As of Feb 2011 FTC’s rules regarding the MARS disclosures went into effect. We scrambled to adjust contracts, agreements, and disclosures to meet these disclosure guidelines as our local association had not created anything to address MARS. As of the beginning of July our association came out with forms to address this ruling and as of 7/15 the enforcement of the guidelines were adjusted as to how they would relate to real estate agents in good standing. There were some parts of MARS that were poorly applied to the process of agents helping home owners but a fair amount of the regulations in my opinion were nice to see for the protection of homeowners.
The original MARS ruling outlined the following:
Advance Fee Bans (follow the links above for details)
Disclosures (follow the links above for details)
The MARS Rule prohibits mortgage relief companies from making any false or misleading claims about their services, including claims about:
- the likelihood of consumers getting the results they seek;
- the company’s affiliation with government or private entities;
- the consumer’s payment and other mortgage obligations;
- the company’s refund and cancellation policies;
- whether the company has performed the services it promised;
- whether the company will provide legal representation to consumers;
- the availability or cost of any alternative to for-profit mortgage assistance relief services;
- the amount of money a consumer will save by using their services; or
- the cost of the services.
In addition, the rule bars mortgage relief companies from telling consumers to stop communicating with their lenders or servicers. Companies also must have reliable evidence to back up any claims they make about the benefits, performance, or effectiveness of the services they provide.
The above sentence “Companies also must have reliable evidence to back up any claims they make about the benefits, performance, or effectiveness of the services they provide.” is one of the items that is very important in my opinion based on my communication with prospective Sellers when they are looking for a qualified agent to help them and/or their agent when I am bringing one of my buyer clients to a short sale.
I cannot tell you how many times I have a prospective short sale seller call me to discuss the process, interview me, etc. and they mention to me that another agent is telling them they have closed X amount of short sales and their close ratio is X% of the short sales they take. According to our MLS’s data I have closed more short sales than anyone in our MLS excluding one agent (with a far lower closing ratio than me); being in the thick of our short sale scene it is relatively easy for me to know off-hand that the home owner in distress has been lied to by an agent. A quick 30 second search of the MLS will confirm this.
My purpose here is not to bag on anyone, rather I am tired of hearing of agents overestimating their knowledge and success rates at the expense of a homeowner. If you are looking at doing a short sale on your house you can ask the agent to provide to you a list of all their closed short sale transactions to back their claims. It is also a wise idea to ask the agent if they are the one that is working with the bank (Many agents outsource their short sale listing bank work to “experts” that in my experience are a 50/50 scenario). Maybe it’s just me but closing 50% of the time doesn’t strike me as a ratio that would suggest any expertise. As a Seller I would want to know if the agent telling me they had closed a certain number of short sales at a given close ratio was being straight with me or just looking for another listing.
Apart from the items discussed above there are a number of other things you might ask an agent that may help you in making the best decision for the best possible outcome.