, handled it recently when she was handed a substantial tip from a client who was more than satisfied with her work: She gave the money back and sat down with the client to come up with an alternative way to show her gratitude.

Their answer, or as Bray calls it, "an alternative blessing they could bestow upon me," was a generous donation to the agent's favorite charity in the agent's name. "What a beautiful gift of gratitude," the agent says. The donation "is a true blessing that I am proud to accept."

Starting next January, lenders will be required to collect escrow funds from borrowers who have flood insurance, just like they do for property taxes and hazard insurance.

Though the proposed rules won't take effect until almost a year from now, it won't hurt borrowers to start getting familiar with them so they won't be shocked when their house payments go up come Jan. 1.

Under the rule, which is still subject to a few changes, regulated lending institutions must escrow premiums and fees for flood coverage on loans secured by residential properties starting next year. Besides new mortgages made after that date, the rule also would apply to older loans that are increased, extended or renewed.

Also, come the first of the year, borrowers already on the books must be given the option of escrowing their flood insurance premiums if they so desire.

In a key change from previous proposals, the rule would eliminate the requirement that would have forced borrowers to obtain coverage for a structure that is a part of a residential property located in a special flood hazard area if that structure is detached from the house and does not also serve as a residence. But lenders can require insurance on the detached structures if they determine that it is necessary to protect the collateral securing the mortgage.

After several false starts, the latest federal edict on escrowing for flood coverage was issued late last year by five regulatory agencies: the Federal Reserve Board, Farm Credit Administration, Federal Deposit Insurance Corp., National Credit Union Administration and the Comptroller of the Currency.

The rules implement changes required by last year's Homeowner Flood Insurance Act, which itself amended the Biggert-Waters Act of 2012.

What's the optimal number of photographs of your property that should accompany your listing? The answer is 10-15, according to Point2, an online marketing service for real estate professionals.

While too few photos are not likely to pique the interest of buyers, too many won't necessarily kill their curiosity. But too many might be just enough to allow people to move on to the next property without ever contacting your agent, the company says.

"Too many photos may answer a potential buyer's questions, meaning there's less incentive to contact the listing agent," according to Point2. "Like any good sales pitch, you want to give enough information to interest people, but not so much that they don't need to contact you."

Too many sellers unwittingly put their homes at risk when they buy combination lockboxes at their local hardware stores so agents can gain access to their properties. That's the warning from super agent Rhonda Duffy, Georgia's No. 1 realty sales professional for 10 consecutive years.

Duffy says using store-bought lockboxes is akin to using weak online passwords. They're not secure at all, the Atlanta agent says, about as dangerous as broadcasting your passwords on national television.

The solution? "Always use a real estate agent's lockbox," she advises. "It has accountability, security and no combination dials to turn. Only actively licensed real estate agents can gain entry."

Another benefit: Agents can run "showing reports" telling sellers exactly how many agents came into their home, when and who they were."

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